Supply and demand

The government has demonstrated its desire to fast-track major energy infastructure projects, but there are a significant number of steps to go through if the projects are to be designated before the general election. John Qualtrough looks at the detailed proposals.

The government have at long last published, for consultation, their suite of Energy National Policy Statements. When designated, these will guide the Infrastructure Planning Commission in the determination of applications for Development Consent Orders (DCOs) under the new unified consent regime, established by the Planning Act 2008 (the Act).

There are six draft National Policy Statements: Overarching Energy (EN-1); Fossil Fuel Generation (EN-2); Renewable Generation (EN-3); Gas Supply and Gas and Oil Pipelines (EN-4); Electricity Networks (EN-5); and Nuclear Power (EN-6).

The Overarching Policy Statement declares a need for a diverse mix of electricity generation (and fuels) including nuclear, renewables and fossil fuel generation. The Policy Statement says that there is a significant need for such infrastructure, and the IPC should start its assessment of applications on the basis that need has been demonstrated. In addition, it lists various generic impacts and gives guidance to the IPC in dealing with these. The technology-specific NPSs provide guidance to the IPC on siting, and further technology specific impacts.

The Overarching Policy Statement, when combined with the relevant technology-specific NPS, will provide the primary basis for decision making by the IPC. The IPC must decide an application for a DCO in accordance with the NPS except in specific instances, eg where there would be a breach of a statutory duty, the UK would be in breach of its international obligations, or the adverse impacts of a proposal would outweigh its benefits.

All NPSs have been subject to an appraisal of sustainability (AoS). In addition the Nuclear NPS has been subject to a strategic level habitat regulations assessment (HRA).

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The nuclear option

The nuclear AoS identified possible significant adverse effects on internationally important nature conservation sites, which will need to be considered (through EIA and appropriate assessment) at project level. In addition, following the HRA, the government has concluded in relation to the Nuclear NPS, that it cannot rule out the potential for adverse effects on the integrity of designated European sites.

Since there are no better alternative sites, the government rely on imperative reasons of overriding public interest in order to proceed with the nominated sites. It follows that despite the benefit of inclusion in the NPS, and the policy ‘presumption’ which that confers, a number of the nuclear sites will need robust environmental and ecological support, and accompanying mitigation measures, if they are to resist claims that the impacts are so seriously adverse, as to outweigh the benefits of the proposal.

The government conclude that there is a need for 25GW of non-renewable capacity and that nuclear power should be free to contribute as much as possible to meeting that need. Eleven sites were nominated by nuclear operators as part of the earlier Strategic Siting Assessment. Following that assessment, Dungeness has fallen out of account because of concerns about coastal erosion and flood risk The government have determined that all of the ten remaining sites – at Bradwell, Braystones, Hartlepool, Heysham, Hinkley Point, Kirksanton, Oldbury, Sellafield, Sizewell, and Wylfa – are needed; that the IPC should start its examination of DCOs for new nuclear power stations on the basis that need has been demonstrated; and should give this need substantial weight. The IPC are not to consider any of the ten nuclear sites as alternatives to each other. Further, the possibility of more than one reactor at each site is not excluded.

Nuclear promoters will be pleased to note (and the anti-nuclear lobby concerned to learn) that on the controversial issue of storage of long-term radioactive waste, the government is satisfied that effective arrangements will exist to manage and dispose of waste and, as a result, the IPC need not consider this question.

Renewables and fossil fuel

Renewables is expected to provide about 30% of electricity generation by 2020. Renewables embraces onshore and offshore wind and energy from biomass or waste. Surprisingly, it does not extend to tidal or wave energy. Accordingly, as the suite of documents stand, the several tidal barrage schemes proposed around the coast will not benefit from the NPSs.

