Revisiting “necessary wayleaves” and a look at The Energy Act 2023 – A discrete but dramatic change
Sam Thompson, 19th September, 2024
It is increasingly common for companies and individuals to acquire land affected by significant electrical infrastructure, such as pylons and stays.
Additionally, power companies continually develop new energy supply routes, often planning paths where their equipment may interfere with or occupy private land.
Electrical infrastructure can significantly hinder landowners' development plans, even when planning permission has already been granted. Power companies may assert that their equipment and plans are untouchable, but landowners actually have several legal remedies at their disposal:
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Re-routing of Energy Infrastructure: A well-advised landowner, especially a large commercial entity undertaking major development, may successfully negotiate the re-routing of proposed energy infrastructure.
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Termination of Existing Wayleave Agreements: Where equipment is already in place under a valid wayleave agreement, a landowner can serve a “notice to terminate” under the terms of the agreement and paragraph 8(1)(b) of Schedule 4 of the Electricity Act 1989 (the Act). This brings the wayleave agreement to an end once the notice period expires, enabling the landowner to require the removal of the equipment.
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Removal of Equipment without an Agreement: If the equipment is in place without an express agreement, or if the agreement has been terminated, a landowner can serve a “notice to remove” under paragraph 8(2)(b) of Schedule 4 of the Act. The notice period specified by the Act is three months
However, one persistent challenge is the issue of the “necessary wayleave.”
Under paragraph 6 of Schedule 4 of the Act, a licence holder may, within three months of receiving a notice to remove their equipment, apply to the Secretary of State for the Department of Energy Security and Net Zero (DESNZ) for a necessary wayleave. To succeed, the licence holder must demonstrate why it is "necessary" or "expedient" for their equipment to remain on the land and assess the implications of not doing so.
While the terms “necessary” or “expedient” might seem to impose a high threshold, in practice, licence holders frequently succeed due to public policy considerations, particularly the need for uninterrupted electricity supply.
The Energy Act 2023 introduced a significant change to this landscape. Specifically, paragraph 25 of Schedule 15 amends paragraph 6(1) of Schedule 4 of the Act, replacing “for the licence holder” with “to obtain the right.” This seemingly subtle change expands the availability of necessary wayleave applications, particularly for new market entrants involved in onshore wind infrastructure following recent deregulation in that sector. According to the explanatory notes for the 2023 Act, this amendment allows winners of competitive tendering processes to benefit from the powers of licence holders.
As a result, we are likely to see an increase in electrical infrastructure installations, potentially interfering with the interests of a growing number of land developers. These developers will need a carefully tailored strategy to protect their rights and interests.
Land developers affected by such installations, or those facing the prospect of new infrastructure on their land, may be entitled to significant compensation. Our firm has extensive experience advising commercial developers on how to safeguard their developments and maximise their compensation opportunities.
If you own land with existing or planned electricity infrastructure, we encourage you to contact our team of experts. We specialise in this complex and niche area of law and can provide you with strategic advice tailored to your specific situation.
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Please do not hesitate to contact Matthew Fletcher, Sam Thompson or Tom White in our Litigation Team today today, on 01482 324252.