The Renewable Energy Law Review: United Kingdom

Introduction

In June 2019, the United Kingdom became the first major economy in the world to enshrine in law a target to bring all greenhouse gas (GHG) emissions to net zero by 2050 to deliver on its commitments under the 2016 Paris Agreement to keep global warming well below 2°C. According to the Department for Business, Energy and Industrial Strategy (BEIS), as of 2019 energy supply accounted for 21 per cent of the UK's GHG emissions, but also delivered the largest reduction in emissions at 8 per cent when compared to 2018 figures.

Over the last decade, the amount of renewable capacity connected to the grid soared from 8GW in 2009 to 48GW as of June 2020, equivalent to a 500 per cent increase. More significantly, for the first time in 2020, renewable energy comprised more of the UK's annual electricity generation than fossil fuels, with almost a quarter of the UK's electricity generated by wind power alone.

Looking ahead, in 2020 the government announced plans to secure 40GW of offshore wind capacity by 2030 – enough to power every home in the UK based on current electricity usage. In addition, the significant decline in onshore technology costs continues to boost the deployment of such technologies in the UK. Onshore wind and solar are now cheaper than traditional electricity sources as a result of falling capital costs, improvements in technology and increased competition in the market.

The regulatory framework underpinning the UK's clean energy shift is implemented largely by the Energy Act 2013 which, pursuant to the electricity market reform programme (EMR), aimed to transform the UK's electricity system to ensure energy supply is secure, low-carbon and affordable. Key mechanisms delivered under EMR included a contracts for difference (CfD) scheme to provide long-term revenue stabilisation for low-carbon generation projects. The CfD scheme is the primary support scheme available to support new renewable energy projects in the UK.

The year in review

Energy consumption in 2020/2021 hit significant lows as a result of covid-19 restrictions on economic output, travel and leisure. However, renewable electricity was largely unaffected by the restrictions partly because of the fact that with lower operating costs, wind and solar farms are cheaper to operate and require fewer operating staff when compared with traditional fossil fuel generation. Overall, while renewable technologies accounted for 42.9 per cent of total generation in 2020, renewable capacity growth slowed in mid-2019, with this trend continuing through 2020 with less than 1GW of new capacity added during the year (equivalent to 2 per cent and the lowest percentage increase seen since 2010).

A key focus for the UK government as a result of the covid-19 pandemic has been to 'build back better' and deliver economic recovery in a way that is more resilient to systemic threats such as pandemics and climate change. In November 2020, BEIS unveiled its 'Ten Point Plan for a Green Industrial Revolution', mapping the UK government's road to a green economic recovery. The Ten Point Plan aims to position the UK 'at the forefront of global markets for clean technology' and commits to the mobilisation of £12 billion in public funds and the creation of up to 250,000 'green jobs' by 2030. Key points from the Ten Point Plan, as applicable to the low-carbon energy industry, include:

  1. securing 40GW of offshore wind capacity by 2030 (the UK currently has an installed capacity of around 10GW), achieved primarily through the CfD scheme;
  2. achieving 5GW of low-carbon hydrogen production capacity by 2030, with £500 million set aside to support this; and
  3. accelerating the development of industrial clusters to scale up carbon capture, utilisation and storage (CCUS) projects.

In May 2021, BEIS announced that the fourth allocation round for the CfD scheme (AR4) will open to applications in December this year. While the date of when the CfDs are to be awarded is not fixed, based on previous allocation processes we can expect award of the AR4 CfD contracts to occur around April/May 2022. In addition, the years in which the successful projects must commission have also not yet been confirmed but would need to follow the delivery year of the third allocation round, being 2025.

AR4 aims to double the capacity of renewable generation from 5.8GW achieved in the last allocation round to up to 12GW and expand the number of technologies supported.

