Summary

The offshore wind industry in the UK needs to revise its approach to consenting if it is to hit ambitious targets and help deliver Net Zero.

Developers rarely adopt comprehensive consenting strategies. Approaches are deficient in many cases, including potentially fatal practices in respect of land acquisition, bird collision risk, EIA scoping and Habitats Regulation Assessment.

This fifteen-minute read offers some in-depth analysis and solutions, based on the observation that as an industry we need to step back, pause and think both more creatively and more strategically.

The challenge

The UK’s legally binding commitment made earlier this year to attain net zero greenhouse gas emissions by 2050 needs to be followed up with urgent action in every sector. In our windy maritime corner of Europe the key to decarbonisation of the electricity market is clearly a rapid increase in offshore wind capacity; it’s cheap, proven and quick to deliver. It was therefore extremely encouraging to read in “Our energy, Our future” [1], published at Offshore 2019 last month that Europe’s “big goals” for offshore wind – between 230GW and 450GW by 2050 – are attainable, at least in theory.

The path to a huge expansion in offshore wind was recognised in the Conservative manifesto, with a target (although no clear plan) for 40GW capacity by 2030. And yet even this capacity cannot be unlocked with a “business as usual” approach to consenting. To date, the UK has experienced the refusal of consent for two offshore wind projects as well as larger development zones abandoned or dramatically scaled down. This year has seen capacity cut from the Crown Estate’s extension round, consenting decisions about a number of Southern North Sea projects postponed and ongoing delays to the Scottish sectoral marine plan.

Many of these barriers can only be overcome by collaboration between industry, consultees and regulators – indeed much the progress in the early days of UK offshore wind was made by excellent initiatives such as COWRIE, and the baton here has been picked up by the ORJIP I and II programmes. “Our Energy, Our Future” rightly calls for improvements to marine spatial planning. However, there is also much that developers can do on their own to speed up the rate of consenting and delivery, particularly if more thorough consenting strategies are adopted.

The importance of a flexible consenting strategy to the delivery of Nationally Significant Infrastructure Projects (NSIPs) was highlighted NIPA’s “Towards a Flexibility Toolkit” report, published earlier this year. The report is well worth a read, providing excellent advice on securing flexibility in Development Consent Orders (DCOs).

 

However, flexibility should not be a developer’s only aim. As this article discusses, gaining a commercially viable and fundable consent requires the negotiation of a complex tangle of interacting issues. Every infrastructure project should have a comprehensive and coherent consenting strategy but, sadly, many don’t. Although overused it’s worth remembering the much-quoted maxim from the “Art of War”, that “tactics without strategy is the noise before defeat”.

That’s not a consenting strategy

One of the first things I look at when I join a development-stage energy project is its consenting strategy; it can tell you a lot about a project’s health, the corporate culture and the prospects of success.

The quality of consenting strategies can vary immensely. In the best cases, a comprehensive analysis will have drawn upon the experience of internal and external subject matter experts, have been signed off by senior management and be aligned with the project’s risk register, budget and programme.

At worst a “strategy” may be just a Gantt chart setting out environmental impact assessment milestones, relying on the legal minimum for consultation periods. These dates are often aligned with unrealistic programme expectations. This approach is surprisingly common, particularly on projects where management experience in development is limited, corporate culture is deadline driven (rather than outcome focussed), risk (of all types) is poorly managed or where environmental and consenting issues are perceived to be peripheral to the project’s success.

Where are you going?

The reason why consenting strategy is so frequently overlooked is that project teams often misunderstand what a consenting strategy really is. Strategy is not a list of goals or objectives. Rather, it’s a “how”, not a “what”. It’s more than a map, it doesn’t just anticipate the peaks to be climbed and the rivers to be forded, it’s a guidebook on how to reach our destination.

Note that the destination isn’t the grant of consent by a regulator. A consenting strategy which finishes at project consent has only done half the job. The goal of an intelligent developer is a project’s financial investment decision (FID). To be “buildable” a consent must first be “fundable”. In many parts of the world consents are not conditional; overseas investors are often surprised to learn that discharge of consent conditions can significantly delay FID. Overly optimistic programmes can come unstuck at the early stages of financing. Lenders’ technical due diligence frequently reveals unrealistic schedules for the discharge of conditions. Often a canny developer can get to FID more quickly by taking the route to consenting slightly more slowly.

Do I really need a strategy?

