Ministers are considering whether to establish a "conservation bank" to help overcome planning objections to wind farms and other renewable-energy projects.

Planning problems have held back British onshore wind farms. Vestas blamed nimby (not in my back yard) objections for its recent decision to shut Britain's only wind-turbine plant, on the Isle of Wight (see panel below).

Vestas and other energy groups say planning delays and uncertainties make it riskier to invest in Britain than in other countries, where planning approval can take half the time and there are more lucrative incentives for developers.

Now ministers at the Department for Environment, Food and Rural Affairs think they might have found a way to speed up the system.

The concept is called "conservation banking". Companies developing clean energy could offset the impact of their projects by financing local environmental programmes, such as improving wildlife habitats. Huw Irranca-Davies, minister for marine and natural environment, said this could help to fast track renewable projects through the planning system.

"The idea of conservation banking is to give businesses greater clarity and speed up the development of infrastructure projects, such as wind farms, that would otherwise suffer long delays or get rejected," said Irranca-Davies.

The concept holds huge potential for the onshore wind market, which has faced constant planning problems. Where other forms of energy generation - coal, gas, nuclear and offshore wind - look to national governments for consent, onshore wind projects must seek planning approval from local councils.

This means there are a lot of inconsistencies in the process. Whether projects get approved depends as much on the opinion of local residents as it does on the environmental impact.There is more than twice as much onshore wind capacity stuck in planning as there is in operation (see illustration).

This does not bode well for Britain's climate targets. Renewable power now represents about 5% of total electricity generation. This needs to triple over the next decade if the UK is to meet its legally binding pledge to cut emissions by 34% within that time. As wind power is expected to represent the lion's share of our clean energy, it is crucial that the government sorts out the planning barriers that stop onshore wind farms being built.

Opponents of wind turbines think the idea of a conservation bank has some merit. Steve Bazeley of the community lobby group Residents Against Turbines (Rats) is cautiously enthusiastic.

Earlier this year Rats blocked Scottish Power from expanding its onshore wind capacity in Cornwall on the grounds that the turbines would blemish the village landscape and cause noise pollution. But Bazeley said residents might have been persuaded to swallow some of their objections for the right price.

"People respond to financial incentives so, if there's a way for the local community to earn money from conservation banking, then it might help get more projects approved."

Conservation banking has been a success in America and Australia.

The scheme works in a similar way to Britain's carbon emissions trading mechanism. Project developers offset their environmental impact by purchasing conservation "credits" from either conservation banks or private individuals. In exchange, the sellers guarantee the creation of a new habitat or some other biodiversity programme.

Anyone - be it a private company, local authority or individual - can create credits to sell to developers so long as they have land suitable for a conservation project, said Kerry Ten Kate, an independent consultant who is advising the government on how conservation banking could work here.

For example, in Victoria, Australia, most of the credit suppliers are individual landowners, such as farmers. They generate offsets, which they sell to developers, who in turn agree to improve the management of the vegetation on the land. The money paid by the developer goes to the landowner over 10 years as the gains are established.

The British government will issue a formal consultation on conservation banking later this year to get feedback from environmental lobby groups and businesses.

Turbines chief attacks planning system

Nowhere are the problems of Britain's planning system more evident than in wind energy. The UK is breezier than any country in Europe yet we are squandering an opportunity to develop clean domestic energy, writes Danny Fortson.

Ditlev Engel is the boss of Vestas, the world's largest turbine maker, which was criticised recently for closing its only UK plant, on the Isle of Wight. The move led to the loss of some 600 jobs.

Engel said the closure was caused by the difficulty in securing planning approval for wind turbines, which had slowed down construction. He described Britain's approach as "like being in Saudi Arabia and not drilling for oil".

"A lot of countries really admire the UK for the wind resources it has, but there is a big difference between potential and reality," he said.

Vestas, meanwhile, has unveiled plans to build facilities in China and America, the two biggest markets for wind, where large farms can be erected faster and with less fuss than in Britain.

"We got out not because of the wind but because of the impossibility of implementation," said Engel. "We are investing in America and China because that's where the opportunity is.

"It's such a great shame that in Westminster they have made such an effort but it is not feeding through to the regions."

The government has proposed the creation of a new infrastructure planning commission that will take decisions on large projects out of the hands of local authorities.

Already delayed, the commission will be of limited value for wind power because it will only be able to decide on projects of 50MW or larger. This means that most offshore farms, which generally have less trouble getting planning approval, will fall under its remit. Virtually all onshore farms fall below that threshold so they will not benefit from the new system.

Engel said: "We have said that we would invest in the UK again if we see a step change. They have a saying in America: ‘Just do it.'

That's where we are here."