Most notably, following consultation in March 2020, BEIS confirmed that established technologies, such as onshore wind and solar PV will be able to compete for support in AR4 after withdrawing CfD support for both technologies in 2015. In addition, BEIS reintroduced for AR4 'pot 3' which will be dedicated to fixed-bottom offshore wind projects only, therefore defined as distinct from floating offshore wind projects, which are covered in 'pot 2'. The key result of this is that projects within this new definition of floating offshore wind will compete with other less-established technologies, but not with conventional fixed bottom offshore wind, in pot 2 and have an administrative strike price specific to floating offshore wind. It is evident that these changes are a product of the UK government's targets to achieve 1GW of floating offshore wind and 40GW of fixed-bottom offshore wind by 2030. While budgets for each 'pot' will be set closer to the opening of AR4, BEIS have confirmed that the pot structure will be as follows:

Pot 1
Established technologiesOnshore wind (>5MW)
Solar photovoltaic (>5MW)
Energy from waste with Combined Heat and Power (CHP)
Hydro (>5MW and <50MW)
Landfill gas
Sewage gas
Pot 2
Less established technologiesAdvanced conversion technologies
Anaerobic digestion (>5MW)
Dedicated biomass with CHP
Floating offshore wind
Geothermal
Remote island wind (>5MW)
Tidal stream
Wave
Pot 3
Offshore windOffshore wind

Other notable updates for AR4 include:

  1. the extension of the negative pricing rule to ensure difference payments are not made to generators when the intermittent market reference price (based on the day-ahead price) is negative (currently generators still receive difference payments when there are less than six consecutive hours of negative pricing, this period will be shortened);
  2. the extension of the milestone delivery date from 12 months to 18 months post-contract signature to accommodate larger projects being procured under the CfD scheme and the related challenges of raising project finance or taking final investment decision within this period; and
  3. strengthening supply chain plan policy.

BEIS has also confirmed that the current final legislative delivery year of 2030 will be extended to 2035, to enable the CfD scheme to run beyond 2026.

The UK renewable energy market continues to attract both domestic and foreign investment, reporting the largest investment of any country in Europe at £11.2 billion in 2020. Significant transactions in the UK renewables market over the course of the last year include Total's acquisition of a 51 per cent stake in the Seagreen 1 offshore wind project, the sale of SSE's 25.1 per cent non-operating stake in Walney offshore wind farm to Greencoat, Eni's acquisition of a 10 per cent stake in Dogger Bank A and Dogger Bank B offshore wind farm from Equinor and Greencoat's acquisition of the Scotland-based South Kyle wind farm from Vattenfall AB.

The rise of the environmental, social and governance agenda has been a significant driver in the pivot to renewable energy investment, particularly for institutional investors and debt funders, as there is a clear political, regulatory and market push to move towards sustainable and low-carbon investments. The impact of upcoming sustainable finance legislation in the UK will cement this position and present potential new exposure for renewable energy projects. The impact of these measures will require certain financial institutions to further integrate sustainability risks into their investment strategies, while also combatting 'greenwashing' by disclosing detailed sustainability metrics. Similarly, renewable energy businesses will not be immune from the indirect reporting disclosures that will be placed on them by financial institutions looking to meet their own increased disclosure obligations.

2020/2021 has also seen the transition by oil and gas majors to renewable energy investment continue at significant pace as these players look to expand their current energy mix and contribute towards lower emissions. There are many complexities driving oil and gas majors to rethink their strategies and expand their energy mix – in the main, this shift seeks to respond to, and leverage opportunities presented by, oil price volatility, increased interest in sustainable investment, US climate change policy and falling costs of renewable energy technology. Moreover, the oil and gas industry recognises the value it can deliver to enable capital-intensive technologies such as offshore wind and green hydrogen to reach maturity. The results of the Crown Estate's Offshore Wind Leasing Round 4 were published in February 2021, with consortia led by BP and Total securing more than half of the available 8GW of offshore wind site leases up for auction, signalling both a vote of confidence in the UK offshore wind market and the investment appetite of these players in the market.

The policy and regulatory framework

i Current government policy

While the UK makes up less than 1 per cent of global GHG emissions, the government has made clear its intention to position the UK as a world leader in the low-carbon transition and, in particular, the renewable energy sector. In the run-up to the 26th UN Climate Change Conference of the Parties (COP26) scheduled to be held in Glasgow in November 2021, the UK government has implemented a swathe of policies to shape its path to net zero, decarbonise its energy system and most importantly, set an example for other governments to follow.

