Onshore Wind – Closure of the RO early for Onshore Wind

In a written ministerial statement of 18 June, the Secretary of State for Energy and Climate Change Amber Rudd MP set forth the Government’s intentions to end subsidies for onshore wind. The statement sets out the department’s plans to introduce primary legislation to close the Renewables Obligation to onshore wind projects as of 1 April 2016 (a year earlier than planned), whilst leaving details of how the Contracts for Difference and the Feed-in Tariff schemes will be dealt with for a later announcement. Included in the statement was a mention of grace periods for projects that already have planning consent, an accepted grid connection offer, and evidence of land rights, albeit only for projects that had these in place as of 18 June 2015. This was followed up by debates in both the House of Commons and the House of Lords on 22 June indicating both that support under the Contracts for Difference and the Feed-in Tariff were also under review.

PEL Note: Given the manifesto commitment of the Conservatives in regards to onshore wind this will not have come as a shock to many, although to have an announcement with very little detail, but that sets the deadline for the grace period criteria to that day, is potentially damaging to investor confidence. The lack of detail confirming the FIT and CfD scheme is certainly disappointing, although in the House of Commons on 22 June Amber Rudd MP did say “I said in my statement that, in respect of contracts for difference, we would be implementing the terms of our manifesto.” This appears to be a clear indication that the CfD budget may exclude onshore wind. The fate of onshore wind under the feed-in tariff is still unknown, but the outlook is not good. Many stories are already circulating about possible legal challenges following this announcement.

PLL Note: Whilst Prospect Law does not often directly comment in this update, this announcement has led to a number of rumours of legal challenges appearing in the press, rumoured to being brought by parties ranging from the Scottish Government through to developers. Previous challenges against sudden and/or retrospective changes to the RO/FIT schemes have all been based on changes to be introduced by secondary legislation following the release of a consultation. The difference here is that the Government is proposing using primary legislation, passed directly by Parliament, to achieve its ends, which is likely more difficult to challenge owing to Parliamentary sovereignty. Whilst we have yet to look at this in great detail, given the devastation the statement alone has had on the sector, even before any firm proposals or draft legislation is put forward, the statement itself may be open to legal challenge as a ‘decision’, especially if the final legislation does not cover projects that have been shelved owing to the announcement. The possibility of applying for a declaration of incompatibility and taking the case to the European Court of Human Rights (as a breach of the right to peaceful enjoyment of possessions, contrary to Article 1 of the first protocol, as established in earlier challenges against unlawful changes to the subsidy schemes brought by us) as an arguable route to a claim for damages remains open to consideration, given that a mere declaration of incompatibility cannot be a suitable remedy for any financial losses incurred.


Onshore Wind – Changes to Planning Regime

In a further written ministerial statement of 18 June, the Secretary of State for Communities and Local Government Greg Clark MP set out the Government’s intentions to impose new requirements for local planning authorities to consider when determining applications for onshore wind developments. These proposals, which take effect from the date of the statement, require that consent only be given when the development is in an area identified on the local plan as being suitable for wind development and when the planning impacts have been fully addressed and it therefore has the backing of the local community. For applications already in the system only the requirement to have addressed the planning impacts and to have the backing of the community will be required.

PEL Note: This story was somewhat overshadowed by the announcement regarding subsidies, however it could be even more important for onshore wind developers. The details of the updated guidance have not been released, however whilst the requirement for councils to have agreed (and approved) areas for wind development could prove difficult this could give potential investors useful information before money is spent – assuming such areas do materialise on local plans. The real concern seems to be the obligation for the project to have ‘the backing of the local community’ and the uncertainty as to just how easy it may be for a small group of local opposition to torpedo a project. It is not unusual, even when all local concerns have been diligently addressed, for there to be a few people who just do not want the project to go ahead, and if these individuals are allowed to prevent development the industry could have a serious problem.


Contracts for Difference – Consultation Response re Negative Pricing Released

On 29 June DECC released the Government response to the 9 March 2015 consultation on updates to the standard CfD contract terms. Alongside this the commissioned report on the likelihood of negative pricing events is also published. Owing to the state aid requirement the proposals regarding negative pricing (i.e. not paying generators if there is a 6+ hour negative pricing period) will be implemented, but with a promise to engage with the industry further. The negative pricing report gives low estimates for the probability of such events, with a conservative estimate of 0.5% of generation given for a ‘high renewables’ scenario.

