The Parliamentary Under-Secretary of State, Department for Energy Security and Net Zero (Lord Callanan) (Con)
My Lords, I start by thanking my noble friend Lord Swire for bringing forward this extremely important issue. It is right that we should debate it. I also thank all noble Lords who have contributed to this debate.
I remind noble Lords that the revised national policy statements for energy infrastructure, including a specific one with the catchy title of EN-5 on network infrastructure, came into force less than two months ago. Among other things, these set out the Government’s expectations for the use of undergrounding, which is the practice of laying electricity transmission cables underground and the subject of this debate.
That National Policy Statement for Electricity Networks Infrastructure states, as other noble Lords also recognised, that
“overhead lines should be the strong starting presumption for electricity networks developments in general”.
However, in nationally designated landscapes, such as national parks or areas of outstanding natural beauty—for example, Dedham Vale, which my noble friend mentioned—
“the strong starting presumption will be that”
developers
“should underground the relevant section of the line”.
That accounts for the importance of protecting the natural beauty of these areas. That strong starting presumption for overhead lines remains flexible, however, and undergrounding may be used in other areas in certain circumstances—namely, where there is
“a high potential for widespread adverse landscape and/or visual impacts”.
The noble Baroness, Lady Blake, acknowledged this point.
I hope that my noble friends Lord Swire and Lord Effingham are at least partly reassured on the flexibility available in certain locations. Such decisions will be weighed up by the Secretary of State. Furthermore, my noble friend Lord Effingham asked what proportion of overhead cables will be replaced with underground ones. I can advise that only those in protected landscapes would be. It is a relatively small or modest proportion. We acknowledge the beauty of our areas of outstanding natural beauty, hence our starting presumption of undergrounding in these areas.
My noble friends also asked about communications with Ofgem. I am not aware of any specific discussions that we have had with it on the possibility of increasing funding for the visual impact provision projected by the energy industry, but my officials will go back to Ofgem and I will write if we discover any further information or discussions on that subject.
The Government arrived at this policy position for various technical, operational, environmental and, of course, cost reasons. I seek the indulgence of the Committee to talk noble Lords through them, but before we delve into the depths of underground cables, if noble Lords will forgive the pun, and before I turn to the specific points raised I will give some context to the debate.
As Members of the Committee and, I assume, everyone taking part in this debate will know, the Government remain committed to our net-zero targets. To get there, we are accelerating domestic energy production. However, it is similarly critical that we expand our network infrastructure—a point recognised by all noble Lords. Without that, how are we to get the electricity generated in the North Sea, off the coast of Aberdeenshire and the rest of Scotland to the consumers who wish to use it?
To achieve this, we need to build about four times as much transmission infrastructure by 2030 as we built in the previous 30 years. I repeat that point: we need to build four times as much infrastructure by 2030—in five or six years’ time—as was built in the previous 30 years. It will require an estimated £40 billion to £60 billion of investment in our electricity transmission infrastructure by 2050. Let me be straight: in practice that will include building more overhead lines to connect supply to demand. I accept that will be an unpleasant pill to swallow for many in the Committee and, undoubtedly, within the country as a whole and some rural areas. However, it is one that we cannot shy away from.
The reason for that is that there are many benefits to so doing. Overhead lines are much easier to maintain. Trying to identify a fault in an underground cable is like finding a needle in a haystack, with multiple disruptive excavations needed, and often takes many weeks to complete. Overhead lines are much cheaper to build, as has been said. Some estimates suggest that undergrounding may be between five and 10 times more expensive, as the noble Lord, Lord Bruce, mentioned. Costs depend on the topography of an area and other factors. Those costs are ultimately passed on to consumers through their electricity bills. That is a difficult case to make to families up and down this country who are struggling with the cost of living, and it sets a high bar to meet for changing the Government’s policy.
I have talked about the urgent need to accelerate the deployment of new transmission infrastructure, and overhead lines are much quicker to build than underground lines. Some of us think that the time taken to build overground lines is long enough, but it would cost much more if we had to put them all underground. As noble Lords will well know, and have raised, time equals money and the longer the delays to rolling out transmission infrastructure, the higher developers’ constraint costs. Network constraints occur when the electricity transmission system is unable to transmit power to electricity users because the maximum capacity of the circuit is reached. The National Grid electricity system operator manages those constraints by paying generators to switch off or turn down in locations where the network is congested, and to switch on or turn off in locations closer to electricity users. Those constraint costs are ultimately passed on to consumers.
Analysis from National Grid indicates that, if delays to network build persist, annual constraint costs could rise from around £2 billion per year in 2022 to around £8 billion per year in the late 2020s. That would be the equivalent of an extra £80 per household per year. Undergrounding more of our essential transmission infrastructure would, I am afraid to say, only increase that cost to consumers even further.
Let me be clear that undergrounding has an important part to play in developing and delivering our critical network infrastructure, and is rightly the default starting position for protecting our most important landscapes, where overhead lines cannot be rerouted. This helps to mitigate the visual impact associated with overhead lines and pylons, which many communities are understandably concerned about—such as with those natural landscapes in East Anglia to which my noble friend Lord Swire referred. Burying cables underground, as the noble Lord, Lord Bruce, ably demonstrated and pointed out, also protects them against adverse weather conditions.
