AUTHOR

Alastair Macdonald
Alastair Macdonald
UK Energy Lead for Environment

Decisions to grant Development Consent Orders for new energy generating facilities in the UK are guided by National Policy Statement (NPS) documents. These are frameworks that guide decision makers when assessing planning applications of national significance. They are also a key tool for Government in shaping the planning landscape and ensuring that strategic objectives are delivered through investment. This makes them important documents that, when done right, have major impacts on dictating the design and operation of major infrastructure projects. But what are these strategic objectives, and is the Energy NPS fit for purpose?

If the Government is serious about its commitment to reach Net Zero by 2050 then rapid decarbonisation of the energy sector is an essential part of this. But - as our recent Supercharging Net Zero report found - it is a race we are currently losing. Our research showed that the UK will need to further accelerate its ambitious energy decarbonisation targets. Key to this will be ramping up the development of green infrastructure development, increasing investment in renewables, and accelerating technologies like carbon capture and storage.

So, we can see how important it is for the UK to have up-to-date planning frameworks that take this need for rapid energy transition into account. The release of the draft Energy NPS late last year sought to address this, with an overarching plan to update energy generation planning guidelines for a low-carbon era.


Bringing Energy National Policy up to date

The overarching NPS for energy (NPS EN-1) was published in July 2011 and, by the time the latest draft is finalised, it will have been in place for more than a decade. The landscape has shifted dramatically since then and, if the next iteration is to remain a relevant and effective document for a similar period of time, it needs to set a long-term agenda.

The latest draft does go a very long way towards bringing policy up to date. Particularly welcome is the addition of a new section on greenhouse gas emissions and requirements for whole life and embodied carbon assessments. However, questions remain about whether they go far enough to provide the tough planning guidance that will be needed.

For example, global electricity demand is only projected to increase, and embodied carbon will be a key issue over the coming decades. Environmental Impact Assessment (EIA) legislation now includes the requirement to consider climate change. A simple but explicit statement in the Energy NPS that embodied carbon emissions will be assessed on a project-specific basis would therefore further reinforce action already being undertaken by the industry. Such a statement would anticipate the direction of travel in connection with capital carbon planning, but so far this has been omitted.


Alignment with the Environment Act

Perhaps the biggest concern is the lack of coordination between the draft NPS and the Environment Act, which came into force in November 2021. It would make sense for these two documents, which have such an important shared purpose, to be joined at the hip. Yet the draft Energy NPS, which was issued for consultation shortly before the Environment Act became law, contains over 100 references to specific pieces of legislation, but only two references to the Environment Bill.

One of the most widely hailed aspects of the Environment Bill was the enshrining of Environmental Principles in law to guide future policy making. However, the section on Environmental Principles in the NPS is largely a re-hash of existing EIA requirements, and doesn’t discuss ‘principles’ at all. The Energy NPS should have been an early opportunity for the Government to demonstrate its commitment to embedding the Environmental Principles in policy. Based on this evidence, a lot of work is needed.

Similarly, flexible guidance on addressing biodiversity and net gain is missing. While such requirements will always be difficult to meet, the NPS should still make greater reference to the Environment Act and the statutory requirements for delivery of biodiversity net-gain. This would help the Secretary of State better balance the benefits of a decision against the costs when assessing applications.


Timing of the new Energy National Policy

There are real concerns that the timing of the document presents some fundamental challenges to its usefulness as a guide for the next 10 years. For example, there are questions about how the Energy NPS will align with the Government’s Project Speed reforms.

The effective implementation of an imperfect NPS requires a reliance on other parts of the planning process remaining in place and consistent, in particular methodologies for Environmental Impact Assessments. These play an important role in assessing local impacts, but the processes associated with them are expected to be simplified under Project Speed. While both Project Speed and the Energy NPS can - and will - exist in isolation, this still raises the potential for ongoing uncertainty and the risk that planning applications could be impacted by shifting goalposts throughout the lifetime of the NPS.

Obviously planning policy is always in flux and changes are to be expected - and indeed encouraged - over the lifetime of any framework. However, flexibility will be vital to ensure important protections are not inadvertently weakened.


What next for Energy National Policy?

These issues are to be expected in any draft policy document and that is why consultations are necessary. However, there are wider questions raised here about the way in which ambitious government policy is incorporated into the reality of infrastructure planning and delivery.

It’s right that we have overarching frameworks that offer guidance on government priorities. But when these priorities are shifting so rapidly, as they are likely to for the foreseeable future, there is a strong argument for a more radical change in how policy statements are developed.

There are references in the latest draft to material first published in 2005 and a significant proportion of material elsewhere is based on existing policy, data or provisions. Should NPS documents be based on the idea that what already exists is fit for purpose? Or is a new approach needed? In my view, we need a greater focus on policy frameworks that provide certainty over what the rules are, but at the same time offer flexibility in terms of how developers can go about meeting those requirements.

National planning policy needs to be responsive to changing priorities, particularly in dynamic areas associated with climate change and environmental concerns. The development of backward-looking guidance based on legacy material increases the risk that proposals will be developed using inappropriate criteria that are open to challenge. Given the urgency of getting new, clean infrastructure from the planning stage to construction, ensuring that planning policy provides certainty has never been more important. More work is needed.

AUTHOR

Alastair Macdonald
Alastair Macdonald
UK Energy Lead for Environment