The Spectator by Sam Dumitriu
The Office for Budget Responsibility estimates that the government will spend (read: borrow) £43 billion this year to keep the average household’s energy bill at £2,500. Without the Energy Price Guarantee, bills would have hit an eye-watering £4,279 in January. It is certainly true that the blame for this bleak state of affairs should fall squarely at the feet of Vladimir Putin. Yet, it is also true that our energy bills would be much more manageable if Britain had built the necessary energy infrastructure over the past decades. So why haven’t we?
First, some context. Since 2008, England and Wales have used a separate planning system for major infrastructure projects. Developers bypass local planning authorities and submit their applications directly to the government’s Planning Inspectorate, which then assesses whether or not the proposed project is in line with national policy. The Secretary of State responsible for energy, which is now Grant Shapps, then gives the final sign-off.
In theory, this should have speeded things up when it came to building new infrastructure – and in some cases it has. The system before 2008 was objectively worse. Projects like Heathrow’s Terminal 5 took eight years to approve and involved a four-year public inquiry, costing taxpayers £18 million (and Heathrow much more).
Yet the effectiveness of this regime is clearly on the wane. A key reason is the failure of politicians to publish up-to-date National Policy Statements (NPSs), which set out the government’s policy objectives, for energy. In theory, these should be updated every five years, but it has been 11 years since a NPS for energy was last updated, leading to massive policy uncertainty.
This uncertainty means that what is and isn’t national policy has become increasingly vague and up for debate. And so infrastructure developers have been forced to gold-plate their applications to make sure they aren’t rejected by the Planning Inspectorate for not being in line with national policy.
The impact of this can clearly be seen in the data. In the heady days of 2012, a typical planning application for a major infrastructure project would contain 381 documents. Just eight years later, the document count went up to 1,143.
The problem can also be seen in the sheer amount of environmental documentation that developers are being forced to provide to make sure their applications are approved. Environmental impact assessments and statements for major wind projects now regularly stretch to 10,000 plus pages.
You can see the problem by looking at two similar nuclear projects, only a few years apart. The 2011 application for Hinkley Point C contained 1,001 documents. By contrast, Sizewell C’s 2020 application contained over 4,000. Sizewell C’s environmental statement stretches to over 40,000 pages too, a 30 per cent increase on Hinkley Point C’s.
As the paperwork has piled up around the country, the approvals process has slowed down. In theory, applicants for a new infrastructure project should get a decision from the government in around 18 months. And indeed, an infrastructure planning application lodged in 2012 would typically receive a decision in 17 months. But by 2020 the average wait had risen to 22 months. Almost half (42 per cent) of all major infrastructure planning decisions have been delayed since 2017.
One project, the Norfolk Vanguard Offshore Wind Farm, had to wait over three years (44 months to be precise) for a decision. In this case the delay was caused by a legal challenge, which led to the project being overturned, before the wind farm was finally given planning permission. And more projects than ever before are being challenged successfully in the courts because official policy is unclear. Between 2010 and 2020, there were 16 legal challenges to major infrastructure planning decisions. Only one was successful – overturning a refusal for a gas storage project. But in the last two years alone, there have been seven legal challenges to major infrastructure projects and four have been successful.
The impact of this has been disastrous for us as a country. Our failure to approve new infrastructure quickly has left us dependent on dirty, expensive imported energy, strengthening the position of the world’s dictators in the process. And this has not only meant higher bills and more carbon emissions, but also risks squandering an opportunity to revitalise Britain’s industrial heartlands. It is hard, for example, to find a better example of levelling up in action than the £400 million South Korea’s SeAH Steel Holdings are putting into a new factory in Teesside’s freeport to manufacture the foundations for offshore wind turbines. Yet if the planning system continues to throw up hurdles to new energy infrastructure, these new industries will be built elsewhere.
Last month’s Autumn Statement saw Jeremy Hunt commit to updating the government’s national policy statements for energy and transport next year. It’s a good, if long overdue, start. But to kick our dependency on foreign gas we will need to go even further – for example, by lifting the ban on onshore wind farms being built around the country.
The European Union is currently discussing suspending Environmental Impact Assessments altogether for new renewable projects in so-called ‘go-to zones’. This kind of policy could work well in Britain. A YouGov poll commissioned by Britain Remade found just 11 per cent of the public opposed granting fast-track planning permission to new renewable projects in ‘Clean Energy Zones.’ As a Brexiteer, Rishi Sunak may be reluctant to consider stealing an idea from Brussels, but it’d be good politics as well as good policy if he followed their lead. For the sake of the country, Britain needs to start building again.