Renewable energy generation businesses face a complex regulatory landscape involving multiple agencies, long licensing timelines, and substantial upfront investment. This journey guides you through the sector-specific licences, permits, and consents you'll need, in the right sequence.
This journey covers solar, wind (onshore and offshore), hydrogen production, and battery storage. The specific licences you need depend on your technology choice and project scale.
Choose your business structure
Renewable energy projects typically operate as limited companies due to liability protection, investor requirements, and access to capital. Consider your structure before applying for licences.
Technology-specific licensing
Your licensing pathway depends on your chosen technology. Offshore wind requires seabed leases and Development Consent Orders. Hydrogen needs an environmental permit and safety controls, which include COMAH once you hold 5 tonnes or more. Solar is typically fastest to permit. Battery storage has emerging regulations. Understand your specific requirements before investing in site options.
Offshore wind: Apply for Development Consent Order
Offshore wind projects over 100 MW in English waters require a Development Consent Order (DCO) from the Secretary of State. The DCO is the planning consent and can include a deemed marine licence. It does not give you seabed rights from the Crown Estate or a grid connection, which you secure separately.
Hydrogen: Understand licensing and safety requirements
Hydrogen production needs planning permission and an environmental permit, and you must meet the Low Carbon Hydrogen Standard to get government support. COMAH safety duties apply if you store 5 tonnes or more.
Connect to the electricity grid
All electricity generators must secure a grid connection agreement before exporting power. Projects under 50 MW connect via local DNOs (faster, lower cost). Projects over 50 MW connect via National Grid transmission (longer timelines, milestone requirements). Grid connection can be the critical path for your project.
UK Emissions Trading Scheme compliance
If your installation has combustion units exceeding 20 MW total rated thermal input, you need a UK ETS permit and registry account, must monitor emissions all year, and must surrender allowances each year. Apply for the permit at least 2 months before you start the activity. Budget for an accredited verifier and for buying allowances.
Contracts for Difference funding
CfDs provide long-term revenue stability for renewable generators through government-backed strike prices. Projects in Great Britain apply in an annual allocation round run by the National Energy System Operator. In Allocation Round 8, contracts run for 20 years for offshore wind, onshore wind and solar. You must give copies of your planning consents and a grid connection agreement to apply.
Electricity generation licence
Generators over 50 MW require a Generation Licence from Ofgem unless they qualify for a class exemption. Most small-scale renewable generators (under 50 MW) automatically qualify for exemptions. Check eligibility before applying - licences take 3-6 months and cost approximately £1,500.
Your duties as an employer under health and safety law
Every employer in Great Britain must ensure, so far as is reasonably practicable, the health, safety and welfare at work of its employees, and must not put other people at risk.
Register for business taxes
Register for Corporation Tax if you're a limited company. You may also need to register for VAT if your turnover exceeds £90,000. Renewable energy equipment may qualify for enhanced capital allowances, reducing your tax bill.
Hire employees and contractors
Renewable energy projects require specialist skills including electrical engineers, project managers, construction workers, and operations staff. If employing people, register as an employer with HMRC and set up PAYE. Many businesses use contractors initially - understand IR35 rules for off-payroll working.
After licensing
Once licensed, you'll proceed to financial close, EPC contracting, construction, and commissioning. Maintain strong relationships with regulators throughout - environmental permits, UK ETS, and safety regulations require ongoing compliance.