Infrastructure Planning (Electricity Storage Facilities) Order 2020

Baroness Bloomfield of Hinton Waldrist Excerpts

Tuesday 27th October 2020 Grand Committee

Moved by

[Baroness Bloomfield of Hinton Waldrist]

That the Grand Committee do consider the Infrastructure Planning (Electricity Storage Facilities) Order 2020.

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, the draft order was laid before the House 14 July 2020.

Electricity storage will play a crucial role in helping us meet net zero by 2050. It provides flexibility so that renewable generation, electric vehicles and heat pumps can be integrated on to the system. Deploying smart and flexible technologies, such as storage and demand-side response, could save up to £40 billion by 2050.

We currently have around 4 gigawatts of operational storage in Great Britain. National Grid estimates that we could need up to 40 gigawatts by 2050. This Government are committed to creating a best-in-class regulatory framework for storage by removing barriers, reforming markets and investing in innovation through actions set out in our 2017 smart systems and flexibility plan. Reforming the planning system to remove barriers and introduce a more appropriate planning treatment is a key action for storage under this plan.

Currently in England and Wales, where storage facilities are above 50 megawatts and 350 megawatts respectively, planning consent must be sought from the Secretary of State under the nationally significant infrastructure projects—NSIP—regime. Where facilities are below these thresholds, they are consented by the relevant local planning authority.

Evidence collected through a consultation published in January 2019 demonstrated that the 50 megawatt threshold is distorting sizing and investment decisions in England. For example, there is a clustering of storage projects sized just below the 50 megawatt threshold, and projects have been split into multiple 49 megawatt projects to avoid consent through the NSIP regime.

Following consideration of this evidence, in October 2019 the Government consulted on removing electricity storage, except pumped hydro, from the NSIP regime in England and Wales. We received 28 responses from industry, which were broadly supportive. The NSIP regime was established to streamline the consenting process for major infrastructure projects where the benefits are national, but the planning impacts are local. Here, it is appropriate for the Secretary of State to weigh up this planning balance.

For batteries and more innovative forms of storage, the planning impacts are low compared to pumped hydro and other forms of generation. Therefore, the extra time and cost of the NSIP regime is not proportionate and limits the size of new projects to 50 megawatts. We have not seen any stand-alone battery storage facilities deploy above 50 megawatts. This order removes these technologies from the NSIP regime, meaning consent will generally be sought from the local planning authority. To ensure consistent treatment and a level playing field in economic competitiveness across the locations, this will also apply to Wales where the NSIP threshold is currently 350 megawatts.

If storage was removed from the NSIP regime only in England, there would be different approaches between England and Wales, as only consents for generating stations below 350 megawatts have been devolved to Wales. This would result in storage facilities of any size in England not being consented under the NSIP regime, whereas in Wales, storage facilities above 350 megawatts would be consented under the NSIP regime. Under the SI we are debating today, electricity storage, except pumped hydro, will generally be consented by the relevant local planning authority in England and Wales.

This SI could unlock investment in larger storage projects, supporting low-carbon jobs and decarbonising the energy system. Additionally, we estimate that this could save industry between £500,000 and £7 million annually. These savings are due to the reduced administrative costs associated with the local regime and a reduction in infrastructure costs where projects now choose to co-locate rather than build separately.

Once the legislation is passed, in England the industry will still be able to use Section 35 of the Planning Act to request that the Secretary of State direct a project into the NSIP regime for consent if it so wishes.

This order does not remove pumped hydro storage from the NSIP regime. This technology has significant planning impacts and often requires several other consents, which can be granted under the NSIP regime, making it a more efficient consenting route. Further to this, the pipeline for pumped hydro storage projects is located in Wales and Scotland due to their favourable geographic sites. The threshold for pumped hydro storage to be consented by the relevant Ministers as opposed to the local planning authority is 10 megawatts in Wales and 50 megawatts in Scotland. Therefore, retaining the 50-megawatt threshold in England better aligns with the treatment of pumped hydro across Great Britain.

Should Parliament approve this order, a parallel order will be required to amend the Electricity Act to ensure that consents for electricity storage fall within the local planning regime. We will ensure that this applies for facilities onshore and offshore, and we are working closely with the Welsh Government, who intend to put requisite legislation in place for storage, except pumped hydro, located offshore in Welsh waters.

This order will ensure that storage is treated appropriately in the planning system, according to its planning impacts. It removes a key barrier and unlocks the potential for large-scale storage projects, which are critical for meeting net zero. I beg to move.

