{"id":142838,"date":"2026-08-07T11:23:20","date_gmt":"2026-08-07T11:23:20","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=142838"},"modified":"2026-08-07T11:23:20","modified_gmt":"2026-08-07T11:23:20","slug":"united-kingdom-renewable-energy","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/united-kingdom-renewable-energy\/","title":{"rendered":"United Kingdom: Renewable Energy"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-142838","comparative_guide","type-comparative_guide","status-publish","hentry","guides-renewable-energy","jurisdictions-united-kingdom"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">White &amp; Case<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2018\/11\/White_Case_logo_RGB-2.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">White &amp; Case<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2018\/11\/White_Case_logo_RGB-2.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Renewable Energy laws and regulations applicable in United Kingdom<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does your jurisdiction have an established renewable energy industry? What are the main types and sizes of current and planned renewable energy projects? What are the current production levels? What is the generation mix (conventional vs renewables) in your country?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The UK has a mature renewable energy industry and is widely regarded as a global leader in offshore wind generation: Hornsea 2, located off the Yorkshire coast, is the largest operational offshore wind farm in the world at 1.3 GW, but will be surpassed by Dogger Bank upon its completion, which has a total planned capacity of 3.6 GW \u2013 enough electricity to power 6 million homes.<\/p>\n<p>The UK also has major converted and purpose built biomass power plants: Drax Power Station (at around 2.6 GW), converted from coal, is the largest coal to biomass power plant in the world. TeesREP (299 MW) is the world\u2019s largest purpose built biomass plant.<\/p>\n<p>The UK also has a major new nuclear programme and Sizewell C, a planned \u00a338 billion twin-unit nuclear power station on the Suffolk coast, reached financial close in November 2025 and is expected to deliver 3.2 GW of low-carbon electricity.<\/p>\n<p>The Renewable Energy Planning Database for April 2026 noted that, for renewables projects over 150 kW, 1,381 are at the planning permission stage and 380 are in construction. By total installed capacity (from largest to smallest), projects in construction are ranked as follows: offshore wind, battery storage, solar PV, onshore wind and EfW incineration.<\/p>\n<p>The share of UK electricity generation from renewable technologies reached a new record high of 143.7 TWh in 2024, being 50.4% of total generation, up from 46.5% the previous year and the first time that renewables has accounted for over half of total generation.<\/p>\n<p>Generation from wind reached a record high, solar output is at a record high, and bioenergy generation has increased by 17%. Fossil fuel reached a record low of 31.8% of generation, with coal generation permanently ceasing in September 2024. Gas remains a significant source of generation at around 30.4%, slightly outpacing wind\u2019s contribution of 29.2%.<\/p>\n<p>The very significant contribution of intermittent generation sources to the energy mix means that the UK is now at the forefront of energy storage, encompassing both battery energy storage systems (BESS) and newer unconventional technologies, including long-duration energy storage such as pumped hydro. Highview Power is developing a portfolio of utility-scale liquid air energy storage projects and has secured around significant backing from major investors.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are your country's net zero\/carbon reduction targets? Are they law or an aspiration?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p class=\"wText\">The Climate Change Act 2008 is the fundamental piece of legislation governing climate law in the UK. The Act originally set a target of reducing greenhouse gas emissions by 80% by 2050 against a 1990 baseline. This was amended by the Climate Change Act 2008 (2050 Target Amendment) Order 2019, which increased the target to net zero greenhouse gas emissions by 2050. The Act also establishes a system of five-year carbon budgets, which caps the total amount of greenhouse gases the UK can emit over each five-year period. While the 2050 target is UK-wide, climate change is a devolved matter, and so the devolved administrations (Scotland, Wales and Northern Ireland) have set their own targets in addition. In particular, <span style=\"color: #131b23\">Scotland has its own more ambitious statutory target of net zero by 2045, set under the Climate Change (Emissions Reduction Targets) (Scotland) Act 2019.<\/span><\/p>\n<p class=\"wText\">The UK\u2019s latest Nationally Determined Contribution as party to the UNFCCC Paris Climate Agreement 2015 is to reduce all greenhouse gas emissions by at least 81% by 2035, compared to 1990 levels (excluding international aviation and shipping emissions).<\/p>\n<p class=\"wText\">The Government also announced in 2021 that all electricity in GB should be generated from clean sources by 2035 to ensure that the UK meets its net zero target. In 2024 this target was brought forward to 2030 by the Clean Power 2030 Action Plan.