The Infrastructure Bill continues to make progress through the UK parliament and the community electricity right provisions contained in Part 5 of the Bill are of particular interest.
These provisions have their origins in the 2014 Community Energy Strategy, which set out the Government's ambition that"by 2015 it will be the norm for communities to be offered the opportunity of some level of ownership of new, commercially developed onshore renewables projects". The Government has been seeking to achieve its objective through a voluntary framework under the Shared Ownership Taskforce but is developing backstop legislative powers under the Infrastructure Bill as a fall back. The provisions in the Bill (Part 5 of which applies in Scotland as well as England and Wales) are enabling provisions allowing the Secretary of State to make regulations giving individuals and/or community groups the rights to purchase a stake in a renewable electricity generation facility in their local area (including both onshore and offshore facilities).
The regulations may set out criteria defining how the qualifying electricity generating facilities are to be defined and tests may be set out as to which communities can exercise the right to buy. This may be by reference to the communities' geographical location relative to the facility, its distance from the facility, the number of residents or any administrative boundaries. The regulations may not apply to any renewable generation facility of under five megawatts total installed capacity. The regulations must specify the type of stakes that may be bought and these may consist of shares, any other interest in a body other than a company, an equitable interest, a right to a royalty related to revenues or a loan. The regulations must specify the minimum size of stake to be offered but this must not exceed 5% of the total capital costs of the development.
More consideration needs to be given to timing of application. Do projects for which a planning application has been lodged fall within the scope of regulations? This is not clear at present from Clause 34 (5) of the Bill which simply states that the regulations may specify"a stage of advancement" after which a facility cannot be subject to the regulations.
The Government has agreed to delay commencement of Part 5 of the Bill until 1st June 2016 to allow more time for progress to be made on the voluntary approach detailed above. In the meantime, we will continue to follow the progress of Part 5 and any regulations with interest.