Overhaul of national policy for new energy infrastructure

Richard Griffiths of Pinsent Masons, the law firm behind Out-Law, was commenting after the UK government published a series of draft national policy statements for energy infrastructure – documents which, when finalised, will guide decision-makers on the application of government policy when determining applications for development consent for nationally significant energy infrastructure under the Planning Act 2008 regime.

“The government is seeking to establish a policy framework that recognises the innovation that is currently taking place in the energy market,” Griffiths said. “A clear theme in the revision is flexibility – flexibility in terms of providing support to ‘novel’ technologies that could emerge during the life of the national policy statements and which could assist in decarbonising the power sector thereby providing a level of policy support and confidence to developers and funders; and flexibility in terms of a realism that to provide the UK with a secure, reliable and affordable supply of energy there will be a need for natural gas peaking plants even in 2050, albeit infrequently.”

“This revision is a careful balancing act by the government to meet its ‘net zero’ targets whilst ensuring it has enough electricity to meet the demand as we electrify the economy,” he said.

The UK government has committed to meeting a series of greenhouse gas emissions reduction targets to combat the effects of climate change. Perhaps most notably, the UK’s Climate Change Act 2008 was amended to increase the target emissions reductions of 80% against 1990 levels by 2050 to 100% – a target colloquially known as achieving ‘net zero’ emissions.

That statutory target has been included in the government’s latest proposed policy revisions, along with its intermediary target of achieving a 78% reduction in emissions by 2035.

The current suite of energy national policy statements were designated under the Planning Act 2008 in 2011. They include an overarching policy statement (EN-1) as well as five further policies specific to fossil fuel electricity generating infrastructure (EN-2), renewable energy infrastructure (EN-3), gas supply infrastructure and gas and oil pipelines (EN-4), electricity networks infrastructure (EN-5), and nuclear power generation (EN-6). Policies EN-1 to EN-5 are subject to revision under the proposals the government has published.

The current policy on nuclear policy generation, EN-6, relates to nuclear electricity generation deployable by the end of 2025. The government has confirmed that EN-6 will not form part of this review, and a new policy statement for infrastructure deployable after 2025 will be developed to reflect the changing policy and technology landscape for nuclear. However, the draft revised overarching policy statement provides a level of support for emerging technologies, such as small modular reactors. 

In its draft revised overarching policy statement, the government acknowledged that much of its plans to decarbonise the UK’s economy involves electrification, such as in the areas of transport, heat and industry, and that this in itself would likely result in more than half of the UK’s energy demand being met by electricity by 2050, up from just 17% in 2019. It said low carbon hydrogen would also be “likely to play an increasingly significant role” in ensuring the UK’s energy demands are met.

However, the government’s draft new policies not only focus on the desire to decarbonise but on the need to ensure that there is security of energy supply in the UK and that the cost of energy is affordable for end-users. It said the need for new energy infrastructure in this regard is “urgent” and has proposed that the UK’s energy infrastructure be made up of a mix of energy sources, including renewables, nuclear, low carbon hydrogen, residual use of unabated natural gas and crude oil fuels for heat, electricity, transport, and industrial applications.

A significant planned change to the national policy statement for renewable energy (EN-3) is the introduction of solar PV, technology considered unviable above 50MW when the original NPS was designated in 2011. Since then, the rapid advance in solar PV technology, falling costs and large transmission connection capacity becoming available due to conventional power plants being decommissioned, has resulted in a new era of “utility-scale” solar projects.

The 350MW Cleve Hill Solar Park, which received the first development consent order (DCO) for a solar nationally significant infrastructure project (NSIP) in May last year, paved the way for similar scale projects, including Sunnica Energy Park and Longfield Solar Farm, with a further 10 to15 currently at pre-application stage, ranging from 300MW to 1GW. The new EN-3 acknowledges that large-scale solar is now viable subsidy-free and at little to no extra cost to the consumer, and as such is a core part of the government’s strategy for low-cost decarbonisation of the energy sector.

Renewable energy expert Gareth Phillips of Pinsent Masons said: “There is much in the proposed new renewable energy national policy statement for solar developers to be enthused about. BEIS has drawn upon key themes from the Cleve Hill Solar Park DCO and cemented them in the new policy.”

“The acknowledgement that installed export capacity should not be seen as an appropriate tool to constrain the impacts of a solar farm, the importance of grid connection capacity and that agricultural land type should not be a predominating factor in determining site selection, and that applicants may seek flexibility for the installation of energy storage, with the option to install further panels as a substitute, are all important features of the new policy. So too the clear statement that for the purposes of determining the NSIP threshold of 50MW, a solar park’s capacity should be measured in AC, ending uncertainty that has dogged the solar industry for over a decade,” Phillips said.

While the government identified the clear role for “known technologies”, including offshore wind, solar and wave power in the context of renewables, it said other “nascent technologies, data, and innovative infrastructure projects” will be needed too and confirmed that planning decision makers should give “substantial weight” to “novel technologies or processes” that emerge during the lifetime of the policy statements where these are shown to have utility.

One technology specifically referred to in the government’s proposals is carbon capture and storage (CCS). The government said that “there do not appear to be any realistic alternatives to new CCS infrastructure for delivering net zero by 2050” and has proposed to revise its policy so that the secretary of state gives “substantial weight” to their need when reviewing proposed developments of national significance.

The government also confirmed that it is developing business models to “incentivise the deployment of Carbon, Capture, Utilisation and Storage (CCUS) facilities and hydrogen in the UK”. It said it will put in place “a commercial framework which will enable developers to finance the construction and operation of power and industrial CCUS facilities” and added that it could apply other “levers”, such as the UK emissions trading scheme, the carbon price support tax, or the emissions performance standard, “to encourage further decarbonisation within the power sector”.

Gareth Phillips said: “The proposed new renewables policy also makes a very strong case for offshore wind, reiterating the government’s target to have 40 GW of offshore wind capacity – including 1 GW floating wind – by 2030. Significant emphasis is placed on cooperation and coexistence between competing users and uses of the seabed, with developers encouraged to work together to realise the different technologies required to achieve decarbonisation.”

No new coal or large-scale oil-fired electricity generation will be supported under the new policy statements as the government confirmed it is “taking active steps to phase them out of the energy system”.

In terms of the assessment of new infrastructure, and the government’s “general policies for the submission and assessment of applications relating to energy infrastructure” set out in the draft overarching energy national policy statement, changes have been made which align with the proposed Environment Bill currently progressing through parliament. New sections have been added on marine considerations and biodiversity net gain and further detail added on environmental principles.

The existing policies set out in the current suite of energy national policy statements will continue to provide the basis for decisions on development consent for nationally significant energy infrastructure until the proposed new policies have been designated

The draft new policy statements are open to consultation until 29 November 2021. Richard Griffiths of Pinsent Masons said promoters of applications being submitted before the changes take effect should assess their project against the draft policies given that the draft policy statements can be considered “important and relevant” considerations in decision making.

The publication of the draft new national policy statements for energy follows on from the publication of the energy white paper by the UK government at the end of last year. That paper sets out the government’s ‘vision’ for the transition to clean energy by 2050. The white paper committed the government to review the existing national policy statements for energy to ensure that they reflect the policies in the white paper and that “we continue to have a planning policy framework which can deliver the investment required to build the infrastructure needed for the transition to net zero”.

The government has promised to publish a new net zero strategy ahead of COP26, the 26th meeting of the United Nations Framework Convention on Climate Change, in Glasgow later this year.