<\/p>\n<p class=\"wText\">Although there are criticisms around how quickly the binding general targets are being translated into specific initiatives, the legal imperative to meet those targets is there which leads to a strong sense of progress in the industry and a strong level of support from the Government \u2013 and the risk of legal challenge if the targets are seen not to be being met.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a legal definition of 'renewable energy' in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p class=\"wText\">There is no single legal definition of \u2018renewable energy\u2019 in the UK. Instead, the term as used in legislation is tailored to the specific context. For example, the Electricity Act 1989 defines renewable sources for the purposes of generation licensing, the CfD Regulations define eligible renewable technologies for subsidy purposes, and the Renewables Obligation Order has its own list of qualifying sources. In practice, the most commercially significant definition is the CfD eligibility list, which determines which technologies can access government-backed revenue support. Technologies such as biomass and energy-from-waste can fall into a grey area depending on feedstock and efficiency criteria.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Who are the key political and regulatory influencers for renewables industry in your jurisdiction? Is there any national regulatory authority and what is its role in the renewable energy market? Who are the key private sector players that are driving the green renewable energy transition in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p class=\"wText\">The two main UK Government departments responsible for renewable energy policies are (i) the Department for Energy Security and Net Zero (DESNZ) and (ii) the Department for Environment, Food and Rural Affairs (Defra).<\/p>\n<p class=\"wText\">DESNZ is responsible for delivering security of energy supply, ensuring properly functioning energy markets, encouraging energy efficiency and seizing the opportunities of net zero to lead the world in new green industries.<\/p>\n<p class=\"wText\">Defra is responsible for improving and protecting the environment and also aims to grow a green economy and sustain thriving rural communities.<\/p>\n<p class=\"wText\">The Scottish and Welsh governments also support renewable energy in their nations, setting their own energy strategies. In Northern Ireland the Department for the Economy is responsible for policy and strategy on energy including renewables.<\/p>\n<p class=\"wText\">DESNZ is supported by other public bodies, including the Gas and Electricity Markets Authority (GEMA) and the Office of Gas and Electricity Markets (Ofgem), together normally referred to as Ofgem. Ofgem is the independent economic regulator of gas and electricity markets in England, Scotland and Wales under the Utilities Act 2000 and is accountable to the UK Parliament for the performance of its functions and duties. Northern Ireland has a separate Utility Regulator.<\/p>\n<p class=\"wText\">The Energy Act 2023 established a new independent body, referred to in the Act as the Independent Systems Operator and Planner, but known as the National Energy Systems Operator (NESO). NESO is tasked with strategic oversight across GB\u2019s electricity and gas systems, meaning it plans ahead and also acts as the operator of the system and accepts or rejects requests for connection.<\/p>\n<p class=\"wText\">A new publicly owned energy company, Great British Energy, has been set up to accelerate the roll-out of renewable energy projects in Great Britain, including local community energy projects and co-investing in clean energy supply chains and manufacturing, alongside the Crown Estate and the National Wealth Fund. In the private sector, the UK market is driven by a mix of major utilities, independent developers and financial investors.<\/p>\n<p class=\"wText\">Key developers and operators include SSE Renewables, ScottishPower Renewables (Iberdrola), \u00d8rsted, RWE, Equinor, EDF Renewables, Octopus Energy and TotalEnergies, alongside specialist developers such as Corio Generation and Lightsource bp.<\/p>\n<p class=\"wText\">Infrastructure funds and institutional investors are also prominent asset owners and co-investors.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the approaches businesses are taking to access renewable energy? Are some solutions easier to implement than others? If there was one emerging example of how businesses are engaging in renewable energy, what would that be? For example, purchasing green power from a supplier, direct corporate PPAs or use of assets like roofs to generate solar or wind?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p class=\"wText\">The GB market continues to offer various options for businesses that wish to access renewable energy. Probably the most commonplace is simply to buy energy from a supplier on a green tariff.