LEGAL EAGLES
As energy costs rise, many organisations with large real estate portfolios have been implementing energy reduction measures, seeking alternative suppliers and turning to on-site generation. Energy and education lawyers, SGH Martineau have been monitoring these trends over the past decade and have observed a growing interest from Higher Education clients for on-site renewable projects and in particular, wind turbine installations
UNIVERSITIES
Universities have faced more challenges than most in recent years, not only absorbing rising energy costs, but also having to adjust their financial modelling in the wake of a new tuition fees regime, cuts in research funding and restrictions on overseas students.
FUNDING
But Universities pride themselves on problem solving and in this golden age of ‘green’, one viable area of revenue generation is with renewable energy projects.
Supported by grants from the Higher Education Funding Council, Universities can apply for Capital Investment funding to undertake projects that improve environmental sustainability and reduce carbon emissions. For campus universities this grant combined with a large real estate portfolio and the potential to benefit from the Government’s Feed-in Tariff scheme, has lent itself to the development of wind projects.
FEATURE SPONSOR AN EDUCATION IN WIND ENERGY
CASE STUDY – LANCASTER UNIVERSITY
SGH Martineau recently advised Lancaster University on the planning, procurement and construction of a wind project that has been generating 15- 20% of the University’s monthly electricity requirements. Across a large campus, such as Lancaster’s this provides a significant financial saving.
Whilst the benefits of generating your own energy are both financial and reputational, Lancaster University faced several other challenges before the project could get off the ground. Securing planning permission is always a challenge and in this case, the University also had to assist the local planning authority in seeing off a potential judicial review challenge. In addition, our team had to co-ordinate
THE WINDS OF CHANGE AFFECTING THE ONSHORE WIND FARM INDUSTRY
The debate around the development of onshore wind farms continues to enjoy a high profile in the media. The Government continues to fuel this debate with policy statements and legislative changes to try to strike a balance between the need for continued low carbon technology investment and the protection of legitimate local community interests. The most recent announcements cover a number of areas.
PRE-APPLICATION CONSULTATION
Proposed amendments to secondary legislation will make pre-application consultation with communities compulsory for ‘more significant’ wind farm projects, although what constitutes ‘more significant’ is undefined. This is currently compulsory for wind farm projects over 50 megawatts (MW). Many wind farm developers already carry out pre-application consultation with communities for projects below the 50 MW threshold as best practice. These amendments to legislation are intended to make the best practice more commonplace.
PLANNING GUIDANCE
New planning guidance is also going to be issued to councils and appeal inspectors to ensure planning decisions are interpreted in line with the National Planning Policy.
BENEFIT PACKAGES
In its statement DECC and DCLG have recommended that the industry revises current benefit packages available to local
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communities by the end of the year. Currently developers can pay incentive payments to local communities of £1,000 per megawatt of installed capacity per year over the lifetime of the wind farm project. The revised incentive payments are to increase to £5,000 per megawatt per year, available to local communities who host wind farms.
There is a concern among developers that although the increased rate is only recommended by DECC, and therefore voluntary, not offering the full £5,000 per year community incentive package will affect the chances of the project planning being approved and lead to a reduction in renewable projects going forward.
Overall, this is a series of measures driven by the very real need to recognise the interests of local communities. The net effect of these changes is unlikely to alter significantly the approval process for projects. However, it is clear that these changes will discourage developers from entering into the planning process without a clear appreciation of, and strategy for dealing with, the local community.
ALTERNATIVE WAYS
To meet their community benefit obligations developers may need to create alternative ways of incentivising local communities to support projects, such as supplementing incentive payments with discount schemes from local energy providers. One likely effect will be that developers focus on a greater return from their existing assets, either by sale or re-powering.
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