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 involves safety certification under COMAH. Solar is typically fastest to permit. Battery storage has emerging regulations. Understand your specific requirements before investing in site options.
Offshore wind: Secure seabed rights first
If developing offshore wind, securing a seabed lease from The Crown Estate (or Crown Estate Scotland) is your critical first step. Without seabed rights, you cannot proceed with planning or grid connection. Leasing rounds are competitive with annual option fees and operational rent.
Offshore wind: Apply for Development Consent Order
Offshore wind projects over 100 MW require a Development Consent Order (DCO) from the Secretary of State. The DCO process takes 3-4 years from pre-application to decision and provides all necessary consents including planning, marine licences, and compulsory acquisition powers.
Hydrogen: Understand licensing and safety requirements
Hydrogen production requires multiple licences including Low Carbon Hydrogen Standard certification (for government funding), environmental permits, and COMAH safety compliance if storing 5+ tonnes. Plan 6-12 months for licensing before operation.
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 must register for UK ETS, monitor emissions continuously, and surrender allowances annually. Registration takes 3-6 months and must be completed before operation. Budget for verifier costs (£5,000-£15,000 annually) and allowance purchasing.
Contracts for Difference funding
CfDs provide long-term revenue stability for renewable generators through government-backed strike prices. Allocation Round 7 applications open August 2025 with 20-year contracts for offshore wind, onshore wind, and solar. You must have planning consent and grid connection agreements to be eligible.
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.
Health and safety for energy projects
Renewable energy projects involve significant workplace risks including working at height (wind turbines, solar installations), electrical hazards, confined spaces, and heavy machinery. You need risk assessments, method statements, and CDM compliance for construction. Hydrogen projects face additional explosion and fire risks requiring DSEAR compliance.
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.