<\/p>\n<p class=\"wText\">Corporate PPAs, whereby an end user enters into a power purchase agreement with a renewable energy generator for the output of the renewable energy asset, continue to be popular. These arrangements are best suited to larger, more sophisticated energy buyers who can establish back-to-back arrangements with an energy supplier to enable the renewable energy to be transferred or sleeved across the grid to the customer. In addition, negotiating a corporate PPA and the associated documentation can be a lengthy process involving significant amounts of time and professional fees so is not generally used by smaller businesses.<\/p>\n<p class=\"wText\">Very large multinational corporates also use financially settled corporate PPAs to obtain green certificates which can then be used for carbon reporting. No electricity is transferred under such PPAs, only the green certificate associated with the electricity produced by the asset. The parties usually agree a fixed strike price per MWh of electricity produced and pay each other difference payments based on an agreed fixed strike price and the market price.<\/p>\n<p class=\"wText\">On site generation (roof top solar, wind) is also an option for end users with suitable sites. There is continued interest in private wire PPAs, where power is generated on site and supplied across a dedicated private connection. Much of the interest derives from the fact that using a private wire reduces the amount paid by the end user because the various industry charges which a supplier from the grid must pass through to its customers are avoided.<\/p>\n<p class=\"wText\">The regulatory regime governing private wires is complicated, which can put end users off using these arrangements and there are various physical constraints around finding a site with suitable characteristics to accommodate end user, generation plant and the connection and private wire. There is also ongoing scrutiny from Ofgem to ensure that network charges are distributed fairly across all users which may result in private wire benefits being eroded or even removed entirely in future.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Has the business approach noticeably changed in the last year in its engagement with renewable energy? If it has why is this (e.g. because of ESG, Paris Agreement, price spikes, political or regulatory change)? What are the key developments in renewable energy in your country over the last 12 months?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p class=\"wText\">Businesses continue to engage with renewable energy and wider ESG issues in the UK. The effect of recent geopolitical events has only intensified focus as the conflicts in Ukraine and the Middle East continue, particularly in relation to the closure of the Strait of Hormuz in early 2026. This has caused a noticeable shift in the way that renewables and the energy transition is viewed in that the conversation is now focused on energy security and the need to diversify and localize supply chains. Given the significant offshore wind resources which GB benefits from, there has been a much keener focus on how energy self-sufficiency can be attained using domestically available resources, including energy storage and demand management.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How visible and mature are discussions in business around reducing carbon emissions; and how much support is being given from a political and regulatory perspective to this area (including energy efficiency)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p class=\"wText\">The legally binding nature of GB\u2019s net zero targets ensures that ESG in general, and the reduction in carbon emissions in particular, remains a key focus for business. Shareholders and institutional investors also remain committed to ESG policies. The recent geopolitical instability and resulting increase in energy prices and concerns over energy security and affordability are also ensuring that energy security and efficiency remain in the spotlight.<\/p>\n<p class=\"wText\">There is a great deal of political and regulatory support for clean energy, with 2025 seeing the publication of the Clean Energy Industries Sector Plan, the enactment of the Planning and Infrastructure Act and the adoption of a 2035 Emissions Target which formally commits the UK to cutting all greenhouse gas emissions by at least 81% compared to 1990 levels.<\/p>\n<p class=\"wText\">The Government continues its support for new large-scale nuclear, small modular reactors, nuclear fusion, carbon capture and storage, hydrogen and sustainable aviation fuel.<\/p>\n<p class=\"wText\">Energy efficiency is still something of a poor relation (albeit with renewed focus due to energy affordability and supply concerns). Energy suppliers are required to provide various types of support to domestic customers under the Energy Company Obligation and the Great British Insulation Scheme, and there are various grants available to householders for energy efficiency measures in the home.<\/p>\n<p class=\"wText\">Support for business is provided through various funds which provide grants, for example, to fund R&amp;D, energy intensive industries seeking to deploy decarbonisation and energy efficiency technologies, by means of tax relief, loans and the mandatory Energy Savings Opportunity Scheme, which requires businesses over a certain size to carry out energy audits every 4 years to identify energy saving measures.