Electricity Act 1989 applications - proposed fee changes: consultation analysis

2. Respondents' Views On Proposed Changes To Fees

This section provides a summary of respondents' views on the proposed changes to application fees. The references to "Table A" in the questions mean Table A of the consultation paper which sets out proposed fees.

Question 1: Do you agree or disagree with the proposed application fees as set out at Table A? Please say why you have arrived at this view.

A total of 25 respondents answered the "closed" consultation question on whether application fees should be revised. 8 respondents agreed, 9 disagreed, and 8 were unsure or unclear.

• 2 electricity generation developers agreed, 6 disagreed and 2 were unclear
• 1 electricity networks company agreed and 1 was unsure
• the developer organisation did not clearly state if it agreed, disagreed or was unsure, but considered it was unable to accurately respond on the basis of the information given, which was interpreted as "unsure"
• 2 planning authorities agreed, 1 planning authority disagreed and 5 planning authorities/other public bodies were unsure
• the other membership body agreed
• 2 individuals agreed and 1 disagreed

The respondent types showing most widespread agreement with the proposal in Question 1 were an electricity networks company, the other membership body and individuals. There was also a demonstration of support in principle for proposed fee increases from planning authorities in their responses.

The respondent types showing most widespread disagreement with the proposal in Question 1 were electricity generation developers.

9 respondents were unsure or unclear, the majority of which were planning and other public sector bodies.

There follows a summary of points raised by respondents, listed in descending order of number of respondents raising each point. The number in brackets next to each indicates the number of respondents making the point in response to this question. It should be noted that some respondents repeated the same point across responses to more than one question.

• increasing application fees to provide cost recovery is supported in principle (17)
• the proposed 20% increase appears to be proportionate and reflects the level of work required (10)
• there should be improvements and efficiencies in the consenting process if fees are to increase (7)
• funding and resourcing provided to planning authorities should be adequate to reflect the costs to planning authorities of processing the applications as statutory consultees (6)
• the increase in revenue from the increased fees should be used to improve consenting timescales, staffing and the consenting service (6)
• the Scottish Government should provide greater detail on improvements to be made to the service before any increase in fees (5)
• there should be greater clarity and certainty on the proportion of fees to be paid to planning authorities (5)
• the costs for planning authorities where an application is referred for public inquiry exceed the proportion of the current and proposed application fees that would be paid to the planning authority. This is a disadvantage given it is public authority objections that trigger public inquiries (4)
• introducing new bandings is reasonable given the increasing scale of development (3)
• the proposed fees for variation applications, particularly those that do not increase capacity, are too high and not justified by evidence (3)
• the resources/funds for statutory consultees more generally should be increased (2)
• there should be greater clarity on how any increased fees will be used to improve the level of service provided by planning authorities and statutory consultees on applications (2)
• the threshold of projects requiring section 36 consents should be increased to 100MW capacity or more rather than the threshold remaining at 50MW (2)
• application fees have already been changed recently, in 2019 (2)
• the proposed fees are excessive (1)
• fees for projects over 500MW are considerably higher than the general proposed increase of 20% (1)
• the bandings below 300MW are not required and instead the banding should be 50MW to 300MW, and the fee for that banding should be the proposed 50 – 100MW fee (1)
• the total application fee could be paid in stages (pre-application and at application stage) to allow earlier cost recovery for the resource needed to engage in the pre-application stage (1)
• the potential for cost savings should be fully and openly explored before increases to application fees are implemented (1)
• there should be fixed maximum consenting timeframes for section 37 applications (1)
• there should be no penalty for the establishment of renewable power generation (1)
• the scale of fees should be index-linked to keep pace with inflation (1)
• the fee increase is more commensurate with the natural resource worth (1)
• it is unclear what impact the 20% cost increase is likely to have on project development and therefore on delivery of net-zero (1)
• further proposed increases will lead to some projects which are currently marginal in terms of viability becoming unviable (1)
• query why a second consultation on fees is being carried out if the 2019 consultation did not resolve the existing shortfall in cost recovery (1)
• measureable performance improvements or key performance indicators should be introduced for Scottish Government consenting services (1)
• whilst processing agreements are not widely used in section 36 applications, their introduction would put in place a formal working framework between developers and regulators, and could include consultee expectations (1)
• the Scottish Ministers should ensure resource is available to increase the pipeline of planners and develop the necessary skills in the existing workforce (1)
• a more even spread of fees for projects above 500MW would be more appropriate (1)

Question 2: Do you agree or disagree with the new bandings for developments with a capacity greater than 500MW as set out at Table A? Please say why you have arrived at this view.

A total of 24 respondents answered the "closed" consultation question on whether they agreed or disagreed with new bandings for developments with a capacity greater than 500MW. 11 respondents agreed, 7 disagreed, and 6 were unsure or unclear. One respondent, an electricity networks company, confirmed it had no response to this question.

• 2 electricity generation developers agreed, 6 disagreed and 2 were unclear
• 1 electricity networks company was unsure and 1 did not respond
• the developer organisation did not clearly state if it agreed, disagreed or was unsure, but considered it was unable to accurately respond on the basis of the information given, which was interpreted as "unsure"
• 6 planning authorities agreed, no planning authorities/other public bodies disagreed and 2 planning authorities/other public bodies were unsure
• the other membership body agreed
• 2 individuals agreed and 1 disagreed

The respondent types showing most widespread agreement with the proposal in Question 2 were planning authorities, the other membership body and individuals.

The respondent types showing most widespread disagreement with the proposal in Question 2 were electricity generation developers.

5 respondents were unsure or unclear from various group types.

