Out-Law Guide 3 min. read
07 Dec 2021, 3:17 pm
In looking to energy solutions, developers must consider the wave of national and local policy aimed at delivering low carbon homes, including ‘Future Homes’ standards, the electrification of heat and mobility, and a move to more decentralised energy grids built on renewables. Corporate structures are available to enable investment aligned with the ‘net zero’ agenda that is affordable.
In relation to infrastructure, checklists of issues such as planning requirements for new roads, schools, utilities and community facilities, as well as raising finance and delivering the new infrastructure and dependencies in the phases of works, can help ensure all issues are anticipated and catered for.
One of the major issues to overcome when building new houses is the shortage in capacity within the existing electricity grid and other utilities infrastructure.
Many developments have struggled to find a market solution for providing this additional capacity because the cost of reinforcement to grid infrastructure is so high: it is usually very difficult for any single developer to recover its potential costs in this respect within its site development costs.
New forms of energy service companies (ESCOs) or multi-utility service companies (MUSCOs) are emerging focused on the ownership of renewable assets on newly built homes
As a solution, there are various mechanisms the public sector can implement to bring forward such investment and recover the utility cost on a fair, proportionate basis as developers build new housing. Examples include the solution at Ebbsfleet Development Corporation and other examples include schemes for the Mayor of London, Warrington Council, Central Bedfordshire Council, Buckinghamshire Council, Guildford Borough Council, Homes England, the Infrastructure and Projects Authority and the Greater Cambridge Partnership. Together, these schemes have provided solutions for over 1GW of power.
Many local authorities in England have declared a climate emergency and are supporting a faster transition to a ‘net zero’ emissions. However, there is a cost in implementing low-carbon solutions and a question over who should pay for it.
With the growth of renewables and better optimisation of local grid infrastructure, new forms of energy service companies (ESCOs) or multi-utility service companies (MUSCOs) are emerging focused on the ownership of renewable assets on newly built homes. These ESCOs or MUSCOs are allowing homeowners to benefit from a sustainable form of low-cost renewable energy without having to foot the cost of the renewable assets at the outset.
As an example, Cornwall Council is developing this option at Langarth Garden Village as it seeks to deliver on its net zero commitments. Under the plans, the council will fund the solar rooftop arrays on each household by taking an airspace roof lease from the property owners. This allows the ESCO to own the asset while households are charged for the energy consumed and pay for the solar assets over their 25-year life. There is also a planned community battery to help store the energy.
It is vital that the utility plan is developed early to avoid potential delays and an inability to deliver the full potential of the garden community.
A wide array of infrastructure is needed to support a sustainable garden community. It will typically include:
It is important to develop a checklist setting out the stages in the development where the infrastructure requirements are triggered, the cost of the provision, the funding sources, accountability for delivery and the management and maintenance responsibility.
All parties to the development need to understand the local factors which may affect infrastructure delivery, such as schools’ capacity and the capacity of utility networks.
It is important to establish where there will be dependencies for phasing and delivering both strategic and local infrastructure, particularly when there are multiple land ownerships, to ensure plans are co-ordinated and the individual infrastructure needs are not considered in isolation and delivered in piecemeal fashion.
A master-list of “triggers” for planning conditions and Section 106 obligations should be formulated. These checklists should be developed at an early stage of the project as they will inform other issues, such as governance arrangements, financing and procurement.
Pinsent Masons has asked 70 market participants about garden communities, and you can find out what they said in our results (40-page / 5MB PDF). And you can find out more about a step by step approach to garden communities in this guide (40-page / 6MB PDF).
03 Dec 2021