Most notably, the much-anticipated Energy White Paper was published by BEIS on 14 December 2020 and sets out the government's strategy for the UK's energy transition over the next decade. The Energy White Paper reiterates the government's commitment to deploy 40GW of offshore wind by 2030, including 1GW of floating offshore wind, alongside the expansion of other low-cost renewable technologies such as onshore wind and solar. Other key policies issued by the government such as the Industrial Decarbonisation Strategy affirm the role of renewable energy in transitioning to a low carbon economy, and further strategy updates earmarked for 2021 and 2022 include a Heat and Buildings Strategy as well as new strategies for hydrogen and biomass.

ii The regulatory and consenting framework

The regulatory and consenting framework applicable to the UK renewable energy industry is comprehensive, with the main sources of regulation deriving from both primary legislation (such as the Gas Act 1986, Electricity Act 1989, Utilities Act 2000 and Energy Acts of 2004, 2008, 2010, 2011 and 2013) and secondary legislation (for example, the Electricity and Gas (Market Integrity and Transparency) (Enforcement etc.) Regulations 2013). In addition, market participants must comply with certain industry codes as relevant to their business activities, such as the Grid Code, Balancing and Settlement Code and Connection Use of System Code.

BEIS is the ministerial department charged with overall responsibility for implementing strategy, policy and legislation in respect of the UK energy sector (the Department for Economy is the equivalent department in Northern Ireland). BEIS works closely with other agencies and public bodies such as the Gas and Electricity Markets Authority (GEMA) and the Office of Gas and Electricity Markets (Ofgem).

Ofgem carries out the functions of GEMA, which was established under the Utilities Act 2000 as the independent regulator for the power and downstream gas industries in Great Britain. 'Ofgem' and 'GEMA' are often used interchangeably, although strictly speaking GEMA is the formal entity granted statutory functions and powers. Ofgem's 'principal objective' is to protect the interests of consumers of gas and electricity, present and future. Ofgem's wider duties are set out in the Gas Act 1986, the Electricity Act 1989 and Utilities Act 2000. This statutory framework also sets out Ofgem's powers to grant, revoke and enforce licences and impose enforcement orders and financial penalties.

Local planning authorities are responsible for consenting (and overseeing compliance with conditions) in respect of renewable energy projects with a total installed capacity of 50MW or less pursuant to the Town and Country Planning Act 1990. Following recent legislative change, energy storage projects of any capacity will be approved by local planning authorities.

Where a project (other than an energy storage project) has a total installed capacity of over 50MW (or 100MW for offshore projects), such projects are considered (in respect of England and Wales only) nationally significant infrastructure projects (NSIPs) and require a development consent order (DCO) under the Planning Act 2008. The Secretary of State is responsible for approving such projects. Prior to the introduction of the DCO regime, projects over 50W applied for consent under Section 36 of the Electricity Act 1989. While the need for a Section 36 consent is now largely reduced, Section 36 consents will be required for renewable energy projects located in Scotland and offshore wind projects between 1MW and 100MW of capacity located in England and Wales. In addition, offshore wind and interconnector projects will require marine licences under the Marine and Coastal Access Act 2009, granted by the Marine Management Organisation.

The protection of the environment, wildlife and promoting sustainable development is the responsibility of the Environment Agency. The Environment Agency's role regarding electricity is limited to matters related to pollution.

iii Support schemes

The principal support scheme available for new renewable energy projects is the competitive CfD scheme. Generators that meet certain eligibility requirements can apply for a CfD contract by submitting a sealed bid. Successful generators will then enter into the private law CfD contract with the Low Carbon Contracts Company Ltd (LCCC), a wholly owned government company. Under a CfD contract, a generator is paid the difference between a 'strike price' (i.e., a price for electricity that reflects the cost of investing in a certain low carbon technology) and the 'reference price' (which is the average market price for electricity in the UK wholesale market) over a 15-year period. To date, CfD contracts have been awarded to around 16GW of new renewable energy capacity, including 13GW of offshore wind. Strike prices secured in the last CfD auctions continue to decline, meaning new renewable generation capacity will be expected to come online below market prices and without additional subsidy on consumer bills. In the last CfD allocation round (AR3), strike prices ranged from £39.65/MWh to £41.61/MWh, reflecting a near 30 per cent reduction compared to strike prices secured in AR2.

Under the capacity market, capacity providers are paid monthly availability payments over a contracted period in return for agreeing to provide electricity (or reduce electricity demand in the case of demand side response providers) during system stress events. The maximum length of capacity agreement available is generally 15 delivery years with a minimum period of one delivery year. The T-1 auction for delivery from 1 October 2021 cleared at a record high of £45 per kW per year, significantly higher than the 2020/2021 T-1 auction, which cleared at a much lower £1 per kW per year. In addition, the T-4 auction for delivery from 1 October 2024 cleared at £18 per kW per year marginally higher than the 2023/2024 T-4 auction, which cleared at £15.97 per kW per year.