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How are rights to explore\/set up, interconnect or transfer renewable energy projects, such as solar or wind farms, granted? How do these differ based on the source of energy, i.e. solar, wind (on and offshore), nuclear, carbon capture, hydrogen, CHP, hydropower, geothermal; biomass; battery energy storage systems (BESS) and biomethane?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p class=\"wText\">For offshore projects, a licence is needed from the Crown Estate or Crown Estate Scotland, which owns rights to the seabed out to 12 nautical miles. These are normally granted by auction.<\/p>\n<p class=\"wText\">A marine licence from the Marine Management Organisation (MMO) may be needed. For onshore projects, planning permission or a development consent order is needed, depending on the size of the project. In Scotland, a consent order under section 36 of the Electricity Act 1989 is needed, and in Northern Ireland the construction, extension or operation of a generating station over 10MW (onshore) or 1MW (offshore) needs consent under Article 39 of the Electricity (Northern Ireland) Order 1992.<\/p>\n<p class=\"wText\">A generation licence is usually needed, unless the project falls within a class exemption (e.g. onsite generation). Environmental consents may be needed. No specific rights are needed to transfer a renewable energy project, unless it receives a subsidy, in which case the terms of the relevant scheme will need to be checked to see if transfer is permitted.<\/p>\n<p class=\"wText\">In summary, the main method used to \u201cstop\u201d a renewable project is the planning system, with onshore wind largely being blocked in England due to planning rules, although these restrictions are now being relaxed.<\/p>\n<p class=\"wText\">Development of renewable energy projects still largely needs a subsidy and the main method is the Contract for Difference, for which onshore wind over 5MW, offshore wind (including floating), solar PV over 5MW, marine, geothermal, hydro and some waste technologies are eligible.<\/p>\n<p class=\"wText\">Nuclear projects require a development consent order from the Secretary of State as they are nationally significant infrastructure projects under the Planning Act 2008. A nuclear project also requires grant of a nuclear site licence under the Nuclear Installations Act 1965, which is granted by the Office for Nuclear Regulation since the enactment of the Energy Act 2013. These site licences are non-transferable. The ONR evaluates the safety and suitability of the site and may impose conditions such as provision for maintaining an efficient radiation detection and recording system, design or siting, requirements or specific preparations for dealing with accidents.<\/p>\n<p class=\"wText\">A standalone battery energy storage system (BESS) does not require a development consent order under the Planning Act 2008, as the Infrastructure Planning (Electricity Storage Facilities) Order 2020 excludes exempt electricity storage facilities from the NSIP regime. Section 36 consent under the Electricity Act 1989 is similarly disapplied by the Electricity Storage Facilities (Exemption) (England and Wales) Order 2020. Planning permission from the local planning authority is required.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is the government directly involved with the renewables industry (auctions etc)? Are there government-owned renewables companies or are there plans for one?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p class=\"wText\">The Government is involved directly in the renewables industry. The main public bodies in GB include the Department for Energy Security and Net Zero (DESNZ) and the energy ministries in the devolved administrations. In Northern Ireland it is the Department for the Economy.<\/p>\n<p class=\"wText\">See the answer to Question 5 above for more details on their roles. The Government also directly manages the CfD auction process, sets energy policy targets and administers capital support for emerging technologies such as CCUS and hydrogen.<\/p>\n<p class=\"wText\">Ofgem is a non-ministerial government department that regulates the energy industry in GB and administers environmental programmes and sustainability schemes on the government\u2019s behalf.<\/p>\n<p class=\"wText\">There is also the Low Carbon Contracts Company (LCCC) and the Electricity Settlements Company (ESC), both of which are government-owned entities.<\/p>\n<p class=\"wText\">The LCCC enters into Contracts for Difference (CfDs) to offtake from eligible projects at a fixed \u2018strike price\u2019, giving revenue certainty and enabling projects to be bankable.<\/p>\n<p class=\"wText\">In 2024 the NESO was established, under powers set out in the Energy Act 2023. The NESO is a publicly-owned body designated as the independent energy system operator and planner. NESO is a public corporation that is independent from other commercial energy interests as well as from operational control of government. The government is the sole shareholder of NESO and thus retains ultimate responsibility, however it does not exercise control over NESO\u2019s operations.