Out-Law Analysis 4 min. read
14 Sep 2021, 8:19 am
Proposed changes to UK energy infrastructure planning policy highlight the pivotal role emerging energy technologies are expected to play in ensuring the UK’s changing energy needs are met in future.
Developers behind low carbon hydrogen and nuclear generation in particular will welcome the UK government’s plans to support projects in the years ahead through a planned overhaul of national policy for new energy infrastructure – illustrated in a series of draft policy revisions that will shape development consent for nationally significant energy infrastructure under the Planning Act 2008.
The government’s energy policy is driven by the need to tackle emissions while ensuring security of supply and affordable energy for consumers and businesses. As part of that balancing exercise, draft revisions to its overarching policy statement (EN-1) recognise that the need for widespread electrification of large parts of the UK economy will require an increased use of electricity that is expected to outweigh increases in energy efficiency, potentially leading to a doubling or more of electricity demand by 2050. As a result, the draft revisions to EN-1 support the deployment of new and emerging technologies, including low carbon hydrogen, carbon capture and storage (CCS) and nuclear power.
The need for low carbon hydrogen is deemed as urgent. As expected, EN-1 aligns with the recently launched UK hydrogen strategy where support for both ‘blue’ and ‘green’ hydrogen technologies is confirmed.
EN-1 recognises that low carbon hydrogen could be used for gas blending, as an alternative to electrification, and to replace natural gas providing low carbon “peaking capacity” to maintain security of electricity supply. The government’s policy position goes so far as to state that low carbon hydrogen is “critical” for meeting the UK’s 2050 ‘net zero’ target given the potential for flexible deployment across heat, power and transport, with hydrogen able to break down the “silos” between these networks which EN-1 recognises have traditionally existed.
It is also clear that the UK government is positioning the UK to participate in the international trade of low carbon hydrogen – for example by exporting via pipelines or ships to areas of demand. This aligns with the Scottish government’s ambitions as set out in its hydrogen policy statement last year.
Despite this strong policy support, only limited hydrogen infrastructure – pipelines and underground storage facilities at certain thresholds – are automatically classed as nationally significant infrastructure projects (NSIPs).
If the government is serious about low carbon hydrogen and does not want to rely solely on hydrogen produced from natural gas, then a ramp up of renewables is essential to power hydrogen production plus meet electrification needs
Developers of hydrogen production facilities including electrolysers should consider whether to apply to the Secretary of State for authorisation for the facility to proceed via the Planning Act process and avail themselves of the benefits of that regime alongside this clear policy support and established urgent need at a national level.
Benefits of the Planning Act process also include the ability to wrap up certain other consents and obtain compulsory acquisition powers over land. All of these can be particularly helpful when trying to promote an emerging technology such as low carbon hydrogen, de-risking core aspects of project delivery.
If the government is serious about low carbon hydrogen and does not want to rely solely on hydrogen produced from natural gas, then a ramp up of renewables is essential to power hydrogen production plus meet electrification needs. The UK needs a consistent surplus of renewables and dedicated renewable to hydrogen supply to ensure power is available for electrolysis, and to give confidence to hydrogen producers. Government support for offshore wind and for solar is very clear but we need those projects to be delivered urgently to power the green hydrogen market.
Another key constraint for emerging technologies is funding, and the draft revised national policy statement recognises that the UK government is consulting on hydrogen business models. Coupled with the urgent need established by EN-1, we would expect clarity on funding and business models to drive substantial deployment of low carbon hydrogen in the 2020s.
Nuclear energy is expressly stated as being within the scope of the revised EN-1, and, like with low carbon hydrogen, the need for nuclear generation capacity is described as being urgent. This is essentially the same position as under the existing EN-1, save that in 2011, when that policy was designated, a separate nuclear-specific NPS (EN-6) was published alongside EN-1 to provide enhanced support for, and to set out additional requirements which applied to, applications for nuclear generating stations at specific locations identified in EN-6.
The UK government has not at this point published a revised EN-6 for consultation but has committed to developing and publishing a new technology-specific national policy statement for nuclear energy generation.
Although in some respects it is disappointing that the government has not published a revised EN-6 for consultation, it is perhaps also not surprising given that examination of the development consent order for the Sizewell C plant is ongoing
It is not yet clear when this might be published, or indeed how the government might look to structure a new national policy statement for nuclear energy projects. EN-6 was the only one of the original energy national policy statements which was framed in a site-specific manner and which only had effect in relation to nuclear energy projects that were demonstrably deployable by a specific date – i.e. by 2025.
Although in some respects it is disappointing that the government has not published a revised EN-6 for consultation, it is perhaps also not surprising given that examination of the development consent order for the Sizewell C plant is ongoing. The publication of EN-6 in 2011 had also been preceded by a relatively complex and lengthy strategic siting assessment process whereby sites were nominated for inclusion in the national policy statement and subsequently subject to various environmental and statutory assessments. It will be interesting to see whether the government intends to replicate the same site-specific national policy statement framework for nuclear energy projects deployable after 2025, or whether a more generic national policy statement is instead considered preferable.
It is also not yet clear what is meant by the government’s stated intention to develop a ‘technology-specific’ national policy statement in respect of nuclear generation. EN-6 was not technology-specific, but it is interesting to note in this context that the revised EN-1 now makes express reference to small modular reactors (SMRs), advanced modular reactors (AMRs) and fusion technologies as being covered by the ‘urgent need’ case – something that the original EN-1 does not do. It also references the vital role that such technologies are likely to play in providing additional low carbon capacity in the future.
Any application for SMRs, AMRs and fusion technologies, provided they are over the 50MW threshold, will be able to take the benefit of EN-1 and the established urgent need case. However, there remains potential uncertainty for the nuclear sector until the government clarifies whether a potential new nuclear national policy statement will apply to all over 50MW nuclear developments, or just “big” nuclear, and whether or not it will be site specific.
08 Sep 2021
19 Aug 2021