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Subsidy free: The planning consequences of larger schemes

When subsidies were available, with the exception of roof mounted solar, the vast majority of solar schemes ranged from 5MW to 49.99 MW

Now that subsidies have ended, there is a question over the impact of the size of a scheme and whether size matters. One might argue that larger schemes are more attractive because they bring more economies of scale, as the legal, planning and consultancy costs and investment in management time are the same regardless of the size of the development. In addition, each development only needs one point of grid connection and one grid connection agreement, so it makes sense to bear this cost across a larger scheme.

Solar farms peaked at 49.99 MW because anything above that level of output requires a Development Consent Order (DCO) rather than a traditional planning permission. While there is much to be said in favour of the DCO application process – which has been positively adopted by the wider national infrastructure sector – it would seem that the solar industry avoided making DCO applications because of a perception that such applications were costly, time-consuming and unnecessarily unfamiliar.

Stepping forward to the current subsidy free world, where developers are looking to find solutions to make schemes viable, there are various options available. This includes co-locating large-scale energy generating stations with battery storage, developing stand-alone large-scale solar schemes potentially with a private wire off-taker, or even undertaking large-scale battery developments that benefit from mixed revenue schemes. However, while any of these options would preserve the economies of scale, they would almost certainly push the scheme above 50 MW.

While there is still some nervousness about engaging in the DCO process, developers needn't be concerned. While the application costs will be somewhat higher than a traditional planning application, and the front-loaded consultation will initially seem to add to the application preparation process, once a DCO application has been accepted for determination applicants get certainty as to the determination timeline. This timeline is considerably shorter than some solar farm applications we have seen in the past.

In addition, applicants get to write what is in effect their own planning permission, drafting their own conditions (known as 'requirements' in DCO terminology). A DCO can also include permission for development associated with the scheme that is necessary to facilitate the main scheme, such as overhead connection cabling. It can also provide for the compulsory purchase of land and rights in the right circumstances and extinguish public rights of way. Applicants will also be pleased to find that their application will be examined by non-political professional examiners, rather than being exposed to a planning committee that may have pre-set criteria for determining this type of planning application. DCO application approval rates are also very high.

In summary, a DCO is a much more powerful instrument than a planning permission, and developers who are looking to undertake large-scale subsidy free developments may want to consider the benefits that securing a DCO can bring rather than looking to the alternative of paring-down their schemes below 50 MW and potentially losing the economies of scale.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at August 2017. Specific advice should be sought for specific cases. For more information see our terms & conditions.

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