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[Baroness Bloomfield of Hinton Waldrist (Con)]

I thank your Lordships for their valuable contributions to this debate. I conclude by emphasising the importance of the changes contained in this SI. The Government are committed to removing barriers to the deployment of electricity storage. The Government and Ofgem’s 2017 smart systems and flexibility plan sets out a range of actions that will be taken to enable the transition to a smarter and more flexible energy system.

This SI will remove electricity storage, except pumped hydro, from the national planning regime in England and Wales. It will result in an appropriate planning treatment for electricity storage. Sizing and investment decisions will be based on a project’s economic potential or capability to store renewables, rather than whether it falls under the NSIP threshold. We estimate that this legislation could save the industry between £0.5 million and £7 million annually.

The noble Lord, Lord Berkeley, asked about pump storage in England—actually, in all places—offshore. To clarify, we are applying this onshore and offshore for legal consistency. We are not aware of any developments of offshore storage. However, storage located offshore, should it be developed, would need to seek planning permission. In Wales, it would need a marine licence from either the Marine Management Organisation or Natural Resources Wales, so there is an element of future-proofing this legislation.

The noble Lord, Lord Berkeley, and the noble Baroness, Lady Bennett, asked whether, given the enormous demand for storage in the future, this will be sufficient in meeting the demand for storage. We are taking a number of steps to remove barriers, reform markets and invest in innovation through the 2017 smart systems plan, including ending double payment of network and policy costs and making it easier to connect to the grid. We have made good progress in improving the regulatory and investment landscape for storage, and we are working closely with industry to develop the next phase of work under the smart systems plan.

The noble Baroness, Lady Bennett of Manor Castle, also asked about promoting household batteries. I wholeheartedly endorse her enthusiasm for these—and indeed for solar panel roof tiles. We have made good progress in improving the regulatory and investment landscape for storage, and we are working closely with industry to develop the next phase of work under the smart systems plan, including addressing barriers to domestic storage. The noble Baroness also made the point that saving energy is at least as important as generating it, which we should all keep in mind.

My noble friend Lord Robathan asked about the progress of battery storage development. There is currently about one gigawatt of battery storage in the GB system; the majority of this has been deployed since 2015. There are about nine gigawatts of storage in the planning pipeline, six gigawatts of which is battery storage and three gigawatts of which is pumped hydro.

My noble friend also asked about investment in new types of battery technology. We have launched a range of innovation competitions as part of our £70 million innovation funding for smart systems. This included a £20 million competition for demonstrating innovative storage technologies. As well as this, we have allocated £317 million to the Faraday battery challenge.

The right reverend Prelate the Bishop of Salisbury asked what additional funding will be given to local authorities. They already have experience of dealing with storage projects below 50 megawatts. We expect, with this legislation, to encourage projects to deploy at a larger scale rather than bring forward new projects. We are working with MHCLG to update the planning practice guidance to refer to storage. I will write to the right reverend Prelate on the possibility of future opportunities to discuss the Environment Bill. He also asked about support for rooftop solar generation; I will write to him with further detail on the actions that we are taking to support this.

In response to my noble friend Lady McIntosh of Pickering’s question about making electricity storage flood-proof, although her point is also applicable to other energy infrastructure, the planning system requires developers and decision-makers to consider the impacts of flooding on the projects in question. This will require consultation with the Environment Agency and other relevant bodies to ensure that any risks to infrastructure are thoroughly considered at every stage of the decision-making process. Following Sir Michael Pitt’s recommendations, guidance for local authorities in relation to this matter is now set out in the National Planning Policy Framework.

My noble friend also asked that local communities be involved in these decisions. These changes mean that storage facilities will generally be consented by the local planning authority, involving local communities in such decisions.

The noble Lord, Lord Grantchester, asked about the threshold for pumped hydro storage. There is no evidence to suggest a higher threshold is needed here. The analysis shows that the planned impacts of pumped hydro will be in an order of magnitude higher than other storage technologies, meaning that the NSIP regime is the most appropriate planning route. A 50-megawatt threshold is consistent with hydro generation, which has similar planning impacts.

The noble Lord also asked about our commitment to define storage in primary legislation. This is an important commitment, and one that we will honour when parliamentary time allows.

Several noble Lords asked about the development of pylons. I am afraid that I cannot give a detailed answer now; I will write to them on this.

To achieve net zero at the lowest cost, we will need significant levels of flexibility to integrate high volumes of low-carbon power, heat and transport. This will require a significant increase in the deployment of electricity storage. The changes contained in this order help to unlock the potential for large-scale storage facilities critical for meeting net zero.

To close, I will once more emphasise the importance of this order in removing a key barrier to the deployment of large-scale storage facilities. Approval of this order will help to bring forward such facilities, supporting low-carbon jobs and enabling us to maximise the output of our renewable generation and progress towards meeting net zero.

Motion agreed.