Last month, Bird & Bird attended the Future of Utilities Summit 2023 in London, and a key area of discussion was the major obstacles that the current planning regime poses to the achieving the UK’s net zero carbon goals.
The UK Government has set a target to decarbonise the electricity system by 2035 and the entire energy system by 2050 whilst simultaneously, the demand for electricity will only continue to increase (by as much as 50%) as more people move towards electric vehicles and heating systems.
To meet this ambition, the UK needs a planning regime which will accelerate rather than hinder our pathway to domestic low-carbon energy generation.
The planning regime should play a key role in delivering timely and efficient renewables projects. However, the reality is that the current system is full of complexities and bureaucracy causing delays even to construction-ready projects. According to Ofgem, an estimated quarter of applications for Grid connections approved in the last year have been offered connection dates of 2030 or beyond. Whilst action is already being taken by the Government to speed up planning decisions on major infrastructure projects, there is urgent need for further reform.
Clarify the National Policy Statements (NPSs) to support the delivery of Net Zero infrastructure
The energy NPS, first published in 2011, set out the UK Government’s policy for the delivery of energy infrastructure and provides the legal framework for planning decisions. The overarching energy NPS (EN-1) sets out the needs and general assessment principles for energy. The energy NPSs for fossil fuels, renewables, gas and oil pipelines, electricity and heat networks, and nuclear (NSP EN-2 to 6) set out technology specific assessment principles.
Whilst there has been a recent Government consultation on redrafting the NPS, in order to effectively build the infrastructure required to deliver the transition to Net Zero as an immediate step, the NPSs need to be clarified.
The NPSs must be concise, proportionate and in plain English. They should provide clarity for infrastructure developers preparing application documents, those engaging in the process and decision makers conducting examinations. Furthermore, the NPSs must specifically reference the current climate crisis and global Net Zero targets. According to Energy UK, the trade association for the energy industry, there should be a strong presumption across all NPSs in favour of granting planning consent to renewable and low carbon energy projects and associated infrastructure, including projects required to provide security of supply.
As echoed by panellists at the Future of Utilities Summit, it is clear that in order to meet our global energy goals, the Government needs to take a proactive rather than a reactive approach to reforming the planning regime. A clear and well-defined planning regime with Net Zero at the centre will provide corporates, developers and the regulator with a roadmap to planning decisions for renewables projects. This should in turn remove unnecessary complexity and instil confidence in the process as a whole, thus driving further growth in the energy sector.
Streamline the current consenting process for major energy projects
The current Development Consent Order (DCO) process for Nationally Significant Infrastructure Projects provides an alternative route to approval for major projects. Whilst the consenting process has served the UK well for more than a decade, the demands on the system are changing and its effectiveness has slowed. In their recent paper, ‘Make Britain a Clean Energy Superpower’, the Labour Government pledged to reduce the time projects take to obtain planning from years to months by introducing tough targets for local authorities regarding renewables projects. It also plans to introduce a new framework to monitor decision times and a designated body within the Government to ensure things stay on track.
“It often takes longer to a permit a windfarm than to build it, causing unnecessary delay to urgently needed deployment of green energy. It is both possible and necessary to speed up the energy transition and to do so with better outcomes for biodiversity, jobs and local communities”. Ingrid Reumert, Senior Vice President of Group Stakeholder Relations at Ørsted.
Sufficient resourcing to accelerate planning decisions
Without adequate resourcing, even the most efficient planning regime will buckle under the sheer volume of planning applications received. On average, it currently takes 13 years to develop a new offshore windfarm, with up to four of those years spent battling through the planning process. It is clear that the planning system is understaffed and overstretched, and this causes further delay to key projects getting off the ground. Is it clear that any reform to policies and planning processes need to be coupled with an appropriately resourced and dedicated renewables planning department.
The Grid
Reform to the current planning regime will increase the domestic supply of clean renewable energy. Therefore, ensuring that these assets can connect to the Grid when and where they are most needed will be crucial to achieving the UK’s Net Zero ambitions. At the Future of Utilities Summit, Zac Richardson, Director of New Infrastructure at National Grid, mentioned that the current connection system is set up to handle between 30 and 40 applications per year but that due to the rapid increase in generation projects, they now sometimes get that number of applications in a week.
Research carried out by The Electricity System Operator (ESO) shows that only 30-40% of renewables projects in the Grid connection queue make it to connection. Contentiously, the Grid connection queue also currently operates on a ‘first come first served’ basis. This can result in renewables projects further up the queue holding back projects which are connection ready, even if those projects further up the queue are not ready to plug in. National Grid are proposing a shift from the ‘first come first served’ approach to a ‘connect or move’ connections process and this has been generally welcomed by major stakeholders; however, the risk remains that if developers terminate their place in the queue without connecting, hefty fines may be imposed.
But where do I fit?
The case for a clearer, faster and more transparent planning regime for renewables is compelling. It is evident that any reform to the planning regime must reflect the UK’s ambition in both energy security and Net Zero carbon. Developers, local authorities and other stakeholders have a key role to play in sparking reform. Traditionally, the energy and utilities sector has not been as collaborative as some other sectors but there is now a real need for stakeholders at all stages throughout the planning process to engage early with any draft legislation or planning policies to fast track change.
We would love to hear your thoughts on the current planning system as well as your experiences with it so please do not hesitate to get in touch with us either at Tarik.kenan@twobirds.com or charlotte.addley@twobirds.com.
For further information, please contact:
Charlotte Addley, Bird & Bird
charlotte.addley@twobirds.com