In many cases the design of leasing rounds requires bidders to submit a consenting strategy in order to win a seabed concession. In addition, large infrastructure projects are so complex that it is very hard for an individual project manager or consenting lead to anticipate all the hurdles required to get consent.

Drafting a consent strategy provides an opportunity to

review the project programme, and the validity of the assumptions it contains

share a wealth of hard-won experience across multi-disciplinary teams and anticipate future hurdles, sometimes avoiding them altogether.

Identify and assess risk, and ensure mitigations are identified and resources are appropriately earmarked. Consenting and environmental issues are rarely incorporated fully into corporate or project risk management processes.

Educate and align the internal team and senior management – many project managers and senior leaders, particularly those with limited development experience, tend to see consenting as a simple linear process rather than a complex, iterative, system in its own right

The strategy is not just for the consenting team but also engineering and construction colleagues. They are, after all, determining what needs to be built. Codes of construction practice, detailed environmental mitigation, s.106 obligations and other environmental controls all need to be developed and consulted on as the consenting schedule progresses. An understanding of what technical inputs are required, and when, is vital to keep project progress on track.

The strategy needn’t be a long document (some of the best are only ten or so pages long) but it does require careful, collaborative, preparation. Pausing to breath and think early on can be the best gift to give a project. I’m also a firm believer that the strategy should not be filed away, but instead should be revisited regularly – particularly as the project progresses through various internal gateways.

So, what should project teams be thinking about?

Here’s a snapshot of just some of the challenges we face:

 

This post’s focus is on projects being consented in English and Welsh waters under the Nationally Significant Infrastructure Project (NSIP) process, but many of the issues apply just as readily to consents under s.36 and marine licensing for projects in Scottish waters. On this issue of jurisdiction, I have argued elsewhere [2] that the 2008 Planning Act has been of immense benefit to offshore wind and is far more favourable to developers than is commonly acknowledged. The Scottish industry could certainly benefit from changes streamlining the three main offshore and onshore consents into a single process with a defined decision-making period.

A review of recent DCO applications and examination documents suggests that the issues listed below are not being given sufficient consideration early on in a project’s life. Of course, there are a host of other issues which are also relevant, from community benefit to procurement of consultants but addressing the following nine topics would significantly improve the consenting of offshore wind projects:

Habitats Regulation Assessment – part 1 – avian collision risk

An obvious one, this, but Habitats Regulations issues arising from potential bird mortalities occur in all projects and yet are rarely planned for from an early stage, other than a rush to commence surveys as quickly as possible. All too often HRA is seen as a “bolt on” to Environmental Impact Assessment, with surveys already commissioned before anything other than a proforma approach to HRA has been considered. It is rare to see an HRA-specific methodology discussed at the scoping stage and, once data start to show the emergence of an HRA challenge, projects are often reluctant to address gaps in information, instead ploughing on to meet an application deadline. While this approach has historically been pragmatic, particularly in the context of competition for CfDs, the recent DCO examination history of Southern North Sea projects suggests that more structured and comprehensive consideration of the risks is required.

The examinations for the Hornsea 2 and 3 offshore wind farms and the rejection of a Race Bank extension lease application by the Crown Estate suggest that the limits of environmental assessment are being reached well before the real ecological carrying capacity of the environment. This is a geeky way of saying the standard methodologies are probably far too gloomy in their predictions. With much of the capacity being offered in Round 4 likely to be based in the Southern North Sea, there is an urgent need for consenting strategies to consider HRA right from the start, and for developers and consultants to approach assessment differently.

Arguably, the industry has dodged the shortcomings in assessing collision risk for too long now. The result is that cumulative impact assessment is showing the potential for likely significant effects on European sites when the reality is none is likely to arise. Models originally developed for onshore projects and observed flight behaviours have been adapted ad hoc and not comprehensively overhauled for at least 15 years. The combination of population viability analysis with flawed collision risk modelling has been a particularly insidious problem, giving rise to the use of largely artificial and arbitrary numerical values to define whether an impact is likely to be acceptable or not. Despite some useful research projects, current DCO examinations suggest that the appetite for reform of the process is not yet present, despite the increasing risk of refusal of consent.

Furthermore, the emphasis on counting birds, rather than understanding how birds use the available marine space, has probably placed an excessive focus on the collection of aerial data. Arguably, more attention on colonies and breeding sites is required, particularly if IROPI derogations (see below) are to be considered.