Another question that my noble friend Lord Effingham asked was about whether all future consultations on overhead lines can factor in the benefits of undergrounding. It is important for me to emphasise that developers, not government, are responsible for bringing forward the preferred design of an electricity networks project. The noble Baroness, Lady Blake of Leeds, asked how the balance was achieved in all cases by developers—and I assure the noble Baroness that developers take into account many things, including regulatory requirements, planning policy, cost, technical feasibility and environmental impacts. In doing so, it is all about striking a balance between all those different and often competing considerations. The consenting process considers and scrutinises those proposals. Undergrounding transmission is, I am afraid, not a simple change that can be made late in the process of a project’s development; it is something that needs to be considered very early in that process.
My noble friend also warned in his speech that something awful was about to happen to our countryside, by which I presume he is referring to the pipeline of overhead transmission infrastructure waiting to be built. It is equally important to emphasise that we must not downplay the environmental impacts of undergrounding. In fact, installing underground cables requires significant engineering works, which not only prolongs the construction time compared to overhead lines but causes significant damage to the surrounding area. The breadth of land needed for trench cabling, for example, is around the width of a football pitch. To the point made by the noble Lord, Lord Bruce, about situating water pipes next to underground electricity cables, I am afraid that that might not be such an efficient prospect after all. Of course, it would serve only to widen that trench even wider.
I move on to the point about the environmental and ecological impacts of overhead cables. The environmental impact of undergrounding, as I said, can be significant and indeed permanent, not only during installation but during operation. It can, in essence, create a somewhat sterilised strip of land where there were once trees and hedgerows, causing habitat and species loss. We should ask ourselves whether that is a price worth paying because of the visual impact of overhead lines; we may have different opinions about that. As with many discussions and considerations of energy policy, it is about balancing out different risks and problems in every area.
Lord Bruce of Bennachie (LD)
I understand what the Minister is saying, but we have certainly had experience of quite a number of pipelines being laid from the north of Scotland right across Scotland. That was years ago, but you would not know where they are now. So, yes, there was disruption at the time, but it settled completely.
The Minister acknowledged as well that security of supply could be an issue. Is that a factor that should be weighed a bit more heavily where there are lines that are systematically prone to disruption on a regular basis, so that undergrounding might be a better offer?
Lord Callanan (Con)
Yes, I absolutely concede the noble Lord’s points but, given the modern policy environment and all the legal impacts, much energy infrastructure that was built many years ago would be very difficult to build today. In past generations, consumers were perhaps much more understanding of installations of nationally significant infrastructure than they are now. I absolutely accept the noble Lord’s point. In all these considerations, it is also about balance—balancing out competing factors, of which cost is one and convenience is another, but security of supply is an equal factor that also needs to be considered. I suspect that the noble Lord is probably considering the low-voltage distribution network rather than the high-voltage transmission aspect of the supply.
My noble friend Lord Swire talked about the different creative technologies available for laying underground cables and asked whether the Government had considered those factors. Ultimately, it is not for the Government to opine on those matters. Those innovative solutions are quite rightly being driven forward by industry and they are a brilliant example of how we can use such innovations to support the delivery of our energy infrastructure ambitions and our net-zero infrastructure. The transmission owners and others are the experts in this field and, of course, we will continue to liaise with and support them in their endeavours.
I hope I have—but I suspect I have not—succeeded in persuading noble Lords that undergrounding is far from being the silver bullet in our endeavour to expand our network transmission infrastructure and meet our net-zero targets. In fact, using underground rather than overhead lines may in some respects have the opposite effect and lead to more delays rather than fewer, given that the installation takes much longer. In some cases, the upfront costs are perhaps not worth it in the longer term, as my noble friend Lord Effingham suggested. In our bid to greatly expand our domestic energy production and meet the needs of households up and down the country, I am afraid that we need to act and build networks faster than we have ever done in the past.
It is for those reasons, which I have talked the Committee through, that the Government have decided to maintain our policy position of a starting presumption of overhead lines for electricity network developments in general. That is not to say that the Government stand idly by while communities living in the path of new transmission infrastructure are affected; it is quite the opposite. That is why, at last year’s Autumn Statement, the Chancellor announced proposals for a community benefits scheme for communities living near transmission network infrastructure, which the noble Baroness, Lady Blake, asked about. The communications campaign is due this year and I invite the noble Baroness to get in touch directly so that we can provide more details on it.
I am afraid that I am running out of time, so I will move to my conclusion. I will write to noble Lords if I have not answered any of their points.
I do not need to tell the Committee that, as with so many issues, no policy is etched in stone indefinitely. In fact, the Government would not be doing our job properly if we did not keep policies under review. However, that falls far short of committing to look again at the Government’s current policy on undergrounding less than two months after it came into force. Now is not the time. The Government can determine whether this should be reassessed if and when more evidence is provided by industry. For now, the best place for the majority of transmission infrastructure is—I am sorry to say—up in the air, for technical, operational, environmental and cost reasons and, most importantly, to protect consumer bills.
Baroness Blake of Leeds (Lab)
May I ask for a written response with reference to the community benefit packages and the consultation package, just to give us an update? Several months have gone by and we should be moving on this.
Lord Callanan (Con)
I would be happy to write to the noble Baroness on that matter.