The T-1 and T-4 capacity market auctions held in March 2021 were the first in which onshore wind and solar projects could participate. However, because of the intermittent nature of these technologies, they carry a high derating factor (which represents a technology's capability to contribute to system stress events) of around 8 per cent and 2.5 per cent, which in turn impacts clearing prices and can make the capacity market unattractive in comparison to the CfD scheme.

Other support schemes such as the Renewables Obligation (RO) scheme and the Feed-in-Tariff (FiT) scheme closed to new capacity in March 2017 and April 2019, respectively. Now, small-scale generation is supported through a smart export guarantee regime, which requires electricity suppliers of a certain size to offer to enter into contracts with owners of small, low-carbon electricity generation installations. Support is also available for the use of certain renewable technologies in heating through the domestic and non-domestic renewable heat incentive schemes.

iv Other emerging low-carbon technologies

With an extensive gas network and industrial sector in the UK, decarbonisation of heating and industry will be instrumental in achieving the UK's net zero goals. As such, hydrogen blending projects are being piloted across the UK, such as Cadent's HyDeploy project, which is the UK's first live pilot to inject zero carbon hydrogen into a gas network to heat homes. The government has also demonstrated its dedication to decarbonise industry through its Low Carbon Hydrogen Supply Competition, under which funding was awarded to HyNet North West to be part of the UK's first net zero industrial zone using carbon capture and storage technology.

In addition, the UK has seen rapid growth in the energy storage sector, driven by significant advancements in technology, construction and maintenance, and supported by developments in risk mitigation standards and insurance, sophisticated longer-term manufacturer warranties and availability of new revenue streams. The recently in force Infrastructure Planning (Electricity Storage Facilities) Order 2020 facilitates the construction of more battery storage sites with higher capacities in England and Wales as a result of the removal of electricity storage sites (>50MW) from the NSIP regime, meaning that such projects will no longer need to apply for a DCO.

Renewable energy project development

i Project finance transaction structures

The financing structure for any renewable energy project will be subject to a number of variables, such as the type of technology, stage in development or operation, revenue stream and nature of the client. In the UK, project finance is a common source of funding for the development, construction and operation of renewable energy projects. In November 2020 the UK ranked fifth in EY's Renewable Energy Country Attractiveness Index, and in the same month, the Dogger Bank offshore wind farm (located off the north-east coast of England) announced financial close on a £5.5 billion financing deal, understood to be the largest offshore wind project financing to date globally.

As a form of non-recourse or limited recourse private debt, project finance is attractive to developers as they do not necessarily need significant balance sheets to secure funding. Third-party lenders, such as large commercial banks, make debt available in exchange for a secured financing package, with repayments based on the projected revenue to be generated by the completed power project. The lender will therefore require assurance that the project has a steady revenue stream and is capable of delivering regular payments (whether through subsidies, an offtaker or both). In consideration of these risks, and to achieve a level of certainty and comfort for the lender, extensive legal and technical due diligence and financial modelling takes place. As a result, project financing can be a complex, expensive and lengthy process.

To facilitate these financing packages, all of the project assets are typically held in a special purpose vehicle (SPV), which will typically enter into the project contracts, and own the assets and rights required to construct and operate the project, over both of which the lender will take security. This basic structure is often developed further, depending on the requirements of the funding arrangement. For example, to facilitate lenders taking security over a tranche of projects, multiple holding companies may be established. As for the security package, a debenture will often be used to take security over the project company's assets, including any leases, equipment and all relevant project agreements and insurances. Security may also be granted by a holding company over the project company's shares. Furthermore, to enable the lender to take control and 'step-in' to perform the obligations and assume the rights of the project company, a number of direct agreements between the lender, project company and counterparty of any material project agreement may be entered into. In adverse circumstances (i.e., upon the project company's default), these direct agreements will enable the project to continue and preserve cash flow until an appropriate solution is reached.