<\/p>\n<p class=\"wText\">NESO is licensed and regulated by Ofgem and funded by consumers through price control arrangements. Northern Ireland\u2019s equivalent of Ofgem is the Northern Ireland Authority for Utility Regulation (NIAUR), an independent public body that regulates the electricity, gas, and water and sewerage industries in Northern Ireland. Scotland is establishing a National Public Energy Agency, called Heat and Energy Efficiency Scotland, to accelerate the decarbonisation of heat across Scotland.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please provide a brief overview of key legislation and regulation in the renewable energy sector, including any anticipated legislative proposals.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p class=\"wText\">The Government remains engaged and active in the renewables sector. Recent years have seen numerous policy papers from successive governments. 2020 saw the publication of the Ten Point Plan for a Green Industrial Revolution and the Energy White Paper, followed by the Net Zero Strategy (2021), the British Energy Security Strategy (2022), Powering Up Britain (2023), the Clean Power 2030 Action Plan (2024), the establishment of Great British Energy and the National Wealth Fund (2024), the Clean Flexibility Roadmap and the Clean Energy Industries Sector Plan (both 2025). Generally speaking, as between successive governments of different political inclinations, there has been very little reversal of previous policies, and each government has built on the framework adopted by its predecessor, which has allowed for a good deal of continuity.<\/p>\n<p class=\"wText\">The key legislation for the renewable sector is the Energy Act 2013 which introduced Electricity Market Reform (EMR) &#8211; allowing long-term support for renewable electricity generation. This established the Contracts for Difference and Capacity Market regimes, which remain the backbone of the renewable and clean energy sectors and are governed by their own regulations. New initiatives to encourage investment into the development of hydrogen, carbon capture and storage and sustainable aviation fuel utilise mechanisms that are based on the CfD model and specific regulations issued under the powers granted to the Secretary of State under the Energy Act 2013.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any government incentive schemes promoting renewable energy (direct or indirect)? For example, are there any special tax deductions or subsidies (including Contracts for Difference) offered? Equally, are there any disincentives?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The Government provides various incentives to encourage the development of and investment into the renewable energy industry. In GB, the Renewables Obligation (RO) scheme places an obligation on electricity suppliers to source an increasing proportion of electricity from renewable sources. Renewable generators earned money by selling RO certificates to suppliers to fulfil this obligation. This scheme closed to new entrants in 2017 but the support lasts for 20 years. Therefore, a lot of live projects still sit under this regime.<\/p>\n<p>The Contract for Difference (CfD) is the replacement for the RO and offers a set \u2018strike price\u2019 to generators for their electricity. Normally generators bid for a contract in an auction round, which now takes place annually. The CfD makes a project bankable by guaranteeing a fixed price regardless of market fluctuations, although if market prices rise above the strike price the generator must pay back the difference, ensuring they do not make undue profit. Most types of renewable projects can bid for a CfD and they are grouped into different \u2018pots\u2019 each with their own budget so that more expensive less-established technologies are not competing with cheaper more established technologies. The pots for the 2024 auction round (AR6) were:<\/p>\n<ul>\n<li>Pot 1: Energy from Waste with CHP, Hydro (&gt;5MW and &lt;5MW), Remote Island Wind (&gt;5MW), Sewage Gas and Solar Photovoltaic (PV) (&gt;5MW);<\/li>\n<li>Pot 2: Advanced Conversion Technologies, Anaerobic Digestion (&gt;5MW), Dedicated Biomass with CHP, Floating Offshore Wind, Geothermal, Tidal Stream and Wave; and<\/li>\n<li>Pot 3: Offshore Wind. Projects below 5MW are normally excluded from the scheme, as are nuclear projects and coal to biomass conversions.<\/li>\n<\/ul>\n<p>Renewable hydrogen projects are also excluded, although an equivalent support scheme is being developed and should be available in the next few years. For smaller projects there was a Feed-in Tariff (FiT) subsidy scheme which closed to new entrants in 2019. It is replaced by the Smart Export Guarantee, where energy suppliers pay small generators for the electricity they generate. This mainly affects domestic installations and smaller on-site solar PV installations such as panels on warehouse roofs.<\/p>\n<p>There is the Renewable Transport Fuel Obligation (RTFO) for renewable transport fuel such as biofuels and hydrogen. This operates in a similar way to the RO, where suppliers of liquid fossil fuel for transport use have to supply a certain proportion of renewable fuel which they prove by buying RTFO certificates or paying a buy-out price.