Overview

A significant increase in renewable energy provision in the UK will be required if legally binding targets to be carbon neutral by 2050 are to be met. The Government’s British Energy Security Strategy (ESS), published in April 2022, sets out the ambition that by 2030, 95% of British electricity will be produced by low-carbon means, and by 2035 the Government aims to have a fully decarbonised electricity system. As part of the ESS, the Government has increased its ambition for offshore wind and solar and aims to improve the planning process for onshore wind.

The Government’s own MISSION ZERO – Independent Review of Net Zero includes 129 recommendations aimed to help the UK secure Net Zero investments and meet its Net Zero target in an affordable manner.

The review proposes that the Government should take forward ten priority missions, of which four relate to renewable energy generation and local authority deployment:

• Grid and infrastructure: a strategic framework and delivery plan for the critical networks of the future to turbocharge development.
• Solar: Full-scale deployment of solar including a rooftop revolution to harness one of the cheapest forms of energy, increase our energy independence, and deliver up to 70 GW of British solar generation by 2035.
• Onshore wind: Pave the way for onshore deployment, working closely with communities to deliver local benefits.
• Net Zero local Big Bang: Unlocking the planning system and reforming the relationship between central and local government to give local authorities and communities the power they need to act on Net Zero. The ESS deployment targets, coupled with the priority missions, provide opportunities for more local authorities to own renewable energy generating assets, to offset their own carbon emissions and provide stable energy pricing.

Size and technology

For English local authorities, solar PV is more likely to be a viable option due to the significant planning constraints associated with the development of new onshore wind turbines. In the main, to work without subsidy, solar farms will either need a corporate-style power purchase agreement (PPA) (which could be with the authority), a private wire connection, or to be larger than 10 MW. Where wind turbine opportunities do exist, these will need either a private wire connection or to be larger than 10 MW.

Local authority projects are often smaller than commercially led schemes, as the drivers for their development are different. Smaller-scale solar PV schemes are relatively common in local authorities wanting to produce some or all of their own electricity, to contain costs and decarbonise supplies, whilst providing a visible representation to their communities of their activities to tackle climate change.

Recent changes in the lending criteria for the Public Works Loan Board (PWLB) make it increasingly important that the scale of local authority schemes is proportionate to their electricity supply and decarbonisation goals.

Where a local authority has already secured a decarbonised electricity supply, there is still scope for ‘in area’ schemes that contribute towards wider decarbonisation goals, and private wires that can provide price certainty for local businesses or utilities.

Develop, acquire, or enable

For local authorities looking to own a renewable energy asset there are five basic options:

• Develop a project on owned land
• Develop a project on third-party land
• Acquire project rights (land agreements, planning consent, and grid connection offer) from a commercial developer
• Acquire a fully built and commissioned project
• Make land available for others to develop through sale, lease, or concession.

Aside from these options, some local authorities may be offered opportunities as part of an approach from a developer to lease land. This type of opportunity will need to be carefully evaluated in terms of procurement options.

Developing small schemes on local authority land holdings can be an effective use of land that has no other purpose, but local authorities considering this should bear in mind that small schemes may not have the same economies of scale that larger ones do. In addressing their own emissions, a local authority may need to bring forward a series of smaller developments to meet their targets.

Wider role of local authorities in developing renewable energy

In achieving Net Zero, local authorities can take on a range of complementary roles in addition to that of investor in its own renewable energy projects:

• Funder/investor – investing/loaning money to support external organisations to develop renewable energy
• Signposter – directing enquiries about renewable energy to appropriate sources of support and funding/finance
• Convenor/matchmaker – bringing different actors together to collectively enable them to bring forward renewable energy projects
• Incentiviser – providing enabling activities and support to interested stakeholders in the Council area, allowing them to bring forward solutions to local energy
• Place-shaper – taking responsibility for strategic thinking about renewable energy deployment using the tools and functions held by the local authority
• Market maker – the Council can commit in advance to purchasing locally generated electricity, giving developers, especially community energy projects, the confidence to proceed with their projects.