From a developer’s perspective, there are two main risks to onshore wind energy projects in the UK; planning and grid connection. According to data obtained by commercial law firm McGrigors, almost half (48%) of the applications to build onshore wind farms in England and Wales in 2010 were turned down. The majority of rejections stem from concerns over noise and landscape visual impact among other things such as ecological impacts.
The number of rejections could continue to increase if the Localism Bill is enacted, which will hand more power to local communities in making planning decisions. It is therefore vital that Local planning legislation ties in with the national energy and infrastructure policy framework or the UK’s targets for renewable energy will not come to fruition.
In completing this unenviable task, Government must balance the adverse social and environmental impacts of wind turbine developments at the local community level with the broader environmental, economic, and social benefits. The landscape shouldn’t be riddled with wind turbines, however the public opinion needs to shift from NIMBYism towards REALism; that is, acknowledging the severity and scale of the future energy challenge in the UK and adapting to changes in the way we generate, transport and consume energy.
So how can developers mitigate local planning risk? This requires careful site selection coupled with a community engagement strategy that addresses concerns over noise and landscape visual impact and communicates the benefits associated with wind turbine developments.These benefits can be varied and substantial; boosting local employment, reducing exposure to fluctuations in energy prices, providing additional income streams for landowners and/or community organisations, and the obvious long-term environmental benefits compared to conventional power sources.
But navigating local planning jurisdictions and achieving planning consent for a mere single or double turbine development can take up to 12 months (sometimes longer) and incur significant expense. A development budget upwards of £60,000 may be required to cover specialist ecology and engineering surveys and reports, grid connection studies, community liaison sessions, landscape visual impact assessments, wind yield assessment reports, and legal fees. And this is ‘at risk’ capital as the project may be tossed out the door at the local planning committee hearing.
Local politics can greatly influence the success of a planning application so savvy developers expend a great deal of time and effort building strong relationships with local community members and organisations in target areas to ensure all concerns relating to a development are addressed prior to submitting a planning application.
The other main development risk is grid connection. There are 14 licenced Distribution Network Operators (DNOs) in the UK and some network operators are more responsive than others, depending on the number of connection applications within a particular network area. Electricity distribution networks are monopolies because there is only one owner/operator for each area so the DNOs are in the box seat when it comes to negotiating connections.
Connection costs can render small projects (1 or 2 turbines) completely uneconomic. This is best discovered before much effort has been expended. Developers usually consult with the DNO and/or undertake an initial grid assessment before requesting a formal connection quotation from the DNO. Quotations for FIT projects can take up to 6 months to finalise and some DNOs charge for issuing quotations which adds time and expense to the development process. Grid connection costs for a single project can vary drastically from £20,000 for connecting into an 11kV line to well over £1,000,000 for connection into a 132kV line.
I had limited appreciation for the large number of ‘hidden costs’ associated with project development prior to working in this sector. Then there are consultancy fees for planning, technical and project management services, all essential services, but not cheap. We pay careful attention to each project development budget to avoid overspending. We’ve learnt some valuable lessons over the past 6-12 months and can now identify risk areas the earlier stages and can avoid repeat hick-ups and save time and money moving forward. Our strategy involves hand-picking the most attractive projects to progress through planning taking into account a range of technical, practical, environmental, and sociological factors.