There follows a summary of points raised by respondents, listed in descending order of number of respondents raising each point. The number in brackets next to each indicates the number of respondents making the point in response to this question. It should be noted that some respondents repeated the same point across responses to more than one question.

• the new bandings will capture the amount of work involved for the increasing scale of offshore developments (8)
• the proposed increases appear arbitrary and are not supported by a robust evidence base. Further information is required to explain the magnitude of proposed increases (5)
• given the involvement of planning authorities in offshore projects, planning authorities should receive an adequate proportion of the application fees for offshore projects (5)
• the outcome of the 2019 fees consultation was to not introduce bandings for projects over 300MW on the basis that costs do not significantly increase once a threshold of 300MW is crossed (4)
• larger capacity projects do not necessarily result in larger or more complex applications and environmental considerations that require more resources to review - the level of resources required to assess them are likely to remain similar (4)
• the proposed changes do not reflect a fair cost increase when moving between scale bands, with certain movements between bands being disproportionately high and others being disproportionately low when compared to other differences in bands (3)
• developers will require to pay fees for applications for planning permission (if applied for separately) and for marine licenses in addition to Electricity Act consent fees which increases consenting costs overall (2)
• costs of consenting in England and Wales may be higher, but there is an argument that the "value-for-money" for the applicant is greater in England and Wales, because of the set timescales for determinations and access to experienced staff (2)
• there are currently no statutory periods for determining section 36 applications, resulting in varied and unpredictable timescales. Increased fees should be accompanied by guarantees on determination timescales similar to England and Wales (2)
• agree with the bandings in principle, if the increased fees reduce risk of consenting delays and improve consenting processes (1)
• proposed new bandings are required, particularly in respect of the increased offshore development activity, but may have unintended consequences for other forms of renewable development such as pumped hydro storage which may have less ability to pay the significant increases without adverse impacts to their development prospects (1)
• disagreement with the proposed bandings and fees without improvements to efficiencies and the consenting process (1)
• there should be no penalty for the establishment of renewable power generation (1)
• a separate pricing system should be created for offshore applications as offshore developers are more capable of absorbing the financial consequences of the proposed fee rises (1)
• the additional fees for the higher bandings might add a significant costs to project design and development, but it is assumed that developers working at such a scale would be able to cover the increase (1)

Question 3: Do the proposed application fees set out in this consultation have any financial, regulatory or resource implications for you and/or your business (if applicable)? If so please explain these.

22 respondents answered this "yes/no/don't know" question in their response on whether the proposed application fees have any financial, regulatory or resource implications for the respondent and/or its business. 17 respondents said "yes" (including a respondent who did not state "yes" or "no" but their response indicated in the affirmative), 4 said "no", and 1 said "don't know". One respondent, an individual, did not answer the question. Two further respondents provided general comments on the consultation but did not directly address this question.

• 9 electricity generation developers said "yes", none said "no" and 1 response was unclear or did not directly address this question
• 1 electricity networks company did not respond "yes" or "no" but their response indicated in the affirmative, and 1 said "no"
• the developer organisation said "yes" in terms of implications for its members
• 5 planning authorities/other public bodies said yes, 2 planning authorities said "no" and 1 planning authority said "don't know"
• the other membership body said "yes"
• 1 individual said "yes", 1 said "no" and 1 did not respond

There follows a summary of points raised by respondents, listed in descending order of number of respondents raising each point. The number in brackets next to each indicates the number of respondents making the point in response to this question. It should be noted that some respondents repeated the same point across responses to more than one question.

• the proposed increases have considerable financial implications for developers as they would increase the budget required for projects (9)
• the financial implications for planning authorities in responding to applications are significant – existing staff resources require to be used and also external consultants engaged. There is a lack of resource to respond to the applications which puts pressure on budgets (5)
• the proposed revised fees will not cover planning authority costs, especially where a public inquiry is triggered (4)
• as there is no formal agreement on the fee contribution payable to planning authorities, it is more challenging to resource (2)
• as well as new projects, the proposed increases would have financial impacts on projects requiring variations – such projects have been developed and financed based on the existing fee structure (2)
• whilst fee increases would increase project costs, if there was a quicker consenting timeline, the benefits of that would outweigh the negative impact of increasing the fees (2)
• an impact test on Scottish firms has not been undertaken. The proposed increases will discourage smaller developers from undertaking large developments (1)
• in a market where cost reduction and competition for contracts for difference is critical, adding costs to offshore wind projects at any stage is considered a risk (1)
• the proposed fee increases could impact the company's future operations in Scotland and the development pipeline (1)
• at a time where developers are trying to make savings and attempting to deliver projects on a subsidy-free basis, the proposed fees would be a threat to the number of projects brought forward which will impact on meeting renewable energy targets (1)
• if increased fees are introduced, fees should then remain steady for the foreseeable future for the benefit of consumers and to create certainty for industry (1)
• there would be no direct impact, but we could be indirectly impacted if generating stations are not pursued as a result of these increases by the loss of additional renewable energy being fed into the national grid (1)
• statutory consultees are an integral part of the system and experience resourcing pressures as a result of high volumes of renewable energy applications – statutory consultees are not currently resourced to deal with the forthcoming volume of applications (1)
• the Business and Regulatory Impact Assessment should specifically include statutory consultees as there is a risk to delivery of renewable projects if the staffing numbers in these bodies are not addressed (1)
• there should be a formal agreement for payment of a proportion of application fees to planning authorities to achieve full cost recovery (1)
• given the uncertainty over how fees are to be shared with planning authorities, it is unclear if fees will cover the cost of the resources planning authorities require to input to applications (1)