As technology costs and the availability (and value) of subsidies fall in the UK, developers and sponsors will need to get lenders comfortable on the long-term viability of fully merchant projects and exposure to market risks. A key bankability concern for any debt funder will be whether the project can generate a predictable and stable income stream to reduce market price volatility risk. Alternative routes to market such as fixed price or floor price power purchase agreements (PPAs) can provide a secure income stream and are generating interest as a bankable alternative for projects without and with subsidy support, though lenders will need to be satisfied of the credentials of any offtaker and the length and terms of the PPA.

ii Power purchase

According to RE-Source, across Europe corporations bought a record amount of clean energy through corporate power purchase agreements (CPPAs) in 2020. Around 4GW of renewable energy CPPAs were signed by 33 different buyers (including 27 corporations that had signed CPPAs for the first time). The ICT sector accounted for 34 per cent of this capacity, heavy industry 30 per cent, transport 8 per cent, and consumer goods 5 per cent. The UK has an established power purchase market and with rising wholesale prices, deal activity continues to grow: as of Q4 2020, it was reported that the UK was the fourth most active PPA market in Europe.

The global trend of tech companies leading the charge for procurement of clean energy is mirrored in the UK. For example, to power its data centres, warehouses and offices, Amazon entered into a PPA with the developer of the 129MW Kennoxhead wind farm located in Lanarkshire, Scotland, reported to be Amazon's largest single site CPPA in the UK. Other major players in the UK's corporate PPA market include: M&S, Unilever, Sainsbury's, McDonalds, Nestlé, HSBC and Mars, many of whom are members of the RE 100 initiative, whereby members commit to meet all or a portion of their energy usage from renewable energy.

While each corporate PPA will take a bespoke form and vary in length, there are three general PPA structures that are most common in the UK: (1) private wire; (2) sleeved; and (3) synthetic.

Private wire PPAs enable a generator that is physically close to the end user to avoid using the distribution and transmission network and directly provide energy in compliance with licensing exemption rules. A sleeved PPA arrangement provides energy from a generator to an offtaker through a back-to-back agreement with an intermediary (for example, an electricity supplier), who can also provide a balancing and 'top-up' service for the offtaker. With synthetic PPAs, there is no physical provision of energy between the counterparties; the PPA is in place to provide price security by means of a financial derivative, with the seller buying and selling on the wholesale market against an agreed strike price in the PPA. While sleeved PPAs have traditionally covered the most renewable energy capacity procured to date in the UK, synthetic PPA structures are becoming increasingly common in the European market having been popularised in the United States.

As well as securing price certainty, environmental attributes are key trading incentives under CPPAs, enabling the purchaser to evidence the 'greenness' of the power it has procured. In the UK, the most common environmental attributes sold and purchased under PPAs are Renewable Energy Guarantees of Origin (REGOs). The REGO scheme issues certificates to generators per megawatt hour of eligible renewable output, providing transparency and proof to customers that a given proportion of energy is generated from renewable sources. As corporates are increasingly keen to demonstrate their green credentials, environmental attributes can be very important to the corporate and are sometimes priced separately under PPAs (or alternatively with no separate value ascribed).

Distributed and residential renewable energy

The UK energy system has for many years been evolving to accommodate greater penetration of distributed electricity generation. As smaller industrial/commercial and domestic customers take advantage of support schemes for smaller scale generation (particularly the FiT scheme, which has now closed) and are motivated by other commercial drivers set out below, on-site, behind-the-meter renewable energy capacity has risen significantly across the UK. In 2019, 7.4 per cent of electricity supplied in the UK was attributed to on-site electricity generation, representing a 2.3 per cent increase over the previous five years.

Solar, onshore wind and fuelled low-carbon generation (such as biomass/waste CHP) are common technologies for behind-the-meter generation and where guaranteed supply is the overriding objective for the consumer, battery storage (co-located or stand-alone) may also be utilised. In the UK, it is common for on-site generation/storage facilities to be owned and operated by a third party rather than directly by the consumer, allowing the commercial, regulatory and technical risks associated with the on-site generation to be to some extent outsourced to specialist organisations.

The drivers and incentives for the use of on-site generation will ultimately depend on the consumer; however, typically such on-site generation consumers are motivated by:

  1. the commercial benefits of on-site generation (such as selling surplus electricity to the grid, less exposure to price volatility and avoiding network charges (though see further detail below));
  2. the ability to demonstrate 'green' electricity consumption; and
  3. increased resilience of electricity supply during periods of system outages.

In addition, other opportunities continue to emerge for on-site generators such as markets for flexibility services and products, in which distribution network operators will procure capacity from distributed energy resources in their respective territory to balance the system and provide signals to stakeholders on which generation and consumption behaviours are most beneficial to networks.