<\/p>\n<p>In Northern Ireland there was the Northern Ireland Renewables Obligation (NIRO) which operated on a similar basis to the GB RO scheme. The NIRO closed to new entrants on 31 March 2017. The Department for the Economy has been consulting on a new Renewable Energy Support Scheme for Northern Ireland, which will be similar to the GB CfD. The high-level design of the scheme was published on 9 April 2024 and the first auction was expected to take place in 2025 but is yet to take place.<\/p>\n<p>The UK Government is developing support schemes for carbon capture, use and storage (CCUS) and renewable hydrogen production. These will operate in a broadly similar way to the CfD but with extra capital support in recognition of the high upfront costs of these new technologies. There are also support schemes (on a regulated asset basis plus a subsidy top up) for the carbon dioxide and hydrogen transport and storage infrastructure that is needed to support this.<\/p>\n<p>There are several legislative disincentives to renewables. The Electricity Generator Levy (Finance (No. 2) Act 2023), now at 55% of exceptional generation receipts from July 2026, taxes renewable generators&#8217; above-benchmark revenues and is non-deductible for corporation tax. EIS and VCT rules exclude subsidised renewable generation as a qualifying activity.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How does the structure of the natural gas industry in your country impact the price of electricity? Are there any plans to de-link the price of renewable electricity from gas prices? Are there plans in your jurisdiction to keep open coal plants originally scheduled for retirement?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p class=\"wText\">The UK\u2019s electricity market is based on a marginal cost model whereby the last and most expensive generation to be dispatched sets the market price. This means that typically the greenest, cheapest power is dispatched first, but whenever gas is needed to meet fluctuations in production or demand, it sets the market price. So if the gas market price spikes, which it is wont to do when the balance of production and demand is tight, the electricity price is driven upwards.<\/p>\n<p class=\"wText\">Gas price volatility has been particularly acute in recent years, starting with the conflict in Ukraine and worsening again with the commencement of hostilities in the Middle East. The government announced in 2026 that it was bringing in measures to decouple the gas and electricity prices, as described above by offering a voluntary fixed price contract to renewable generators without a CfD and increasing the levy on \u201cexcess profits\u201d earned by generators. Arguably, this does not address the underlying issue, which will require more fundamental market reform.<\/p>\n<p class=\"wText\">Ofgem is running a process known as the Reform of Electricity Market Arrangements (REMA) which includes looking at ways to improve the use of low carbon flexibility services as a way to manage fluctuations in production and demand. The perennial question of whether the UK will move to zonal rather than national electricity pricing was resolved in July 2025 when the Government announced (under REMA) that it would not implement zonal pricing, opting instead to retain a single national wholesale price under a \u201cReformed National Pricing\u201d model. There will, however, be balancing reforms to better balance the grid. The aim is that these improvements in grid management and balancing will mean that gas is not needed as often to act as the provider of balancing generation.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the significant barriers that impede both the renewables industry and businesses' access to renewable energy? For example, permitting, grid delays, credit worthiness of counterparties, restrictions on foreign investment, regulatory constraints on acquisitions; disputes\/challenges?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Planning and grid connection are the two most significant delaying factors for UK renewable energy projects. Historical planning policies which made obtaining planning permission for onshore wind projects extremely challenging were relaxed several years ago and in 2025 the Planning and Infrastructure Act became law. The Act is designed to streamline the planning process and remove blockages to the development of new critical infrastructure, including renewable energy projects. As described above, the Environment Agency will now act as Lead Environmental Regulator under the Act and provide a single point of contact for developers.<\/p>\n<p>Grid delays are a significant problem for anyone attempting to connect to the network. The level of upgrades required at both the distribution and transmission level to accommodate the proposed levels of renewable energy development is significant and the relevant grid operators are struggling to keep up.\u00a0 An additional problem has been that the previous \u201cfirst come, first served\u201d approach to connecting new customers resulted in a significant queue of potential connectees, some of whom had made speculative connection applications in order to add value to development land. As a result, NESO introduced a connections reform process, which is in the process of reordering the connection queue by prioritising projects which are (a) most ready and (b) strategically necessary. The queue reform process is taking longer than expected but should be complete by early 2027. Thereafter connection applications will be made in specific application windows and will be assessed against technical readiness and alignment with the strategic goals which will be set by NESO.