Nationally Significant Energy Infrastructure Projects

Michael Shanks Excerpts

Tuesday 30th June 2026 Westminster Hall

[The Minister for Energy (Michael Shanks)]

It is a pleasure to serve under your chairship today, Ms Vaz.

I thank my hon. Friend the Member for Suffolk Coastal (Jenny Riddell-Carpenter) not only for securing the debate but for all the conversations we have had. She should never fear repeating the same message; it is important. She does a great job championing her community in this place; she has always sought to do so, in all the meetings I have had with her. I might add that she has also sought to be constructive, as she reflected in her opening remarks. Her constituents are not against the move to clean power, and know how important it is, but they recognise that there are impacts locally. That is a really important place to be on this issue.

Communities that host nationally significant infrastructure obviously experience disruption and change, and that comes with real consequences. I understand the challenges that such infrastructure places on communities at a local level, and it is right that we not only take account of those concerns when they are raised but do everything we can to provide those people with the community benefits. They are hosting infrastructure on behalf of the nation, and they should benefit from that.

This important debate also comes to the heart of the broader question facing the country, and why we have, as a Government, decided to move even further and faster to deliver the infrastructure that not only delivers economic growth and energy security, but gets us off fossil fuels as quickly as possible. Infrastructure does matter, and I am not going to shirk away from making the argument that after a long period of not building the infrastructure this country needs, we have to build it. But communities have to be at the heart of that decision as well.

It is great to see that some young people have joined us for the debate, because at the heart of our reason for building this infrastructure is the future of our planet, as well as our energy security right now. For decades, we have not done enough to tackle the climate crisis, but neither have we done enough to safeguard ourselves from the volatility of fossil fuels, which has put all our bills up year after year. That is what this is all about, and I know my hon. Friend the Member for Suffolk Coastal absolutely supports that point.

It is also an economic opportunity. Just last week, we hit the huge milestone of £100 billion of investment in clean energy since this Government came to office almost exactly two years ago. That is creating jobs and boosting our energy security. As I have said, every wind turbine, every solar panel, every nuclear power station and every bit of transmission line that we build helps to create a more secure and resilient energy system now and in future. I do not say that lightly, as if building those projects does not come at any cost for people locally. New infrastructure does mean difficult decisions, and there will always be local impacts. I fully recognise that will bring concerns for local residents, just as much as it brings huge opportunities nationally.

My hon. Friend the Member for Suffolk Coastal powerfully outlined some examples of the impact of Sizewell C, one of the most important energy projects that we are building. The last time we built a nuclear power station in this country, I was not even born, so it is really important that we push forward on those projects. However, I recognise that the scale of Sizewell C has an impact on roads and local businesses. I would be happy to meet my hon. Friend again to talk specifically about that point; I would also be happy to set up a meeting with her and the team at Sizewell C, because I know that they are also seized of the importance of getting this right.

I should also say that this is partly why we have a rigorous planning system. All nationally significant infrastructure projects have to address the cumulative impacts to which my hon. Friend referred, and there are many opportunities for communities to have their say. I recognise that communities do not always feel that that is taken into account, but I say genuinely that it is taken into account. Projects have to demonstrate that they have considered the cumulative impact of other NSIPs as part of their process through the system.

I have said that communities providing a service to the country by hosting this infrastructure have to benefit from it. We have already taken decisive steps to ensure that they have tangible and lasting benefits. For the first time ever, we have announced community benefits from network infrastructure: direct bill discounts for consumers, so that those closest to transmission lines and substation upgrades feel the benefit in their energy bills, but also wider community benefits, so that communities can benefit from funding. The hon. Member for Strangford (Jim Shannon) and other hon. Members raised a point about long-term, sustainable and really impactful benefits. My constituency is close to some of the biggest onshore wind farms in Europe, and in truth we have not seen the long-lasting community benefits that we might have seen. This is about trying to shift that, so that there are real investments in communities.

