The Secretary of State for Energy Security and Net Zero (Claire Coutinho)
The UK is a world leader in renewable energy: in the first quarter of this year, 48% of our electricity came from renewables, up from just 6% in the first quarter of 2010. Our renewable electricity capacity has increased more than fivefold in the last 13 years and we must go further. Energy security means national security.
We must replace imported fossil fuels with cheaper, cleaner, domestic sources of energy. That is how we will ensure that the UK never again suffers the rising prices caused by Putin’s weaponisation of energy following his invasion of Ukraine.
As we increase electrification and decarbonise heat, transport and industry in our transition to net zero, we expect a doubling in demand for electricity by 2050. This underlines just how important the grid will continue to be to our way of life, and we will need around four times as much new transmission network in the next seven years as we have built since 1990.
That is why I am announcing an ambitious programme to deliver transformation of the electricity network, ensuring that the network can support our energy security and the transition to net zero. We will halve the time it takes to build new transmission infrastructure, from around 12-14 years to seven years. We will also drastically reduce the amount of time it takes viable projects to connect to the grid, reducing the average delay from five years to just six months.
This package of announcements will reduce consumer bills, support economic growth and drive jobs and investment across the UK. Together, reforms to upgrading the transmission network and connecting to the grid could bring forward £90 billion of investment over the next 10 years.
Transmission Acceleration Action Plan
In 2022, the Government appointed Nick Winser CBE as Electricity Networks Commissioner, to advise on halving the end-to-end build time for transmission infrastructure. The commissioner’s report, published in August 2023, set out 43 recommendations, which, taken together, will achieve that goal. The “Transmission Acceleration Action Plan” is our response to those recommendations. It sets out how the Government and key delivery partners will deliver all the recommendations in the commissioner’s report, and in some cases go further.
There are eight key areas of action:
Strategic Spatial Planning
Through the strategic spatial energy plan (SSEP), we will have a better co-ordinated approach to how we plan generation and network infrastructure. This will increase certainty for investors and industry and create a more efficient system, with reduced waiting times for grid connections. The future system operator will work with Government to develop the SSEP, and we will commission the electricity system operator to begin this work early next year.
Design Standards
We will ensure better standardisation of infrastructure and equipment, and we will provide clarity on the points on which communities have a role in decision making.
Regulatory Approval
By streamlining the regulatory approval process, we will unlock investment and provide early clarity on delivery. We will also stimulate investment by introducing competition into some electricity network projects.
Planning Approval
Our reforms to planning processes will include fast-track approvals and updates to the energy national policy statements (NPSs). The updated NPSs will ensure that need for new infrastructure is balanced with impacts on the environment and communities. We are also announcing a review of energy consenting rules in Scotland.
Supply Chain and Skills
To support the expansion of strong, home-grown, clean energy supply chains across the UK, the Government will ensure early engagement at scale and have announced the green industries growth accelerator. This includes a commitment to providing £960 million to support key net zero sectors, including electricity networks, and will enable the UK to seize growth opportunities through the transition to net zero, building on our world-leading decarbonisation track record and strong deployment offer. A green jobs plan will also be published.
Communities and Engagement
We will introduce a community benefits package for communities who host transmission infrastructure, alongside a national communications campaign to improve public understanding of electricity infrastructure and its benefits.
Outage Planning
To enable grid transformation, we will optimise our outage planning arrangements to strategically plan outages in the short, medium and long term.
End-to-End Process
We will put delivery governance in place to monitor and drive delivery of the overall package. A new ministerially-chaired transmission acceleration forum will convene Ofgem and delivery partners to track progress of the actions set out in our transmission acceleration action plan. We will also monitor the impact on delivery of transmission infrastructure on the ground. This forum will also align with the governance being established to support delivery of the connections action plan.
Connections Action Plan
Over the last five years the volume of connection applications to the transmission network has grown approximately tenfold. This has led to an average delay of over five years for projects applying to connect to the transmission network. This affects our ability to decarbonise our energy system, roll out low carbon technologies and attract investment into the UK.
The total connection queue across transmission and distribution is around 500 GW, five times the amount that is currently connected. We know that too many projects in the connection queue will not connect and many are hoarding capacity, preventing viable projects from connecting. Action is already underway to free up capacity and accelerate connections, and network companies are starting to offer earlier connections to customers.
