The UK’s renewable industry could receive a dual boost from Brexit, according to planning experts at legal firm Pinsent Masons. For example, over-regulation that stifles new onshore and offshore wind developments could be watered down and removal of State Aid rules could encourage greater manufacturing of the infrastructure required for renewable projects.
“There is good and bad for the renewables industry in terms of the UK’s current relationship with the EU,” said Pinsent Masons partner and planning specialist, Jennifer Ballantyne, said Brexit threw up a number of positives and negatives. “The bad is that some segments of the market — for instance onshore and offshore wind— are over-regulated. The EU imposes particular requirements which means the development process needs to be conducted in a particular way and a whole load of constraints and extra costs are introduced.”
He added: “The clearest example is the designation of environmentally protected areas, some of which are in exactly the sort of places where one would want to build onshore or offshore wind farms. Some in the UK have never been convinced by the science that underpins those designations and concerns have been expressed that designations are politically motivated.
Pinsent Masons also highlighted that the removal of restrictive State Aid rules could have a significant impact on the industry, while a new trade relationship could transform the profile of players in the UK wind sector.
“Forward-thinking developers may already be reviewing their thinking around areas currently designated or proposed for designation as having EU protection on environmental grounds. If there is a relaxation at a UK level that could be both commercially significant and controversial.”
Partner Gary McGovern agreed. “State Aid rules which impose a requirement to maintain a level playing field could be gone and so create new opportunities,” he said.
“For instance, a live issue currently is whether proposals to allow onshore wind projects on the Scottish Islands to retain access to the Contracts for Difference regime would fall foul of State Aid rules if at the same time mainland wind projects are excluded. There could also be selective interventions to stimulate UK renewables manufacturing. All the major kit for renewable infrastructure is procured from continental Europe as there is little manufacturing base in the UK. There could be greater opportunity to stimulate that base through targeted action without fear of triggering State Aid rules, however there would be significant ground to be made up.”
However, McGovern said there would be heightened concern that Brexit would make the UK renewables a less attractive option for European investors.
He added: “It’s striking that much of the current investment and financing for renewables comes from outside the UK, and a significant proportion of the major players in UK renewables are owned by European parents. For those subsidiaries of European businesses, or those reliant upon foreign investment, there will be concern over potential trade barriers which could make the UK a less attractive investment proposition.”
Filed Under: News, Policy, Projects