<\/p>\n<p>Generally, there are very few restrictions on foreign investment in the UK energy sector. The National Security and Investment Act 2021 does require notification of any acquisition of a generating asset with a capacity of 100MW or more or where the acquiring company plus its group companies and the entity it is acquiring together have a cumulated generation or aggregation capacity of 1GW or more.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the key contracts you typically expect to see in a new-build renewable energy project?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The suite of contracts will vary depending on the technology type, the financing structure and whether the project is procuring a CfD or operating on a merchant or quasi-merchant basis, but a new-build renewable energy project will typically have:<\/p>\n<ul>\n<li>A shareholder\u2019s agreement or joint venture agreement between the parties sponsoring the project;<\/li>\n<li>An option agreement with the landowner, granting the right to use the land during development, followed by a long-term lease;<\/li>\n<li>Grid Connection Agreement;<\/li>\n<li>Revenue agreements, e.g. a Contract for Difference awarded by the Low Carbon Contracts Company or a Power Purchase Agreement with an offtaker;<\/li>\n<li>Construction agreements;<\/li>\n<li>Operation and Maintenance Contracts \/ Long-Term Service Agreements;<\/li>\n<li>Financing Agreements (unless funded solely by equity); and<\/li>\n<li>Insurance programme.<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any restrictions on the import or export of renewable energy, local content obligations or domestic supply obligations? What are the impacts (either actual or expected) in your jurisdiction of the implementation of the Net Zero Industry Act (EU) Regulation 2024\/1735 or the \u201cforeign entity of concern\u201d regulations in the U.S.?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p class=\"wText\">There are no restrictions on the export of renewable energy. The Energy Security Plan envisages more exports of electricity in future as the deployment of offshore wind continues. The Government is pursuing a growth-agenda which is designed to support and foster export industries.<\/p>\n<p class=\"wText\">There are local content obligations for the Contract for Difference support for larger projects. For AR8, the Government has also introduced a Clean Industry Bonus, which provides additional payments to offshore wind projects that invest in sustainable UK supply chains. If a project of 300MW or more (or any size of floating offshore wind project) wishes to benefit from the CfD scheme it must complete a Supply Chain Plan questionnaire. This requires them to state the percentage of \u2018UK content\u2019 that the project will have. Developers who cannot show a sufficient level of UK content in their project will not qualify for the CfD scheme.<\/p>\n<p class=\"wText\">However, there is an informal move to have more local content, and some project sponsors have implemented their own local content schemes as part of their efforts to secure community support and permits.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How has deployment of renewables been impacted in the last year by geopolitical uncertainties and other non-country specific factors: For example, the conflict in the Middle East, financing costs, changing tariff regimes, supply chain or taxes or subsidies (e.g. the impact of the One, Big, Beautiful Bill on the tax credits and other incentives created by the Inflation Reduction Act in the U.S.)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p class=\"wText\">2025 was a record year for renewable generation in the UK, with a record 52.5% of all generation coming from renewable sources. The results of CfD Allocation Rounds 6, 7 and 7a also indicate that the deployment of renewables projects continues to surge. Data on the number of planning permission approvals for renewables also shows significant year-on-year increases in both the number of projects and size\/scale. However, worldwide geopolitics, including the conflicts in Ukraine and the Middle East, continue to impact the sector and overall investor confidence. Rising interest rates increased the cost of capital for project finance in 2023 and 2024, although rates have since stabilised. Global supply chain constraints, particularly for offshore wind turbine components and installation vessels, continue to affect project timelines. The US Inflation Reduction Act has drawn some investment toward the US market, though the UK\u2019s established CfD framework and deep project pipeline have helped maintain its competitiveness.