[Ms Billington]

I recognise what my hon. Friend says, but as my hon. Friend the Member for Suffolk Coastal (Jenny Riddell-Carpenter) pointed out, these are guidelines at the moment rather than obligations. Because they are only guidelines, they can be ignored. Including things like jobs and traineeships within the community allowance limits the genuine potential benefit for host communities. We are grateful that we now have biodiversity net gain for nationally significant infrastructure projects. There should be a similar obligation to make sure that communities benefit and have ownership of and accountability for how that money is spent. I will say this now on the record: £2.1 million, as my hon. Friend said, is a rounding error. That should be multiplied by 10 if we are really going to get the benefit for our communities in the long term.

[Michael Shanks]

Let me come to both of those points. First, we are potentially confusing two different things. Community benefits for transmission infrastructure are mandatory; we have separately consulted on whether community benefits for wider energy projects should be mandatory, and we will respond to that consultation soon, because I recognise many of the points that have been made. What we do not want to do, though, is create one-size-fits-all solutions in Whitehall that will work differently in different communities. As a Minister, I do not want to sit here and say: “This is how your community benefit will work in your community.” Instead, I want to empower communities to figure out how that works best in their local area. I have seen models of that in all the visits that I have made across the country.

The minimum standards should be there to make sure that the process is transparent, with communities and not developers in the driving seat, and that there is long-term certainty. I do not think that we should say that play parks and cycle paths are bad things to invest in, but there should be some long-term investments alongside them. I have seen some good examples, just in the past few weeks, of that being done well. We need to separate out those two things.

I have wrestled with the cost point as well. In principle, I would like to see communities having even more community benefits, but we have to recognise that the cost of them will be borne by bill payers right across the country. The balance that we are trying to strike, as a Government determined to tackle the cost of living, is to have communities benefiting as much as they possibly can but without putting up bills significantly for all bill payers across the country, which would be a disproportionate impact at a time when the affordability crisis is our No. 1 priority.

[Helen Whately]

On the point about considering the community benefit, what counts as a community is really important. In some circumstances—this has come up in my local area—a large geographical area is considered as a community, even though the number of households that are very substantially affected is very small. It is what they want that should really matter. Yes, of course I care about what the wider community wants, but we need to think about the small number of households in which there has been a real impact on people’s day-to-day lives.

[Michael Shanks]

I totally accept the hon. Member’s point, although the point has been rightly raised that the impact of building these projects is often felt by a much wider community, which is why the community benefits are wider. I should also say that we have to separate questions of compensation from questions of community benefit. Compensation is paid, as part of a process, to those who have been significantly disrupted or whose land has been changed in whatever way: that is a contractual negotiation between a landowner or resident and a developer, and it is not for the Government to intervene in it. Community benefits are about a much wider view of how these projects benefit the wider community.

I take the point about the design of the community, which is really important. With something like the Sea Link offshore cable, it is sometimes hard to look at what the community around it would look like. We have wrestled with how to define it: there is a danger that if we have too broad a definition, the community benefit funds will not get to the people who would benefit most. There is probably more that we can do on that, and I am very open-minded about contributions from hon. Members on that point.

On the level of benefit—I know that these points have been raised before—the electricity bill discount will give the people living closest to the infrastructure money off their bills. We are seeking to remind people that the more of this infrastructure we build, the fewer constraints we have on the grid and the more we can get cheap, clean power into homes and businesses and bring down bills for everyone. There is an impact beyond the projects themselves.

[Jenny Riddell-Carpenter]

I do appreciate that argument, and I have toyed with saying this publicly, for good reason. Of course that is true, but in my constituency I also have lots of people who are off grid and are reliant on heating oil. With a lot of this infrastructure being built and hosted in my community, many people will not feel the benefit if they are reliant on other forms of energy. Until we understand that, we will not get to the heart of the frustrations that people living in Suffolk Coastal and other rural areas feel about this upgrade.

