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Commercial Question

The future of clean energy

updated on 01 September 2020

Question

How will clean energy power the UK’s future?

Answer

One of the most noticeable things that has happened in the UK over recent months is the significant reduction in noise and air pollution. As schools and businesses slowly start to return to normal, the questions about our energy future also start to reappear; how can we power the UK without relying on fossil fuels? And how can we get from A to B without relying on petrol and diesel vehicles?

The UK has already begun to phase out fossil fuels and replace them with clean sources of energy such as wind, solar, hydro power and energy storage, as it looks to achieve net zero by 2050. Indeed, in 2019 clean energy provided more electricity than fossil fuels for the first time and it’s estimated that this year, over 30% of the UK’s power will come from clean energy. However, the UK is expected to need 90GW of wind energy and 80GW of solar power to meet its 2050 net zero target - that’s more than a 1,000% increase in clean energy.

Another important date in the UK’s calendar is 2035, as this is when the UK implements a ban on the sale of petrol and diesel cars. In order for this to be a reality, there needs to be increased focus on green transport and the number of people buying electric vehicles (EVs). We already have household names such as Fiat, Mini and Vauxhall bringing EVs onto the market, but issues such as range anxiety, lack of EV charging infrastructure (EVCI) and frustration at the lack of synergy between operators needs to be addressed before the public is ready to go electric.

With two main strands of the puzzle – clean energy and EV and their associated infrastructure – playing such a key role in powering the UK’s future, this is an exciting time for those working within the sector to get involved with new technologies, create a sustainable supply chain and grow the economy by providing green jobs. But what role does the legal profession play in this scenario?

First-of-a-kind projects

Throughout the life-cycle of a clean energy project, lawyers from a range of different disciplines will be involved. One of the first elements of any project is to secure the land that the project will be built on and this is where real estate lawyers play such an integral role. The majority of clean energy projects are built on third-party land, so without the correct legal documentation between the landowner and the project developer there isn’t a basis for the project.

For the lawyers securing the land rights for the first commercial wind farm (which was developed in 1991) and the first solar farm (which was developed in 2011), there was no rule book for these kinds of projects. Indeed, every aspect of these projects – from securing the land that the project would be developed on, to obtaining planning permission and project funding, and ultimately the construction of the wind farm – required first-of-a-kind legal advice. The team undertaking the legal aspects of these projects were tasked with developing the legal precedents for these technologies and, crucially, helped set the stage for future developments.

The market for solar and wind continued to gather pace over the next decade with banks and investors alike viewing subsidised projects as a long term stable investment. The UK steadily increased its levels of clean energy generation, until in 2015 the UK government announced that it was ending subsidies for UK wind and solar.

However, rather than throw the clean energy sector (and those operating in it) into a state of decline, this led to a new era of subsidy-free projects and the development of emerging technologies such as energy storage. For the legal profession this also represented a new challenge and an opportunity to build market confidence not only in new technologies, but also in the way they were being used to meet the UK’s power demands.

Powered by clean energy generation

Consumer demand for greener energy has led to an increasing amount of clean energy generation powering the UK. But how do you stop the lights going out when the wind isn’t blowing or the sun isn’t shining without going back to a reliance on fossil fuels? This is where new technologies such as energy storage have a key role to play. In its simplest form, energy storage comprises a battery which charges using the excess power produced (eg, by solar panels) and stores that energy until it’s released back to the energy system when needed.

Energy storage is a relatively new technology and its use as an energy system balancing mechanism created a whole raft of new legal challenges which needed to be addressed. It also presented an exciting opportunity to create precedents for a technology which is going to play an integral part in the UK’s energy system.

There are an increasing number of large organisations who want to ensure that their energy supplies come from clean energy sources, partly in recognition of consumers’ changing views. Different energy requirements have led to the development of some unique projects which combine battery storage with large-scale rooftop or ground-mounted solar, and some innovative agreements by which the organisation can purchase the power generated. As more organisations become responsible for the generation and/or direct purchase of their power, this is an area where significant growth is expected.

Driving EVs and EVCIs into the mix

With the transport sector accounting for 34% of the UK’s carbon emissions in 2019, it’s irrefutably the country’s most carbon-intensive sector. The 2035 ban on the sale of new petrol and diesel cars has placed EVs at the forefront of transport decarbonisation and the UK has already started to prepare.

However, as the number of EVs on the road increases, so does the need to develop the associated infrastructure. Until recently the number of publicly available charging points has been very limited, so developing the EVCI required to decarbonise the transport sector has involved a number of market firsts – each with their own legal challenges from a real estate, planning, funding, construction and regulatory point of view.

Alongside kerbside charging in cities and towns, there has been an increase in destination charging at retail and leisure venues – enhancing customer experience and potentially increasing dwell time – and the development of EV charging station models on main infrastructure routes such as GRIDSERVE’s Electric Forecourts® concept.

In addition, as the UK continues to ‘go electric’, the technology will also continue to develop. Already research is being undertaken to develop battery technology that could give EVs an additional 200+ miles of charge in just 10 minutes, car manufacturers are testing vehicles with roof solar panels to increase range, and charging technologies such as lamp post charge points, induction pads and wireless charging are being trialled.

While there may not be flying cars by 2035, there is a real opportunity to revolutionise the transport sector and the introduction of greener private and public transport is going to have a big impact. Certainly our cities, towns and roads are going to look and sound very different.

The future

To reach net zero by 2050, the clean energy sector is going to need to continue to innovate, develop new technologies such as EVCI, energy storage and hydrogen, and look at different ways to deliver energy to end users. Already developers are look at modelling projects which combine multiple-technologies – such as combining solar with energy storage and EVCI to create localised energy systems.

Add to this continued interest from banks and investors in funding new technologies such as energy storage and EVCI, a drive to create a UK economy which is based on sustainable commerce, and an increased focus within organisations on green issues, it’s easy to see that there is an exciting future for the clean energy sector – one which continues to provide unique opportunities for those involved in its development.

Maria Connolly is head of clean energy & real estate at TLT LLP. Maria has devoted her 20+ year career to the clean energy sector, acting on several hundred wind, solar, biomass, hydro, EV and energy storage projects. Maria advises on a wide spectrum of property matters including acquisitions of existing renewable energy projects, drafting bespoke documentation, negotiation of exclusivity agreements, option agreements and leases and undertaking full due diligence.

Maria is an inaugural member of the Regen EWiRE group, spearheads the firms’ membership of Aldersgate Group, is on the EV World Congress 2020 Advisory Board, and has been appointed to the City of London Law Society Energy Committee. Maria also leads TLT’s Environment Forum which look at reducing the firms’ carbon footprint.

She is independently recognised as an expert in the field of Energy & Natural Resources by Chambers UK and as a leading individual in the field of Energy by The Legal 500.