Offshore wind energy - draft updated Sectoral Marine Plan: partial business and regulatory impact assessment

Section 3: Costs, impacts and benefits

Throughout the process of updating the SMP-OWE, various positive and negative impacts have been identified that will affect regulatory bodies and processes they undertake post-adoption. However, whether impacts are positive or negative (or will exist at all) remains uncertain at this time due to the dependencies on decisions yet to be made at this stage of updating the SMP-OWE. Therefore, for these reasons, many of the positive impacts were pre-empted based on comparisons made against the SMP-OWE 2020.

Benefits of updating the SMP-OWE on regulatory processes

Following the CES leasing rounds, a key benefit with updating the SMP-OWE will be the assessment of impacts of the higher GW levels of development leased in the ScotWind leasing round, as well as assessing impacts of INTOG development and consideration of test and demonstration sites within the updated Plan. This will provide a single strategic spatial framework which will set out the opportunities and constraints of offshore wind development in Scottish waters. This will provide a planning framework to support marine licensing and s.36 consenting decisions made by Scottish Ministers on projects. Updating the SMP-OWE will also incorporate new information and evidence. The SMP-OWE 2020 was useful in ensuring applications submitted to MD-LOT included consideration of the relevant information covered under the Plan, such as all the key considerations outlined in each option area.

If the updated SMP-OWE is required to go through a plan-level derogations process under the Habitats Regulations, it can only be adopted if all necessary compensatory measures have been secured. By undergoing this process, the updated SMP-OWE would provide important information and evidence to support consideration of the HRA and derogations process for individual projects (if required) and could create opportunities for streamlining those processes. For completeness, reform to the Habitats Regulations is currently being progressed by the UK and Scottish Governments under Part 13 Chapter 1 of the Energy Act 2023 – the outcomes of this work would be considered as part of the plan-level derogations process as necessary.

The updated SMP-OWE may also benefit future applicants by steering their locations for development towards mapped areas within the updated Plan. This would ensure any decisions made by Scottish Ministers could consider all the updated information and evidence included in the updated SMP-OWE, as well as the impacts assessed within mapped areas. By assessing the opportunities and constraints in each region at the Plan level, Scottish Ministers can utilise this information when making marine licensing and s.36 consenting decisions for projects. The updated information and evidence within the updated SMP-OWE would also encourage developers to consider impacts on other marine users and on the environment, and could positively affect the quality of applications submitted. However, having specific areas outlined within the updated SMP-OWE does not prevent developers from submitting applications that are out with those mapped within this or the existing SMP-OWE, which must then be considered through the licensing and consenting process. Scottish Ministers have a wide discretion in the exercise of their decision-making powers, and it remains open to them to depart from the SMP-OWE where the facts and circumstances of the case justify this. The SMP-OWE cannot be used as the sole basis for rejecting, pausing or granting applications either, and it is just one material consideration that exists alongside all others in licensing and consenting decisions.

Costs of updating the SMP-OWE on regulatory processes

Applications can be submitted prior to the adoption of the updated SMP-OWE. Any inconsistencies between decisions made prior to and after adoption, for instance as a result of the availability of updated information and evidence within the updated Plan may affect Scottish Minister’s marine licensing and s.36 consenting decisions. Applications can be submitted prior to adoption, however, if results from impact assessments at a project-level are different to those at the plan-level, this could mean projects which applied for and were granted consents ahead of the updated SMP-OWE being adopted, could be subject to further considerations when future decisions are to be made.

If the updated SMP-OWE is required to undergo the HRA derogations process, MD-LOT could consider the conclusions from the plan-level derogations case, including any plan level compensatory measures, when making licensing and consenting decisions. Where required by statute, individual projects should undergo a HRA, regardless of whether the updated SMP-OWE has undergone this process at the plan level. Where likely significant effects on any European terrestrial site(s) or European marine site(s) cannot be excluded, the competent authority will be required to undertake a project level AA. A derogations case may therefore be put forward for each individual project which has a negative AA result. Projects are still able to put forward their own compensatory measures and do not need to use those that have been identified for the updated SMP-OWE or sit within a future Marine Recovery Fund. In these circumstances, these projects would benefit from having a streamlined derogation process (in relation to the first two tests of the derogations process, namely feasible alternatives and IROPI, though considerable work by MD LOT and specialist advisers would be required to determine the efficacy of the compensatory measures put forward.

As the regulatory body responsible for processing applications and supporting organisations, MD-LOT may also face resourcing pressures due to the updated SMP-OWE. This is due to the higher level of GW capacity that was leased for in the ScotWind leasing round compared to the GW capacity assessed for by the SMP-OWE 2020 and INTOG leasing round. In order to mitigate the risk of delays to application processing, resourcing of MD-LOT has been reviewed to match expected workflow, and the team is now at full complement, with additional resourcing also brought into teams that support MD such as the Marine Directorate Science Evidence Data and Digital (SEDD), and separately NatureScot as a relevant stakeholder.

Other impacts

Various other impacts have been identified and considered as a result of updating the SMP-OWE, however, remain uncertain at this stage. The absence of the updated SMP-OWE does not prohibit MD-LOT from processing applications or Scottish Ministers from making licensing and consenting decisions. However, engagement with MD-LOT highlighted that more impacts would be felt if the updated SMP-OWE was to be adopted halfway through the licensing and consenting process of a project, rather than from the start, then projects that have already received consent may be impacted differently from those that are only midway through the licensing and consenting process. There were also concerns raised regarding the order of seabed-leasing, sectoral marine planning and granting consents to offshore wind developments, and how the overall impacts were felt by developers and stakeholders in the marine environment, particularly with the updated SMP-OWE planned for adoption after consents have already been granted to offshore wind sites. It was highlighted that the timing of the delivery of the updated SMP-OWE would impact on MD-LOT and its processes, particularly on resourcing requirements, and the consistency and timing of regulatory processes.

In order to mitigate some of these other regulatory impacts, the Scottish Government is supporting and enabling the training and upskilling across public sector resources and ensuring a pipeline of future planning and consenting professionals. Technical improvements to standardize processes are also being undertaken, as well as working with statutory consultees to improve efficiencies across the system.