As the UK’s transition to net zero gathers pace, there is a growing emphasis on balancing the demand for more renewable sources of energy with wildlife and habitat conservation.
Hornsea Three is a major offshore wind farm that will be crucial in helping the UK meet its targets. Located off the North Norfolk cost, it will generate 2,400MW of electricity – the average daily supply needed to power more than two million homes – and will offset over 128.2 million tonnes of carbon dioxide over its lifetime. Combined with Hornsea One and Two, it will be the world’s largest wind farm.
With approval for the project delayed by a year amid habitat protection concerns, Ørsted, one of the world’s largest renewable energy developers, turned to longstanding adviser Pinsent Masons for help. The firm’s offshore renewables team led by partner Gareth Phillips, alongside legal director Peter Cole and senior associate Claire Brodrick, were tasked with structuring an agreement that will pave the way for future projects.
“As the first offshore wind farm to be approved by the government under the Habitats Regulations, we really were setting new standards in how large scale offshore renewable projects are consented,” explains Brodrick.
“The cumulative environmental impact on protected sites is an issue that has hung over the offshore wind industry for years and as such it threw up some really interesting challenges. We worked with Hornsea Three on tackling these head-on, without the benefit of industry buy-in, and put forward a proposal that would make the project consentable. The solutions and initiatives we implemented for Hornsea Three has led to an industry-wide change of approach to [development consent order (DCO)] applications for offshore wind sites, which made it a really transformative project to have been a part of.”
The Hornsea Three project
Hornsea Three is a Nationally Significant Infrastructure Project (NSIP), meaning it requires development consent from the Secretary of State for Business, Energy & Industrial Strategy (BEIS). Natural England argued that the project would have an adverse effect on protected habitats for Kittiwake birds, which meant that for the first time ever a derogation case under the Habitats Regulations had to be formulated to demonstrate that the project is of enough significance, is in the public’s best interest, and includes effective compensatory measures.
Covering a wide geographical range across five conservation areas within Norfolk and surrounding areas, the team had to develop a new legal structure to satisfy the regulations, and ensure conservation areas were protected and the project could be built. This is no mean feat and numerous previous projects have fallen beneath the required threshold. The success of the project hinged on an innovative and feasible derogation case that would be underpinned by robust legal reasoning.
Working in collaboration with the Secretary of State for BEIS and Ørsted, the Pinsent Masons team developed a solution that incorporated a comprehensive compensation scheme specifically designed to create onshore artificial nesting structures for Kittiwake birds by repurposing decommissioned oil platforms. As the first derogation case of its kind, Phillips and his team had no precedents to rely on, creating an entirely new scheme from scratch.
“Hornsea Three is an industry-defining project for the offshore industry as it addresses environmental impacts relevant to all projects, and where many have previously fallen short. If the derogation case had failed, it would have set a damaging precedent for future large-scale projects and would have prevented the government from achieving its target of 40GW of offshore wind by 2030,” Broderick explains.
“The issues raised, and solutions implemented for Hornsea Three (both onshore and offshore matters) were extremely wide ranging and novel. The experience and knowledge I have gained from working on this deal means I am well placed to advise existing and future clients that are successful in ScotWind and Leasing Round 4 – the two programmes in the UK where developers apply to lease areas of the seabed for wind farm development from the Crown Estate.”
Hornsea Three was the first offshore wind farm to be approved by the government on the basis of a derogation case made under the Habitats Regulations and has transformed the way these types of renewable projects are consented. Looking forward, it will now be necessary for all offshore wind farm projects to include a derogation case under the Habitats Regulation when making an application for consent. Pinsent Masons’ case for Hornsea Three provides a valuable blueprint for that.
Hornsea Three was given the green light by the Secretary of State in December 2020. Since then, the Pinsents team has continued to advise Ørsted on the detailed design and land assembly for the habitat compensation measures. Phillips and his team have provided developers with training and guidance on the NSIP consent regime and Habitats Regulations.
Asked what makes this deal stand out most among all those she has worked on over the past 18 months, Broderick says, “First and foremost, how important it is to have a dedicated and experienced client and consultant team who aren’t afraid to think creatively and find innovative solutions to challenges that the offshore industry has faced for years. Through this project, I have gained a much greater understanding of the difficulties developers, statutory consultees, and the government face in balancing environmental impacts against the urgent need for renewable energy which is essential in helping the UK reach its net zero targets.”
She adds, “Given the timing and scale of the project, we had to propose DCO drafting and solutions that would ensure that habitat compensation measures were adequately secured but were still sufficiently flexible to adapt to evolving research and detailed design.”
About Claire Brodrick
Brodrick joined Pinsents in 2015, having qualified at Fieldfisher in 2008. She has been working flexibly ever since she joined the firm, so the pandemic was less disruptive for her than it may have been for others.
“Pinsent Masons had already transitioned to agile working prior to the first lockdown, there were no limitations on our ability to work from home on this deal. We benefited from having technology and systems in place to enable us to continue to support clients throughout the pandemic. Tools such as Microsoft Teams were invaluable for us on this project and on so many others,” she explains. “It’s clear that the pandemic has had an impact on our attitudes to day-to-day work and has prompted many to recognise and appreciate the value of remote working. It’s been positive to see so many people embrace agile working and gain a fresh perspective on working life.”
Despite Pinsents having already established the infrastructure to enable people to work from home, the associated stresses and strains of the pandemic itself remained challenging. “It’s vital to be flexible and appreciate that everyone’s experiences of the pandemic are different. So many people have been grappling with caring responsibilities while working and it’s important to keep that in mind when advising on projects that may be time consuming and challenging’, she says.
“We all took the time to check in with team members regularly so we can support each other and make sure that no one person is struggling with their workload. The pandemic has encouraged us all to consider our mental health and wellbeing and to communicate with each other more openly. My sense is that this more open dialogue about wellbeing is here to stay and will guide us as we navigate the new world of work post-pandemic.”
Since Hornsea Three, Brodrick has been working on a number of development consent orders for other major infrastructure and energy projects, including Cleve Hill Solar Park – the first solar DCO with battery storage, Hornsea Four Offshore Wind Farm DCO application for Ørsted, which was submitted to the planning inspectorate in September 2021 (including a without prejudice derogation case) and River Thames Flood Defence Scheme for the Environment Agency.
“I have been advising on major infrastructure projects for over 12 years and specialise in securing DCO for nationally significant infrastructure projects. This includes obtaining compulsory acquisition powers and negotiating protective provisions and asset protection agreements with statutory undertakers and private utilities,” she says.
“I particularly enjoyed working on the North Wales Wind Farm Connection DCO for SP Manweb – which involved a new 132kV overhead line to connect two onshore wind farms to the existing electricity network. It was an interesting project to work on as not only did it require promoting the DCO, but it also included successfully appealing a refusal of planning permission for an associated substation and defending the judicial review of the DCO.”
About Claire Brodrick
2017-present: Senior associate, Pinsent Masons
2015-17: Associate, Pinsent Masons
2006-15: Associate, Fieldfisher
Who’s Who: the Pinsent Masons team
Leading: Partner Gareth Phillips with legal director Peter Cole