PEL Note: The main area of interest in this response is likely to be the negative pricing issue, with the rest being small technical changes. The addition of a clause to the CfD contract stating that payments will not be made on generation occurring during a 6+ hour adds a risk to CfD generators that is difficult to quantify and price, however the published report gives relatively good news on the magnitude of this risk. It is worth noting that energy storage, interconnectors between countries and an increase in smart grids (that may also back onto an increase in the number of electric cars on the road) will all have a mitigating effect on the negative pricing risk. Whilst energy storage and interconnector projects are expected to go forward as planned, any curtailment of this type of investment will lead to this risk increasing and so is worth monitoring.


Capacity Market – 2015 Auction Parameters Published

On 29 June DECC published the letter to National Grid setting the parameters for the 2016 Capacity Market auction. Derating factors for interconnectors are also given as the scheme opens up to bids from such installations. The letter also sets out the parameters of the first Transitional Arrangement auction, which specifically targets demand-side response bidders.

PEL Note: Aside from the introduction of interconnectors, the December 2015 Capacity Market auction looks as if it is going to be similar to the first carried out at the end of 2014.


For a PDF of the June 2015 update, click here

If you would like to find out more about any of the points raised in this newsletter please contact us at or call us on +44 (0)20 3427 5955.




The extent of Iran’s energy resources and its potential, both as an oil and gas exporter and in terms of its domestic energy market, with a youthful and fast growing population of nearly 80 million people, has created serious new investor interest further to possible changes to the US led sanctions regime which has held back the country’s economic development in recent decades.

There remains real hope that sanctions may soon be lifted in the light of negotiations concerning Iran’s nuclear power programme. The sense of optimism amongst international investors should be tempered to some extent by US Treasury Department guidance which caveats prospects for any immediate change in the current sanctions regime:

“The parameters announced on April 2, 2015 provide a path for sanctions on Iran to be suspended and eventually terminated in exchange for IAEA verified implementation by Iran of its key nuclear commitments.”


“As of today and until a JCPOA is concluded, other than the sanctions relief provided under the JPOA, all U.S. sanctions remain in place and will continue to be vigorously enforced.

Iran has the second largest oil reserves in the world and is the third largest oil exporter, earning some US$47 Billion annually (i.e. 50% of state revenue) from production totaling 4.2 million barrels per day (640,000 m3). Iran holds some 10.3% of the world’s proven oil reserves. Iran also holds the world’s largest reserves of natural gas (17.9%) and is the third largest consumer of natural gas produced energy after the USA and Russia.

Despite this abundance in terms natural resources, Iran faces major energy challenges. The country recycles only 28% of its used oil and gas. The figure is over 60% in some countries. In 2008 Iran paid some US$84 Billion subsidizing domestic use of oil, gas and electricity and Iran is one of the most energy-intensive countries in the world with per capita energy consumption 15 times that of Japan, 10 times that of the EU and even 2.5 times the Middle Eastern average.

Perhaps these figures help to explain why the Iranian government announced plans in 2010 to construct 2,000 MW of renewable energy capacity in the 5 year period to end 2015 from a baseline of 8,500 MW of hydroelectric and 130 MW of wind capacity. In 2012 US$650 Million was allocated for renewable energy projects from the National Development Fund and in 2014 the government extended its renewables target by announcing the ambition to promote 5,000 MW of new solar and wind projects to end 2018.

The solar industry in Iran grew from 53 MW in 2005 to 67 MW in 2011 and is now supported by the state sponsored Renewable Energy Organisation of Iran (SUNA) which is attached to the country’s Energy Ministry and has an annual budget of US$60 Million. Iran’s total area is around 1600,000 km2 or 1.6×1012 m2; and 90% of the country has enough sun to generate solar power for at least 300 days per year at an average of 2,200 kilowatt-hour of solar radiation per square metre.

Iran has the potential to generate 20 to 30 GW of wind energy, half the total energy consumption needs of the country. However, as of 2012 only 163 turbines had been installed with a combined capacity of 92470 kWh. Power generated by wind and biomass installations is assisted by a feed-in-tariff of around 13 cents/kWh which is operated by the Energy Ministry. Iran also has the potential to become the ninth largest producer of geothermal energy in the world.

Iran has enormous potential as an energy superpower in the making. In future articles we will provide further updates on developments regarding the lifting of trade sanctions as well as specifically energy related stories.

Introduction to Prospect Law and Prospect Energy

Prospect Law is an energy specialist law firm which is based in London and the Midlands of the UK. It is a sister company of Prospect Energy which is a technical consultancy company. The two firms provide advice on energy development projects and energy related litigation concerning fracking, nuclear and renewable energy schemes for clients in the UK and internationally.