A role is still envisaged for fossil fuels but in line with climate change goals. Already all new coal and gas fired generating stations above 300MW have to be built carbon capture ready and it is expected that such stations will retrofit carbon capture and storage by 2025. In addition, new coal-fired stations are required to have carbon capture and storage on at least 300MW of proposed capacity. Coal fired stations of less than 300MW should show that they will be able to capture CO2 from their full capacity.

Meeting a national need

The government’s view is that promoters of energy schemes should be permitted to determine the projects to bring forward within the strategic framework set by it. As a consequence, the IPC is not required to consider the relative advantages of one technology over another.

The Overarching NPS declares there to be a significant national need for expansion and reinforcement of the UK’s transmission and distribution networks including extensions into areas which have not previously seen such development. Wherever possible applications for new generating stations and related transmission infrastructure should be contained in a single application to the IPC or in separate applications submitted in tandem, which have been prepared in an integrated way. Where this is not possible, especially where there are different lead times and different legal entities promoting infrastructure, then it may be possible to put in an application which seeks consent for one element only, but contains some information on the other.

In relation to gas infrastructure, the Overarching NPS declares that despite additional gas imports, and gas storage capacity which has already been provided, there is still a need to provide more. One of the reasons for this is the importance of maintaining competition in gas supplies, even though this may lead to ‘redundancy’ in some gas infrastructure. The Overarching NPS declares that there is a significant need for this infrastructure to be provided.

Next steps

The consultation period in respect of these NPSs closes on 22 February 2010. Between now and then the government are holding consultation events, and also local events close to the proposed nuclear sites.

The Act requires the government to lay an NPS before Parliament and to respond to the recommendations of a committee, or resolution, of either House of Parliament. One key issue which now arises is whether the Energy NPSs will be designated in this Parliament.

The latest date that the Prime Minister can choose for the general election is 3 June 2010, but there are suggestions that he may call it earlier - on 6 May, the date of local elections. Usually there is a period of about a month between the Prime Minister’s announcement and the date of the general election, to allow for the election campaign. Parliament is usually formally dissolved a few days after an election announcement.

If the Energy NPSs are to be designated by the present government, there are a significant number of steps which need to be undertaken before early April or early May next year. The Energy and Climate Change Select Committee needs to consider each of the draft NPSs (its consideration of these has now been announced), take into account the submissions made in writing and in oral evidence, and produce a report or make recommendations. Time needs to be made available in Parliament for Ed Miliband’s response and for a debate on the draft NPSs.

The table below sets out these key events and the dates by which these must be achieved. With this in mind, there must be considerable uncertainty whether there is sufficient time for the energy NPSs to be designated before the dissolution of Parliament.

While the Conservatives have said that they will retain NPSs they will undoubtedly want to consider them (and perhaps make changes). In addition, they propose that an NPS is only designated following a majority vote in each House of Parliament. All of this will cause delay and considerable uncertainty for promoters.

The government’s July 2009 Route Map announced that the new system for authorising nationally significant infrastructure projects is to be ‘switched-on’ for energy (and transport) projects on 1 March 2010, irrespective of whether the relevant NPSs have been designated. This puts energy infrastructure promoters at a disadvantage, because at that date they will have no choice but to migrate to the new system but without any ‘presumption’ in favour of their project. Such a situation will also put additional pressures on the IPC (and any DCO timetable it seeks to impose) because it is likely to face calls from objectors to allow additional time to debate policy as everything will be up for discussion before the IPC – an exercise which the new system was precisely designed to avoid. In addition, in the absence of NPSs, the IPC will of course not be taking the decision but making a recommendation to the Secretary of State.

All of this ignores the risk of legal challenge in the courts which a number of third party groups have threatened to do. The next few months will be a nail biting one for the government (and potential promoters) as it endeavours to deliver designation of this suite of Energy NPSs before a general election is announced.

John Qualtrough is a partner at Bircham Dyson Bell. The firm’s ‘Practical Guide to National Infrastructure Projects’ is published by Butterworths and is also available from the firm or by contacting their website at www.bdb-law.co.uk

Countdown to designation in 2010

15 January