UK energy: are we doing enough to secure supply? 21Aug2014

UK energy: are we doing enough to secure supply?   

The political unrest in Ukraine, and the prospect of a repeat of the 2009 crisis which saw an interruption of supply to southern Europe has underscored the vulnerability of economies that rely on imported energy. Despite increased deployment of renewable energy generation the EU remains dependent on imports for 53% of the energy that it consumes.

The UK has historically relied upon a plentiful supply of energy from domestic sources. However, as production from the UK continental shelf has declined over the last decade the UK has moved from a net exporter of gas to a net importer. While not as reliant on Ukrainian corridors as other Member States a disruption to EU supply will have an inevitable knock-on effect on the energy markets that the UK is increasingly dependent.

Streamlining the planning process to ease the deployment of much needed new energy infrastructure is high on the political agenda. Central to this aim is the Planning Act 2008 which provides for a frontloaded, streamlined, ‘one stop shop’ for planning, compulsory acquisition and other consents for Nationally Significant Infrastructure Projects (‘NSIP’s’). Applications are examined by the Planning Inspectorate and decided by the Secretary of State.

Guiding the decision making process are a series of technology-specific National Policy Statements (‘NPS’) together with an overarching energy NPS which confirms the Government’s stance that there is a pressing need for new energy infrastructure. To succeed in obtaining development consent for a project applicant’s should ensure that their proposal demonstrates compliance with policies set out in the National Policy Statements.

The NSIP regime achieves its 6 month time limit on the examination of applications by requiring applicants to consult early, meaningfully and widely on their proposals before submitting an application.

A major criticism of the regime is its inflexibility. For example, where a developer, having obtained development consent starts construction of new energy infrastructure only to discover that design changes are needed to accommodate the project (e.g. a higher chimney stack or a different pipe-line route etc.). While an application can be prepared with a degree of flexibility built-in; it is difficult to cater for all contingencies.

The prospect of repeating the full and wide ranging pre-application consultation and examination process is unappealing to developers and may be received with, at most, lukewarm disinterest by communities who have already been consulted on the proposal.

The Infrastructure Bill proposes to give the Secretary of State a discretion to modify consultation requirements to allow for more proportionate consultation for applications to modify a development consent.

The government have also stated they will publish guidance to assist applicants in understanding what changes are likely to be considered “material” or “non-material”. While both can be accommodated the Bill currently being debated makes it clear that this is not a panacea. The Secretary of State would retain a discretion to refuse an application for a modification of a DCO where he considers it should properly be the subject of a full DCO application.

So will these changes secure our energy supply in these uncertain times? While clearly of modest scale it is encouraging that the coalition government continue to look to improve the practicalities of the NSIP planning regime. Greater certainty on the flexibility of development consent can only serve to reassure those investing in the UK’s energy infrastructure.

Zyda Law will be hosting a panel discussion at The Energy Event at the Birmingham NEC on 16th September where we will be joined by industry experts to discuss the practicalities of delivering the next generation of UK energy infrastructure.