Two of the UK’s leading free market think tanks have lent their support to solar projects on farmland, and have raised concerns over the Government’s potential tightening of planning rules on agricultural sites.
Andy Mayer, energy analyst at the Institute of Economic Affairs, told City A.M. it was “disappointing” the Government was cracking down on projects in “the middle of an energy and growth crisis.”
He said: “They claim it’s about food security, but the UK depends on trade for half our food, and modern tastes are geared towards many things we will never grow. It’s really about nimbyism. The Government, whatever they say at climate summits, are more worried by angry resident associations than warmer summers.”
He argued the best decision would be to cut regulation let landowners decide on the best use of their land, but did not expect to see any meaningful progress on the issue before the election in two years time.
Emily Fielder, head of communications at the Adam Smith Institute, slammed the prospect of cuts to potential solar farm developments – warning it would undermine the UK’s push for supply security, and cheaper, greener energy.
She said: “Drastically curbing the amount of land available for solar farms during an energy crisis is nonsensical. This de facto ban on solar will keep energy prices high, weaken our energy security and risk investment in renewables.
“If solar were to be scaled up in line with the Government’s net zero target it would still cover less than the amount of land used for golf courses. The Government cannot claim to be pursuing a green agenda while it restricts the use of cheap renewables.”
The Government has been approached for comment.
Solar fury as Government aims for food security
The dire warnings from both think tanks follow growing concerns more farmland could be made ineligible for solar projects.
Last week, Environment Secretary Thérèse Coffey indicated to Parliament she would pursue the policy plans proposed under the Former Prime Minister Liz Truss, which would block solar power from most farmland.
Downing Street is eager to ensure food security, to make sure enough land is available to meet the UK’s consumption needs.
During her fleeting tenure, DEFRA officials were considering redefining “best and most versatile” land (BMV) for farming to include category ‘three b’ – alongside current guidance that categorises one to ‘three a’ as being vital for food security.
This would mean 60 per cent of all agricultural land would be off-limits to solar farms.
Currently land is graded one to five in terms of quality for food production.
Land in grades four and five is typically hilly, with poor soil composition, and far away from large towns and cities.
This makes it unsuitable not just for farming, but also for most renewable projects – as it would require more expensive networks of wiring and transmission cables to transport the energy to populated areas.
This has meant the bulk of upcoming solar projects have been focused on ‘three b’ sites.
Planning guidance says that development on BMV land should be avoided, even if planning authorities may take other considerations into account – with one of the UK’s largest solar farms on grade one land as it helps power flood defences.
It is unclear what Prime Minister Rishi Sunak’s position is on new solar projects on farmland.
However, during the leadership campaign this summer, – he called for the “best agricultural land” to be protected from housing, large-scale solar farms and rewilding, while pushing instead for rooftop solar.
The Government has pledged to significantly ramp up solar power generation as part of its energy security strategy, unveiled in April, targeting expansion from 14GW to 70GW by 2035.
Industry body hits out at generators tax
This ambitious target meant the renewables sector hoped Sunak would reverse Truss’ decision – as the country needs to significantly increase renewable generation to meet its net zero goals and energy independence targets.
Chris Hewett, chief executive of Solar Energy UK told City A.M. he was surprised by the latest developments – having expected Truss’ policy to be disregarded alongside much of her agenda.
He said: “The new Prime Minister’s support for renewables at COP27, as a means to deliver economic growth and energy security, reinforced that message. It is concerning that Thérèse Coffey has not clarified the position of her own department but existing policy already balances energy and food security effectively.”
It currently forecasts 1GW of solar generation this year, and a further 2GW next year – but those predictions were made prior to the latest proposals to cut down on farmland development.
The trade association is also highly critical of the Government’s decision to impose a new levy on electricity generators.
In a statement, Hewett accused the Government of “tilting the playing field against renewables” amid an energy price crisis caused by the UK’s reliance on gas.
He was particularly critical of the lack of investment relief inccluded in the new tax, compared to the 91p in the pound rate for oil and gas projects in the North Sea.
He said: “The Chancellor should be taking every opportunity to encourage investment in clean energy. Yet there will be no tax relief for companies investing in meeting the government’s target of 70GW of solar capacity by 2035 – unlike investments in oil and gas production, which will be taxed less than fossil-free generators.
The Electricity Generator Levy replaces the proposed Cost Plus Revenue Limit proposed in October.
It looks to harness the bumper revenues for renewable projects with legacy deals tied to the wholesale gas price – which has proved highly lucrative since Russia’s invasion of Ukraine.
This does not include electricity generated under the modern contract for difference schemes, however legacy generators still represent around 40 per cent of the renewables mix.
Chancellor Jeremy Hunt unveiled the temporary tax at the autumn statement, which imposes a new 45 per cent levy on electricity sold above £75MW.
This is approximately 1.5 times the average price of electricity over the last decade.
It is expected to raise over £14bn between 2023 and 2028 to help fund support for households and businesses suffering from record energy bills.
However, unlike the Energy Profits Levy for oil and gas companies, it does not come with an 80 per cent relief rate for investments – which equates to 91p in the pound for projects.