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For more information, please contact Edmund Robb on 07930 397531, or by email on:




On 18 June 2015 the Secretary of State for Communities and Local Government gave a written ministerial statement to the House of Commons (link 1 below) stating their intentions regarding updates to the planning regime for onshore wind developments. This statement was somewhat overshadowed by the announcement concerning the withdrawal of support for onshore wind under the Renewables Obligation, also announced yesterday.

Following the Queen’s Speech, the Government stated on its website (link 2 below) that in relation to onshore wind development there would be contained within the Energy Bill:

• legislative changes to remove the need for the Secretary of State’s consent for any large onshore wind farms (over 50 megawatts), and

• changes to the national planning policy framework (NPPF) to give effect to the Conservative manifesto commitment that local communities should have the final say on planning applications for wind farms.

It is worth noting the fact that it was stated these changes would not impact on the planning regime in Scotland and Northern Ireland.

As a result of the written statement by Greg Clark MP yesterday, we now have some indication of what such changes to the NPPF will be. It is also stated that these will come into effect immediately (i.e. on 18 June 2015). The statement says:

“When determining planning applications for wind energy developments involving one or more wind turbines, local planning authorities should only grant planning permission if:

• the development site is in an area identified as suitable for wind energy development in a local or neighbourhood plan; and

• following consultation, it can be demonstrated that the planning impacts identified by affected local communities have been fully addressed and therefore the proposal has their backing.”

It is clear that these new requirements are particularly onerous on onshore wind developers, with areas designated as ‘suitable for wind’ having to be decided and declared before any application can realistically be considered for approval.

It is unclear how much local opposition would be required to derail the prospects of a project obtaining planning permission. However, the problem is that it appears that fully addressing any concerns may not be enough, and that if there is any local opposition at all this could be fatal to such an application.

Whilst the requirement for the development site to be in an area identified as ‘suitable’ is not a requirement for projects already in the planning system (assuming a local development plan does not show such suitable areas), the second requirement above is still required for any decisions on such projects taken from yesterday onwards.

An interesting question is whether changing the guidance to be applied once a project is caught up in the process will survive a legal challenge. Given the investment at risk it would be no surprise for such a challenge to arise in the near future.





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For more information, please contact Edmund Robb on 07930 397531, or by email on:




The Department for Energy and Climate Change (DECC) has formally announced on its website its intention to close the Renewable Obligation (RO) to onshore wind projects as of 1 April 2016 – just over 9 months away.

This has been widely foreseen by the industry, and was the subject of a news post on Prospect’s site of 11 June 2015.

The DECC announcement (link below) does not give specifics, however it talks of grace periods for projects that have a grid connection agreement, planning consent and evidence of land rights.

This is very similar to the initial grace period offerings in the consultation to close the RO to large-scale solar PV generators published in May of last year, which were the subject of a Judicial Review (JR) challenge by a consortium of industry stakeholders in a case run by Prospect Law.  The JR challenge against the solar consultation is currently awaiting a hearing in the Court of Appeal.

We will know more when the consultation on this proposal is published, but it is fully expected that DECC will continue with its retrospective approach that any grace period requirements are met on the date the consultation is published, as was seen with both the May 2014 solar PV consultation and the December 2014 biomass conversion consultations. The legality of this approach remains highly controversial and subject to future legal rulings.

Prospect Law are speaking to a number of onshore wind industry stakeholders in relation to this latest announcement about possible court action by way of a JR challenge.

We will write more when the details become available.

For a PDF of this article, click here

For more information, please contact Edmund Robb on 07930 397531, or by email on:


Stories linking DECC to RO cut for onshore wind


There have been reports in both the Financial Times and the Daily Telegraph over recent days (see the links below) that DECC is briefing on plans to remove the RO for onshore wind earlier than expected and possibly on 1st April 2016.

No official announcement has been made as yet and we will certainly watch the situation as it develops over the coming days, not least to observe whether DECC opts for a similar style of “consultation” and “grace period” for its onshore wind strategy which it passed through on ROs for large scale solar (and indeed for changes to the rules for biomass conversion in December 2014).

The large scale solar RO announcement was the subject of a Judicial Review challenge by Prospect Law acting on behalf of four solar companies in the High Court [2014] EWHC 3677 (Admin). The case is currently before the Court of Appeal and is due to be heard in the coming months.

Introduction to Prospect Law and Prospect Energy

Prospect Law is an energy specialist law firm which is based in London and the Midlands of the UK. It is a sister company of Prospect Energy Ltd which is a technical consultancy company. The two firms provide advice on energy development projects and energy related litigation for clients in the UK and internationally.

For more information, please contact Edmund Robb on 07930 397531, or by email on: