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Memorandum submitted by the National Grid (NPS 23)
1 National Grid is pleased to have this opportunity to contribute to the Committee's inquiry into the proposals for energy National Policy Statements (NPSs). We strongly support the changes to the planning system that were introduced by the Planning Act 2008 (the "Act") and believe that the establishment of a single consenting regime will streamline the planning system to provide greater certainty, efficiency and consistency for all whilst ensuring the timeliness and quality of decision-making, including appropriate community and stakeholder involvement, is improved.
2 Full, effective and judicious implementation of the fundamental reforms within the Act will be crucial to the timely delivery of the energy infrastructure investment programme needed to ensure continued security of energy supply and the creation of a low-carbon economy. A vital component of this implementation is designation of the suite of energy NPSs to provide a coherent and practical framework within which future planning applications for energy infrastructure can be judged, following pre-application consultation with stakeholders and communities as required by the Act.
3 The NPSs, as drafted, provide an excellent primary basis for the Infrastructure Planning Commission's (IPC's) decision making process. In particular National Grid welcomes:
(r) A stable policy framework, which clearly sets out the Government's energy strategy and priorities (r) Recognition of the extent to which our quality of life is dependent on secure and adequate energy supplies (r) Clear demonstration of the urgent need for a wide variety of new energy infrastructure to ensure continued security of supply and the creation of a low-carbon economy (r) Robust and sufficiently-detailed assessment principles, generic / technology-specific impacts and information on appropriate mitigation measures which provide specific, unambiguous direction to the IPC and all stakeholders involved, or interested, in an application. Together with the policy framework, this detail will enable consistent and efficient assessment of applications against national policy issues, thereby negating the need for extended debate on such issues at hearing or inquiry stage (r) Recognition of the need for flexibility in the IPC's ability to consider related nationally significant infrastructure projects (NSIPs) as linked proposals, via joint applications, or as separate projects in their own right
4 National Grid therefore very much welcomes the tenor of these draft energy NPSs as the primary basis for decisions by the IPC. There are some areas of specific detail where we believe further work is required prior to the designation of the NPSs. These areas will be expanded on in our more detailed response to the Department of Energy and Climate Change's consultation.
Introduction to National Grid
5 National Grid is an international electricity and gas company and one of the largest investor-owned energy companies in the world. We play a vital role in delivering gas and electricity to many millions of people across Great Britain in an efficient, reliable and safe manner.
6 Through regulated subsidiary companies, National Grid owns the electricity transmission network in England and Wales, operates the electricity transmission system throughout Great Britain, owns and operates the gas transmission network throughout Great Britain and four of the eight gas distribution networks delivering gas to some 11 million homes and businesses.
7 Our primary duties are to operate, maintain and develop our networks in an economic, efficient and co-ordinated way and to facilitate competition in the supply and generation of electricity and in the supply of gas respectively. Our licences require us to provide connection to and use of our transmission and distribution networks in a non-discriminatory and transparent way.
8 As an electricity transmission system licence holder National Grid also has a duty placed on it under Section 38 and Schedule 9 of the Electricity Act 1989 relating to the preservation of amenity. How National Grid meets this duty is set out in 'National Grid's commitments when undertaking works in the UK: Our stakeholder community and amenity policy'[1]. This statement, which is applicable to works on both our electricity transmission system and gas system (above 7 bar in pressure), also incorporates commitments to stakeholder and community engagement.
9 Through regulated and non-regulated subsidiaries, National Grid also owns and maintains around 20 million domestic and commercial meters, the electricity interconnector between Great Britain and France, a Liquefied Natural Gas (LNG) importation terminal at the Isle of Grain and the short range LNG gas storage facilities in Great Britain. National Grid also has a carbon dioxide transportation subsidiary (National Grid Carbon) which is developing infrastructure for the deployment of Carbon Capture and Storage (CCS) as a key enabler for the transition to a low carbon economy.
National Grid and planning reform
10 Given the changing face of energy markets, the commitment to address climate change and the age of National Grid's transmission assets we need to undertake a substantial amount of new energy infrastructure investment and development. We are therefore a major 'consumer' of the planning and consents regime as far as it relates to NSIPs.
11 Prior to the Act, the consents regime for projects such as National Grid's was too complex, too lengthy, too costly; it created uncertainty for communities, business and developers; and it failed to take account of the national need for new infrastructure. A combination of these factors made it difficult for communities to engage properly in the process.
12 We strongly support the changes to the planning system that were introduced by the Act. We believe that the establishment of a single consenting regime, with the IPC as a single independent decision-making body, will streamline the planning system to provide greater certainty, efficiency and consistency for all whilst ensuring the timeliness and quality of decision-making, including appropriate community and stakeholder involvement, is improved.
13 Alongside the Act and the suite of secondary legislation and guidance that has followed, the development and designation of effective NPSs which give a clear framework for decision making, are vital components of realising the benefits of the reformed regime.
National Policy Statements Structure and content overview
14 As they will be the primary consideration for the IPC in determining applications for NSIPs, the structure and content of NPSs are key to ensuring the success of the reforms.
15 National Grid welcomes the draft energy NPSs, which we recognise have been developed in conjunction, and consistent, with relevant Government policy. These clear national statements of policy in relation to energy, its generation and its transportation provide important guidance to promoters of NSIPs, local authorities, statutory consultees and those communities potentially affected by proposals. They are also crucial in clarifying a number of issues, such as need for the infrastructure, which hitherto have been revisited at public inquiries. The absence of such clear guidance in an NPS could lead to continued debate at each stage of the consents process, which would negate the benefit of providing such statements.
16 National Grid agrees that there should be a presumption in favour of developments that applicants demonstrate accord with the relevant NPSs. The IPC will, of course, take account of relevant local factors (including adverse local consequences of a development). However, given the national importance of significant energy projects and provided that a developer can prove that they have minimised, mitigated and / or compensated for (as appropriate) local adverse impacts we strongly support the importance and weight that is attached to the NPSs in IPC decision-making. We also believe that the provisions noted in paragraphs 1.1.2 and 4.1.1(v) of the overarching NPS provide an appropriate balance in this regard.
Assessment principles, impacts and mitigation
17 Whilst NPSs should not be overly prescriptive, their value (ability to clarify policy and process and therefore mitigate delay) is dependent upon the level of detailed information they include. National Grid welcomes the inclusion, within the overarching NPS for energy, and supplemented where necessary by the technology specific information in the other energy NPSs, of details regarding key principles to be followed in the consideration and examination of applications including information concerning:
(r) Potential impacts associated with energy infrastructure construction and operation (r) The environmental information that the applicant is required to include in the Environmental Statement or application (r) The factors (on an impact-by-impact basis) that the IPC will consider in its decision making (r) The mitigation measures that could be used to offset or eliminate adverse impacts
18 Although we recognise that the NPSs do not provide a comprehensive list of all possible effects, and that there may be other impacts which the IPC will wish to consider on a project by project basis, it is helpful for the NPSs to be as comprehensive as possible in order to maintain clarity and consistency.
Need for New Energy Infrastructure - Overview
19 It is widely recognised that the UK is coming out of a period of "energy plenty", with the decline of North Sea gas supplies and many existing power stations reaching the end of their lives. Over one third of the UK's generation needs replacing in the next 15 to 20 years and within a decade 80% of the UK's gas will need to be imported if the Government's objective of maintaining the current levels of security of energy supply is to be met. In order to achieve this, network capacity issues, although significant, cannot be considered in isolation. Other important criteria include:
(r) Diversity - It needs to be ensured that there is not over-dependence on a certain fuel type for electricity generation or on a single gas supply source or transportation route; (r) Reliability - Historically the UK electricity transmission system has operated with reliability of almost 100%. In order to maintain this record it is crucial to respond to demand growth, provide new connections and replace ageing assets; (r) Market signals - The networks need to be able to continue to respond to market signals for investment to provide fit-for-purpose networks for the future. Efficient, open, transparent and competitive energy markets are important as they provide fair access to energy supplies, foster sufficient and timely investment through the energy supply chain and deliver diverse, reliable supplies at competitive prices.
20 Equally, the Government's commitment to mitigating climate change anticipates wide-scale connection to the electricity transmission network of new low-carbon generation, such as large-scale onshore and offshore wind farms, new nuclear power stations, fossil fuel power stations with carbon capture and storage, and distributed and micro generation. Such changes in the type and source of primary energy resources will bring about significant change in the gas and electricity markets going forward and require a multi-billion pound investment programme. This will encompass small and large-scale electricity generation, new gas terminals and substantial investment in the UK's energy and carbon networks to replace and upgrade ageing assets and construct new infrastructure to connect and efficiently deliver new and existing energy sources, as well as maintaining the levels of safety and reliability to which everyone has become accustomed. This must all be undertaken in a way that takes account of the views of communities and respects precious landscapes and environments.
21 Affordability of energy supplies also forms one of the Government's fundamental energy policy objectives, and the deliverability of much of the needed energy infrastructure will help ensure that energy prices do not increase due to demand outstripping supply (although other worldwide factors may still have an impact on prices).
22 National Grid therefore strongly supports the Government's conclusion "that there is a significant need for new major energy infrastructure which will have to be met by projects coming through quickly"[2]. The overarching energy NPS sets out the need-case for each generation technology and energy transportation network in turn. Most essentially, these statements of need allow the IPC to start its assessment of applications for relevant NSIPs on the basis that need has been demonstrated. Importantly, this will enable the timely assessment of the application specifics by the IPC, bypassing potential lengthy delays caused by repetitive debates over whether or not such infrastructure is required.
Need for New Energy Infrastructure - Specific comments
23 National Grid strongly supports the stated need-case for new electricity generation capacity alongside the expansion and reinforcement of the UK's electricity transmission network. The supporting information, including supply and demand projections and required transmission reinforcements, are consistent with our current analysis.
24 National Grid also supports the assertion that the IPC should start its assessment of applications for supply, storage and transmission of gas from the basis that there is a significant need for this infrastructure to be provided. Indeed, our latest analysis indicates that the 'need' for new gas infrastructure is much stronger than the case currently presented in the NPS. For example 3.9.3 of the draft overarching energy NPS states that 'net gas imports are forecast to remain broadly constant during the next decade' whereas our current projections indicate that gas imports will nearly double between now and 2020.
25 In addition to the existing need cases in the draft NPS, National Grid proposes the insertion of an explicit reference to the need for independently provided carbon dioxide transportation and storage infrastructure. New carbon dioxide transport and storage infrastructure will be needed to support the mandated deployment of the Carbon Capture and Storage (CCS) chain, taking captured carbon dioxide away from fossil fuel power stations and industrial emitters and transporting it for permanent storage underground, including on a shared use or common carriage basis.
Need for flexibility in considering grid connection
26 National Grid recognises that the Act aims to create a holistic planning regime. Wherever possible and appropriate, National Grid will work with promoters of related energy infrastructure projects (usually our customers whom we are seeking to connect such as generators, gas importers, gas storage operators, distribution companies and carbon emitters) to ensure, as far as reasonably practicable, the co-ordination of development consent applications under the Act, such that they can be considered as linked proposals by the IPC. However we strongly welcome the recognition in 4.9.2 of the draft overarching NPS and 2.3.2 of the draft NPS for electricity networks infrastructure, that in some cases, the synchronisation of IPC considerations may have an adverse impact on the delivery of climate change or security of supply objectives. We acknowledge that when such cases arise there is a requirement, covered in the relevant NPSs, for applicants to explain the reasons for separate applications.
Conclusion
27 Full, effective and judicious implementation of the fundamental reforms within the Act will be crucial to the timely delivery of the necessary investment programme to ensure continued security of energy supply and the creation of a low-carbon economy. A vital component of this implementation is the designation of the suite of energy NPSs.
28 National Grid very much supports the tenor of these draft energy NPSs and believes that they provide a coherent and practical framework within which the IPC can assess future planning applications for nationally significant energy infrastructure. In particular we welcome:
(r) A stable policy framework, which clearly sets out the Government's energy strategy and priorities (r) Recognition of the extent to which our quality of life is dependent upon secure and adequate energy supplies (r) Clear demonstration of the urgent need for a wide variety of new energy infrastructure to ensure continued security of supply and the creation of a low-carbon economy (r) Robust and sufficiently-detailed assessment principles, generic / technology-specific impacts and information on appropriate mitigation measures which provide specific, unambiguous direction to the IPC and all stakeholders involved, or interested, in an application. Together with the policy framework this detail will enable consistent and efficient assessment of applications against national policy issues, thereby negating the need for extended debate on such issues at hearing or inquiry stage (r) Recognition of the need for flexibility in the IPC's ability to consider related NSIPs as linked proposals, via joint applications, or as separate projects in their own right
29 There are some areas of specific detail where we believe further work is required prior to the designation of the NPSs. These areas will be expanded on in our more detailed response to the Department of Energy and Climate Change's consultation.
January 2010
[1] Final document to be published by the end of February 2010 at: http://www.nationalgrid.com/uk/LandandDevelopment/SC/Responsibilities/
[2] Draft Overarching National Policy Statement for Energy (EN-1) page 14 |