[Michael Shanks]

I take that point, to an extent, although being off the gas grid does not mean being off grid from electricity, so those people will benefit from cheaper electricity bills. I think that electrification is the answer, to support households off heating oil wherever possible. I know that that is not possible in every case, but there will be a lot of households that we can move away from heating oil, which protects them in the long term. We have also provided support for people on heating oil in the ongoing middle east crisis.

We have produced a working paper and a call for evidence on community benefits, which we are going through at the moment. We are also going further around shared ownership of low-carbon infrastructure. This Government do not see this issue as being just about community benefits. It is also about how we get communities either owning the entirety of the infrastructure themselves and holding the wealth that is generated in their community, or at least owning a share in it.

To their credit, in the Infrastructure Act 2015 the previous Government—although I suspect that they may not have realised this when they passed the Act—created a power to allow shared ownership. It was never enacted. We are now seeking to work out how to enact it so that communities can genuinely own a share. We know the difference that it makes: ownership matters, because it puts communities right in the driving seat when it comes to what they spend that money on. Whether they choose to make long-term or shorter-term decisions would be in their hands. That makes a hugely important difference to communities, as I have seen on visits.

[Ms Billington]

That is definitely the case for renewable energy generation projects, but we are talking about infrastructure projects. There needs to be some kind of mechanism by which we have some ownership and accountability for the communities that are hosting infrastructure projects. There particularly needs to be an energy foundation that allows them to reduce their energy bills, which would also take some of the overall burden off the grid.

[Michael Shanks]

I do not think we are disagreeing. Energy generation projects are infrastructure projects: whether the community owns them or not, the infrastructure still needs to be built. I would just like to see more communities owning those projects. We said in the local power plan that we want to make it possible to sell power locally, which would actively bring down bills, and for that wealth to be held locally. The grid and network infrastructure has to be built alongside that, which in previous years has not happened as much as it should have.

One of the biggest changes, which my hon. Friend the Member for Suffolk Coastal mentioned, has been about the cumulative impact and the sense that there has not been sufficient planning or a strategic approach. We will shift that with the national strategic spatial energy plan and, from that, the centralised network plan. We should have been doing that years ago. We have built lots of renewables projects, but have not worked out how we are connecting them to the grid. That is costing us in constraint payments, but it also means that we do not have as strategically aligned a grid as we should have. Unfortunately, we have to start from where we are. We will plan it more strategically moving forward, but I recognise my hon. Friend’s points.

Returning to the central point of this debate, I recognise that communities should absolutely be at the forefront of the energy transition. We want to see much more community and shared ownership as well as partnerships with communities, but the Government are also unashamedly building the energy infrastructure that this country needs to weather the uncertain world we live in today. That will protect us in the future and unlock huge economic benefits from electrification and the industries of the future. That means building things, and they have to be built somewhere.

My hon. Friend has frequently made the point that she agrees, but that she thinks Suffolk Coastal has faced a disproportionate number of those projects. I have some sympathy with her. We have to do everything we can to make sure that her communities and others like them benefit. The hon. Member for Inverness, Skye and West Ross-shire (Mr MacDonald) made a point about pumped-storage hydro, which is an example of the infrastructure our country needs. We need to get the community benefits right that come with these projects.

We have made huge progress in two years, but I am not going to stand here and say that the job is done. We need to continue to make sure that communities benefit as much as possible—not least because, in a fractured debate on the energy transition, we have a job to do to convince the public that this is a journey that benefits all of us. It will bring down bills and protect us in an uncertain world. Fundamentally, if communities are hosting it, they are doing the country a favour and we thank them for it, but they should also get some benefit.

I thank my hon. Friend the Member for Suffolk Coastal again for securing the debate. I look forward to meeting with her again; she should never fear bringing up these issues with me again and again, because they are hugely important. I take them seriously, and so do the Government. I hope that together we will find a way through.

Question put and agreed to.