Why keeping the lights on demands robust legal framework

Comment Colin Hamilton

Modern life depends on reliable electricity supplies. But as the balance between supply and demand gets increasingly complicated to juggle significant investment is required to secure that reliability in the future.

Even with the continued development of renewable energy, we cannot be certain that renewables will generate energy when it is needed most. What’s more, renewable energy sources tend to be located far away from where demand is greatest in our cities.

Building storage capacity together with smart use of transmission and distribution systems are therefore now a priority for both Scottish and UK governments. Westminster’s Modern Industrial Strategy puts energy efficiency and storage at its heart, seeing new technological development key to the country’s ambitions in global markets. Holyrood, meanwhile, is looking at large-scale energy storage, including pumped hydro storage, as part of its energy strategy.

But while the ambition cannot be faulted, the questions from a legal perspective are mounting. Currently, on-shore wind is recognised as one of the most developed renewable energy technologies available; but it is limited to producing power when the wind is blowing. This means that power generated by wind cannot currently be managed in order to match peak demand on the grid.

As a solicitor working in the energy sector, the matters that need to be addressed include: should storage be co-located with production or located close to demand? What about revenues when storage is not called upon? What are the environmental consequences of storage facilities?

If there is to be on-site storage of renewable energy at generation sites, to be delivered to the grid in accordance with demand, developers should be taking account of future possible storage infrastructure and site layout. This too needs a legal basis to ensure the appropriate rights can be included whatever the future holds.

The development of new energy technology is moving forward at pace. It’s needed. But, crucially, we need to have full and rounded discussions about the impacts of its implementation. Ultimately, for this to happen we need to ensure a robust legal foundation. l Colin Hamilton is an associate in the energy team at Gillespie Macandrew LLP