However, the actions underway will not be sufficient to deliver the change we need. This led to the commitment in “Powering Up Britain: Energy Security Plan” to publish an action plan to set out how we will go further and faster to accelerate network connections.
The result is the “Connections Action Plan” which is published jointly with Ofgem and will overhaul the way projects access the grid. This will:
Release over 100 GW of capacity from the current queue, equivalent to around a quarter of the electricity needed to power our economy in 2050;
Remove speculative “zombie” projects, giving the ESO powers to terminate the connection agreements of stalled projects; and
Establish a triage service for strategically important demand customers.
These measures will drastically reduce the time it takes viable projects to connect to the grid. We will reduce the average delay a project faces to connect to the transmission network from five years to six months, with the aim that the vast majority of projects connect in line with their requirements. The measures set out will ensure that Great Britain continues to be one of the best places in the world to connect.
Community Benefits for Transmission Network Infrastructure Government Response
In order to support the growth of new generation, the Government consulted on proposals for community benefits for electricity transmission network infrastructure earlier this year. I am pleased to announce that, based on feedback from the consultation and social research, we have concluded that there is a preference for a combination of electricity bill discounts and wider community benefits (community schemes such as education initiatives for young people, local parks, community energy generation or energy efficiency measures), and that communities would prefer a mandatory scheme.
Based on analysis to date, we are minded to move forward with a package of:
an electricity bill discount for properties located closest to transmission network infrastructure. While the exact scheme design is still under development, we estimate this could offer, for example, up to £10,000 per property (£1,000 per year, £80 per month, for 10 years); and
a wider benefit for the local community of around £200,000/km (~£320,000/mile) for overhead lines, £40,000/km (~£60,000/mile) for underground cables, and £200,000 per substation. It will be for the local community to decide in consultation with the developer what projects they would like to support.
Community benefits are separate from the planning process and will still not be a material consideration in planning decisions. They are intended to recognise the vital role that communities hosting onshore network infrastructure are playing in ensuring a cheaper, secure and low-carbon energy supply in Great Britain. Communities may oppose planning applications but still benefit from community benefit packages offered by developers if the project goes ahead.
Further work is needed to design the detail and implementation of the overall scheme, and we will work with industry, Ofgem and community representatives to ensure that the scheme works for communities and can be effectively delivered and administered, without unacceptable costs for other bill payers as we transition towards net zero. Its effectiveness will be reviewed once implemented.
To deliver community benefits as soon as possible, we will publish voluntary guidance on wider benefits and provide further information on the overall community benefits policy. This will include options for developing a mandatory approach and bill discount scheme in 2024. Whilst we continue to explore options for a mandatory approach, we will consider whether to establish a community benefits register. This would be a publicly available register, updated by local communities and/or developers involved in developing community benefit packages, setting out details such as the wider community benefit package and the level of funding. It will provide accountability and inspiration for packages.
Energy National Policy Statements (NPSs)
Having considered the responses to the consultations, I am pleased to be able today to present five revised energy national policy statements for parliamentary approval. This represents a further important milestone in our effort to ensure the energy security of the United Kingdom, and to achieve net zero. National policy statements are a crucial part of ensuring that the planning system is fit for purpose. These revised NPSs mean that developers can put forward energy projects without having to negotiate unnecessary delays, that communities can have their say about how their local area develops, and that decisions are made in an accountable way by Ministers.
Investment in our nation’s infrastructure is key to enabling the growth and jobs that the UK needs. The revised energy NPS will ensure that the UK has diverse sources of electricity generation, and that we remain at the forefront of low-carbon technological development.
While ensuring that all necessary legislation to protect the environment and habitats is respected in any energy development, the revised NPSs provide for the application of a critical national priority criterion. It has been necessary to include this due to the growing pressure on the UK’s energy supplies from international events and actions, and the consequent rise in energy costs for business and households across the United Kingdom.
The revised NPSs I am laying today set out national policy in key energy policy areas:
EN-1 covers the overarching needs case for different types of energy infrastructure;
EN-2 5 deal respectively with natural gas electricity generation, renewable electricity generation, gas and oil infrastructure and electricity networks; and
The supporting appraisal of sustainability and habitats regulations assessment.
I am today also publishing the Government’s response to the latest consultation, to which there were over 170 responses with a further 1100 inputs received via three campaigns.
I will deposit copies of all these documents in the Libraries of both Houses and they are available on gov.uk.
[HCWS62]