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Could you provide a brief overview of the major projects that are currently happening in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>A number of prominent offshore wind projects have progressed over the past twelve months. The East Anglia 3 offshore wind project is expected to be fully operational by the end of 2026. Once complete, East Anglia 3 will have a total capacity of around 1.4GW, capable of powering more than 1.3 million homes. Green Volt, a floating offshore wind farm, is expected to reach financial close in 2026, providing 560MW of additional offshore wind capacity on completion of construction. The Dogger Bank South Offshore Wind Farms were granted development consent in May 2026. They will consist of two offshore wind farms: Dogger Bank South West and Dogger Bank South East, alongside associated infrastructure. Each of the offshore wind farms will have a capacity of 1.5GW. The North Falls Offshore Wind Farm, a joint venture between SSE Renewables and RWE Offshore Wind, also received development consent in May 2026. The project will consist of up to 57 wind turbine generators and is expected to add 1GW of generating capacity.<\/p>\n<p>Springwell Solar Farm is an 800MW solar power facility with BESS capabilities, located in Lincolnshire. The project was approved in April 2026 and, once operational, is expected to be one of the largest power-producing solar farms in the UK, capable of powering approximately 180,000 homes. A decision on One Earth Solar Farm, a proposed solar generation and BESS project with 740MW of generation capacity, is expected in July 2026.<\/p>\n<p>Approximately 6.5GW of operational battery storage capacity is currently under construction across the UK. The Hams Hall BESS project in North Warwickshire is expected to deliver over 1.2GW of total storage capacity. Its first phase will initially deliver 350MW and is expected to reach commercial operations in Q4 2026.<\/p>\n<p>Multiple new high voltage direct current subsea interconnectors have been approved for construction, including the Arnish to Beauly link and the Spittal to Peterhead link. Together, these projects will enable 3.8GW of clean power generated through offshore wind to be transported through the grid.<\/p>\n<p>Evero, a low-carbon energy-from-waste wood company, has been selected by the UK Government to transform its Ince Biomass plant into the UK\u2019s first Bioenergy with Carbon Capture and Storage (BECCS) facility. The project, which will connect to the HyNet Cluster network and use Mitsubishi Heavy Industries\u2019 carbon capture technology, aims to permanently remove 217,000 tonnes of CO\u2082 per year, process 170,000 tonnes of waste wood annually and power over 100,000 homes and businesses, with the retrofit targeted for completion by 2029.<\/p>\n<p>The Lighthouse Green Fuels (LGF) project is a \u00a32 billion UK initiative to develop one of the world\u2019s largest second-generation Sustainable Aviation Fuel (SAF) refineries. Located in Seal Sands, Teesside, it will convert sustainably sourced biomass into SAF. LGF is owned and developed by the Alfanar Group. By integrating with Carbon Capture and Storage (CCS), the plant aims to avoid up to 750,000 tonnes of CO\u2082 annually. Front-End Engineering Design (FEED) was completed in May 2026, making it engineering-ready. The project targets a Final Investment Decision in 2027.<a href=\"#_ftnref1\" name=\"_ftn1\"><\/a><\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How are renewables projects commonly financed in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p class=\"wText\">Project finance is a common structure for large-scale renewable energy projects in the UK, particularly offshore wind and energy storage projects. A CfD or PPA providing long-term revenue certainty is viewed positively by project finance lenders, but projects with a high-level of merchant exposure have also been able to obtain project finance. Leverage is typically in the range of 60 to 80% of total project cost.<\/p>\n<p class=\"wText\">A trend seen in the UK (and more broadly across Europe) has seen sponsors financing a pipeline of renewable energy projects at varying stages of development on a portfolio basis, often commencing with early-stage development expenditure financing at a holding company level which envisages and permits, subject to agreed conditions, a pipeline of individual project-level financings being entered into in line with an agreed development plan. By consolidating multiple renewable energy assets (such as solar, wind and battery storage) into a unified portfolio, developers and sponsors can achieve economies of scale, reduce transaction costs and enhance the attractiveness of the investment proposition to both lenders and investors. This approach facilitates more efficient capital deployment and can accelerate the recycling of equity, enabling sponsors to reinvest in new projects more swiftly.<\/p>\n<p class=\"wText\">There is a continuing trend of private debt and energy\/infrastructure funds stepping in to bridge funding gaps and providing finance to renewable energy projects at both construction and operations stages.<\/p>\n<p class=\"wText\">The National Wealth Fund also provides debt, equity and guarantees, to renewable energy projects seeking to scale-up and catalyse private sector capital.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">6027<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/142838","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=142838"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}