Banks Renewables is behind judicial review proceedings against the ongoing third allocation round of the UK’s Contracts for Difference price support regime.
The Durham developer has confirmed it has filed a legal challenge against UK Energy Department BEIS Secretary Andrea Leadsom with the Administrative Court at the Royal Courts of Justice in London.
Banks said it is challenging the legality of the basis on which the UK government operates its main mechanism for supporting low-carbon electricity generation.
The company believes the exclusion of consented onshore wind farms from the CfD process is “against the public interest, prevents consumers from benefiting from the lower energy prices that would result from their inclusion and, from a legal perspective, does not comply with either EU or UK law”.
Banks has three operational onshore wind farms backed by CfDs won in the first auction in 2015: the 88.4MW Kype Muir and 51MW Middle Muir in South Lanarkshire, and the 12MW Moor House in Darlington.
Onshore wind was barred from participating in CfD auctions in the second and third allocation rounds.
Banks said it has two consented but unbuilt onshore projects in Scotland with a combined capacity of 150MW, “which were not permitted to compete in the recent Round 3 CfD auctions”.
Banks Renewables managing director Richard Dunkley said the legal challenge is a last resort.
“We hope it will be resolved as quickly as possible, but we firmly believe that changes are required to ensure the UK government complies with its legal obligations and to end the needless prejudice within the CfD process against the most cost-effective and popular form of renewable energy generation,” he said.
Onshore wind’s exclusion “flies in the face” of UK government principles in the Clean Growth Strategy to meet domestic energy needs at lowest cost and maximise benefits for the nation, he added.
“UK Government policy is expressly to make CfD support available to offshore wind but not to onshore wind, a position which it presently intends should endure. This policy will in particular frustrate the Scottish Government’s drive towards encouraging the further development of onshore wind projects within Scotland.”
The legal challenge led BEIS and CfD partners the National Grid Electricity Market Reform Delivery Body and Low Carbon Contracts Company to extend the current sealed bid process by two weeks to 29 August.
The earliest date for publication of the auction results is currently 19-20 September.
However, Banks’ hearing will not be listed until it is given a date by a judge. Legal sources said the hearing date may not be until early October at the earliest due to the summer court vacation that finishes on 1 October.
Either side could expedite the legal process, the sources added. If a judge grants permission for the review it will likely take months before a full hearing.
A BEIS spokesman confirmed legal action is underway. “We run the scheme lawfully and will be contesting this claim,” he said.
The spokesman declined to comment on the specifics of the case, citing “ongoing court proceedings”.
At least 9GW of consented offshore wind projects are eligible to bid in CfD3, including SSE Renewables’ 1.5GW Seagreen off Scotland and Innogy’s 1.4GW Sofia in the Dogger Bank area off east England.
These projects will compete with around 1GW of remote island wind farms off Scotland.