The limited nature of the evidence, and the relatively primitive approach to assessment, means statutory consultees and regulators are left with a restricted evidence base, something which, following the precautionary principle, can be fatal to Habitats Directive tests. Blindly continuing with business as usual in the hope that some projects may progress isn’t going to deliver the 40GW target, let alone the greater ambitions for beyond 2030.

HRA (again) – derogations

Of course, one way to address these HRA data challenges is to use the route envisaged in the legislation – the derogations. There are very strong arguments for describing the climate emergency as an “imperative reason of overriding public interest” (IROPI), in fact it’s hard to think of things which are more imperative and in the public interest than the provision of large amounts of renewable electricity. The development of arguments in respect of alternatives and compensation (requirements of the legislation if an IROPI derogation is sought) is complicated and as a result they are often poorly formulated, usually very late in the process (in the final weeks of examination) and sometimes by poorly qualified advisors.

Following an IROPI route to consent requires extensive and evidence-led consultation, particularly with the statutory nature conservation bodies, on whose advice regulators rely and which is rarely disregarded by them. As well as engaging ecological advisors with experience of the derogation process it is also essential to obtain specialist legal advice in this area. Imaginative approaches to delivering compensation could unlock huge potentials, both in terms of biodiversity benefits (for example helping sea bird colonies adapt to a changing climate by improving resilience) and in delivering the Net Zero targets.

Onshore cable routeing – land acquisition

Another significant cause of delay for offshore wind projects is onshore cable routeing. Here strategies, particularly in the case of land acquisition, are rarely fully developed. As onshore cable routes become longer due to constraints on the national grid, the importance of route selection becomes more acute. The challenges here arise from the consultation requirements of the Planning Act, coupled with the need to acquire land as quickly and economically as possible.

Recent projects, most notably those making landfall on the East Coast, have been forced into additional rounds of land referencing and consultation, adding six or more months to the consenting process, because cable routes have not been finalised until late in the day – often because of changes in engineering design. Land acquisition strategies which rely on compulsory acquisition (CA) are particularly vulnerable in this respect and, as discussed below, the early, robust and comprehensive consideration of all viable alternatives is essential if CA powers are to be relied upon.

A comparison of how alternatives are approached in other sectors, particularly for highways, suggests that the offshore wind industry still has a lot to learn about developing linear projects and the evolution of engineering designs.

For another take on this issue there is an excellent article by Jonathon Stott at Gately Hamer available on LinkedIn [3].

Alternatives

The consideration of alternatives in the planning system is not straightforward and is frequently misunderstood by EIA practitioners working in the offshore wind environment. A review of the “Alternatives” chapters in recent ES’s suggests too much focus on irrelevant alternatives (often by reference to a retro-fitted project evolution narrative) and not enough consideration of the really significant decisions.

In two of the areas discussed above (compulsory acquisition and IROPI derogations under the Habitats Directives), a robust and well documented consideration of alternatives is essential. Because of the requirements of legislation, including the Human Rights Act, it is very difficult to combat a compulsory acquisition challenge during the examination process if alternatives to the land being compulsory acquired were not comprehensively considered previously. While “retro-fitting” design and land decisions can work it is not an advisable approach! This is an area where legal teams with solid experience of EIA and alternatives can add a lot of value in providing guidance – preferably before drafting commences.

Challenge early, challenge hard

One of the advantages of having a consenting strategy is that it provides a map of the ground on which disagreement with consultees is likely to occur. This doesn’t mean that consultation shouldn’t be treated as primarily a collaborative process; but, inevitably, differences of opinion which are fundamental to a project will arise.

There is no doubt that, despite a general willingness to engage and support low carbon projects, some consultees adopt a precautionary and, at times, highly conservative approach to consenting challenges. This isn’t just a case of nature conservation bodies, a high degree of intransigence is often encountered in respect of shipping, fishing and aviation interests too.

All too often engagement gets stuck in a holding pattern of repeated requests for more data, rather than a resolution of differences of opinion. This cycle often persists into the final weeks of the DCO examination period. Projects need to be geared-up to take on the issues far earlier and far more aggressively, setting up the arguments from an early stage so that an independent arbiter, in this case the Examining Authority considering the DCO application, can decide between potentially conflicting evidence. A good consenting strategy will pre-empt the arguments and seek to provide the necessary evidence in a timely matter, and certainly well before the receipt of Rule 6 and Rule 8 letters during the examination process.