Despite the benefits and opportunities presented by on-site generation, practical and regulatory challenges remain. For example, on-site generators, unless exempt, will need to hold an electricity generation licence and there are various costs associated with this. If the generator seeks to rely on an exemption, careful analysis of the structure and the relevant wording in the exemptions regime needs to be undertaken so that the relevant organisations can satisfy themselves that an exemption applies. In addition, the avoidance of network charges in respect of on-site generation tends to be an incentive for the use of on-site generation, making it important that electricity that is generated and consumed on-site does not pass through a licensed supplier and is not metered as passing on to the licensed network. However, the regulatory position in the UK is changing to reduce the extent to which network charges are avoided through on-site generation and to reduce the 'embedded benefits' associated with electricity exported directly to the distribution network. On 21 November 2019, Ofgem published its final decision on its Targeted Charging Review (TCR) confirming, among other changes, that Balancing Services Use of System charges (known as BSUoS) will be recovered on a gross consumption basis, not a net consumption basis. This removes this embedded benefit for small distributed generators as previously they could receive payments from suppliers for helping them to reduce their liability for BSUoS.

Moreover, subsidies available for new small and medium-scale renewable generation in the UK have significantly diminished, which can render the income streams of on-site generation facilities more complicated. However, generally the absence of subsidies in the wider renewable energy market has also had a positive effect on the market for long-term PPAs, with corporates with bankable covenant strengths presenting other routes to market for smaller generators.

Renewable energy supply chains

Particularly because of Brexit and the government's plans to rebuild the UK economy in the light of the covid-19 pandemic, the development of local supply chains and domestic jobs to support the growth of the UK's renewable energy industry is high up the political agenda. In the 2019 Offshore Wind Sector Deal report, the government committed to a target of achieving total lifetime UK content of 60 per cent for offshore wind projects commissioning from 2030 onwards, including increasing levels of UK content in the capital expenditure phase. Moreover, offshore wind sector stakeholders have aimed to increase UK offshore wind exports fivefold to £2.6 billion per year by 2030. To achieve these ambitious targets, the Offshore Wind Growth Partnership (OWGP), supported by £250 million of funding by the Offshore Wind Industry Council, was established to promote closer collaboration across the UK supply chain through a combination of strategic capability assessments, advisory services and grant funding. To date, OWGP have allocated over £18 million of funding to projects to develop the UK's offshore wind supply chain and increase competitiveness. Further government support for the offshore wind manufacturing sector is made available through the Offshore Wind Manufacturing Investment Support Scheme. New guidance published in February 2021 confirms that BEIS may provide grant funding for major investments in the manufacture of strategically important offshore wind components including, but not limited to, blades, towers, export and array cables and monopile foundations.

The importance of localisation and supply chains in the development of UK renewable energy projects is also highlighted by recent changes made to supply chain plan requirements under the CfD scheme for AR4. BEIS has strengthened the compliance mechanisms in relation to supply chain plans under the CfD contract by introducing a new condition precedent relating to supply chain plan implementation under the CfD contract, such that where a generator fails to satisfy its supply chain plan by the longstop date (all CfD technologies have a longstop period of 12 months, except for offshore wind which has 24 months, running from the end of the target commissioning window and the specified longstop date), this would give rise to a potential termination right for the LCCC. BEIS is further considering its approach to ongoing supply chain plan monitoring and will be publishing more detailed guidance on final supply chain plan process and monitoring later in 2021.

Conclusions and outlook

Against a backdrop of government ambitions to 'build back better' and mitigate the impacts of climate change, as well as falling costs and rising innovation, the pace of the renewable energy transition is gaining significant momentum in the UK. In the Energy White Paper, the government reported that 'our success will rest on a decisive shift away from fossil fuels to using clean energy for heat and industry processes as much as for electricity generation'. These commitments will require billions of pounds of investment in clean energy infrastructure and technologies as well as the right policy levers and market frameworks to effectively deliver the energy transition to net zero.

With the successful outcome of the Crown Estate's Offshore Wind Leasing Round 4 and the upcoming ScotWind Leasing round and CfD AR4, the UK has a strong pipeline of renewable energy projects signalling exciting opportunities for investors and the wider market.

Looking ahead, offshore wind power is expected to play a central role in the UK's generation mix, supported by onshore renewable and storage technologies, as well as low-carbon baseload generation such as CCUS-enabled existing and new-build gas and nuclear projects.

Footnotes

1 Louise Dalton is a partner and Sabrina Polito is an associate at CMS Cameron McKenna Nabarro Olswang LLP.

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