If the government wants to unleash clean energy, it should learn from the Tories

Expanding freeports with designated clean energy zones and offering up more Permitted Development Rights to renewables could help accelerate the UK energy transition, writes Elinor Bale from the Conservative Environment Network (CEN)

Elinor Bale | Climate Programme Manager

The energy transition can bring economic growth, reinvigorate our industrial heartlands, and create new jobs. But to fully capitalise on the UK's potential for clean energy, we need to unleash the private sector. Existing freeports provide a blueprint for how to do this, but the government should not stop there.

Freeports benefit from streamlined planning regulation, including expanded permitted development rights (PDRs). Through relief on Stamp Duty Land Tax and enhanced capital allowances, they have further incentivised private investment in key locations. Together, they have attracted over £6.4bn of investment, and delivered new manufacturing facilities and clean energy projects across the UK, slated to create over 7,000 jobs in the process.

The Teesside Freeport, arguably the flagship project of this Conservative policy, is helping to reinvigorate our industrial heartlands. The approval of SeAH Wind's £300m Offshore Turbine Base Factory Offshore Turbine Base Factory alone is to create over 1,500 supply chain construction jobs  and a further 750 once operational. Elsewhere, the Forth Green Freeport is set to unlock £7.9bn in economic regeneration over the next decade.

The success of these freeports can be replicated across the country. They are a prime example of what can happen when the government is willing to cut red tape and how the clean energy sector can help to deliver economic growth, driven by private investment.

But at present our planning system and economic operating environment are preventing the inward investment the UK desperately needs to truly benefit from the energy transition. The planning regime for renewables is far too bureaucratic. It prevents projects getting off the ground, adds unnecessary costs, and leaves firms open to vexatious lawsuits. The application for one wind farm off the coast of England contained 1,961 documents, with over 13,725 pages dedicated to environmental assessments.

The planning regime, combined with high operating costs, the highest industrial electricity prices in the world, and high rates of taxation, makes the UK an unappealing and risky investment. These issues are driving investors overseas to more profitable operating conditions. The UK is losing out.

The government should learn from what the last Conservative administration did well, by replicating the freeport model in more locations and enhancing it by adding a premium to the capital allowances for clean energy industries in freeports. This enhancement could help the UK to seize the opportunity to build up manufacturing capacity and meet the growing demand from the large pipeline of clean energy projects. It can also complement other policies like the Clean Industry Bonus. This will mean more investment and more jobs in these regions.

But it can also go further. With planning applications for clean energy taking up to four years within the existing system, costs can easily spiral and investors are left unsure about supporting projects that could stall or rack up costs. The government should, therefore, set its sights on our burdensome planning process, starting with the areas of lowest environmental risk.

Designating areas that are classified as low in environmental risk as clean energy zones is the first step. These zones should benefit from streamlined environmental regulations. Exempting clean energy projects located in them from environmental impact assessments will slash the cost and time taken to build them.

Across the country, PDRs for clean energy should be expanded. This would help to scale up innovative new technologies and create new jobs. The expansion of PDRs for heat pumps and small-scale onshore wind is welcome. However, the government can go further.

Planning regulations are holding back the UK's floating solar power potential. By expanding PDRs on reservoirs to allow the electricity generated to be sold to third parties, and extending this right to disused quarries and lakes, is the first step to unlocking this clean technology.

Freeports have shown that deregulation works. We should apply this logic across the UK, by expanding freeports, by designating clean energy zones for areas with the lowest environmental risk, and by allowing more clean energy projects to circumvent the planning system through PDRs. With so much scope for the government to go further, it is okay for Ministers to admit that, on this at least, the Conservatives were right. If they do, the UK will reap the economic rewards.

First published by BusinessGreen. Elinor Bale is Climate Programme Manager at CEN.