Scoping

Everyone in the sector talks about the frustrations of the scoping process, and particularly about the reluctance of the Planning Inspectorate and consultees to scope issues out of the environmental impact assessment process. Yet, this is a subject area where the quality of the output is notoriously poor, the process always rushed and but the potential gains from a more considered approach are huge.

At times it seems almost as if in the rush to start EIA the purpose of scoping is overlooked so that a box can be ticked and the next stage of development commenced. Projects rarely give sufficient time to scoping – they carry out little or no pre-scoping consultation, engage consultants to pile up desk top studies studies which do little to define or evidence the key issues, cut and paste survey methodologies and rarely seek to challenge the content of scoping opinions.

Looking at recent offshore wind scoping reports running to over 500 pages [4] one wonders what the purpose of the documents actually is. Are one of the main beneficiaries of the scoping process in fact environmental consultancies?

Some ideas to improve the scoping process

  • Focus the scoping report on the scoping exercise i.e. what is the ES going to consider and how is the data going to be collected?

  • What are you surveying for? Why? Avoid cut and paste survey methodologies

  • Don’t rush the scoping process – allow time in the programme to do it properly, it will save time later

  • If possible try to consult on the key issues before submission.

  • Slim the document down – it doesn’t need to be a mini-ES. Get legal advice on the (real) requirements prior to your consultants drafting the scoping report

  • Aggressively pursue scoping out and allow time to challenge the Scoping Opinion

 

Preliminary Environmental Information (PEI) – keep it short

The offshore wind industry should re-consider the practice of delivering the Preliminary Environmental Information (PEI) requirements of the Planning Act as draft environmental statements. PEI is a tool for public engagement. It’s not in anyone’s interest (except perhaps the consultancy teams) to produce PEI running to hundreds (or thousands of pages). There are best practice examples of PEI from other industries which could be usefully followed. If methodologies and findings need to be consulted on in depth with technical consultees then this can take place separately from PEI. Time and money can be saved by following the legal requirements, not over-complicating things.

Design flexibility

As discussed above the NIPA Insights document on design flexibility is an excellent starting point for designing a consenting strategy. I’ve also written an article [5] specifically about this issue and the importance of developers taking more responsibility for the design evolution of their projects. There is the need for greater education across developer businesses about the engineering inputs which the consenting process requires. Many projects could benefit from early contractor engagement.

Pushing for new National Policy Statements (and adhering to the current ones)

I have worked on NSIPs where little attention has been paid to the requirements of the National Policy Statements (NPS), in our case here NPS EN-1 (Energy) and NPS EN-3 (Renewable Energy). While the NPSs are becoming quite dated, they remain the legal basis for the decision making process. Projects would certainly benefit by integrating the NPS requirements more closely into environmental statements and not giving them cursory (and often incorrect) treatment in the policy chapter of the ES. There is no harm in explicitly guiding the Examining Authority through the tangle of EIA information, signposting that the NPS requirements have been met.

Longer term, it would be sensible for the industry collectively (presumably through Renewable UK) to push for revised policy statements. New EIA standards could be comprehensively defined in a revised NPS, thereby by-passing some of the onerous and unnecessary requirements imposed on the industry. Do we need a NPS specifically for offshore wind?

Conclusion – going faster by going slower

Some of the observations made above are contentious, and deliberately so. If we are to hit the 2030 targets we need to change the way we consent offshore wind projects. Some of the challenges may be outside of the sole control of the industry, but many others are not and, as I hope I’ve shown, can be readily dealt with.

I’ll sum up by returning to my initial message – we urgently need more comprehensive consenting strategies. Without them we will only see more delays and refusals of consent. Sometimes on projects all that is necessary to succeed is to slow down, think and pause for breath.

Andrew Prior is the founder of Lucent Energy. He has 15 years experience in the offshore wind sector, working as a statutory consultee, developer, lawyer and consultant. Andrew has advised on over 12GW of offshore wind capacity and supported successful bidders on all of the UK’s commercial leasing rounds.

References

[1] https://windeurope.org/about-wind/reports/our-energy-our-future/

[2] https://www.linkedin.com/posts/activity-6606190017100423169-UpQ8

[3] https://www.linkedin.com/pulse/reflections-waterfronts-land-assembly-major-projects-conference/

[4] e.g. Hornsea 4 – 783 pages, Hornsea 3 – 483 pages , East Anglia ONE North – 552 pages, East Anglia TWO – 554 pages

[5] https://www.linkedin.com/pulse/securing-flexibility-energy-schemes-through-consent-order-prior/