Localism Bill

Memorandum submitted by E.ON (L 54)

E.ON is one of the UK’s leading power and gas companies. Our generation business produces enough electricity to cater for the needs of around eight million homes through a portfolio of gas-, coal- and oil-fired power stations, onshore and offshore wind farms, and biomass power stations. We continue to invest in the UK’s energy infrastructure, spending an average of £846m each year since 2002. This includes commissioning one of the world’s most efficient power stations at the Isle of Grain in Kent and our involvement in the construction of the world’s largest offshore wind farm, London Array which is situated in the Thames Estuary.

We also believe that our customers will have an important part to play in the energy mix of the future. We are working hard to get our customers Energy Fit – this means providing them with the information and tools to help them insulate their homes, moderate their energy consumption and, where appropriate, generate their own energy. Our Sustainable Energy business is an expert in providing low carbon energy solutions to the public and private sector. Since 2009, we have installed 2000 ground source heat pumps, installed low carbon LED lights as part of our PFI street lighting projects and signed up community energy schemes that will provide 10,000 homes with heat for hot water and space heating through decentralised energy schemes.

We welcome the aspirations of the Localism Bill but seek clarification and reassurance in some aspects that increased community empowerment will not unnecessarily delay the investment in the UK’s energy infrastructure required, and that local authorities will have adequate resources to make the most of this opportunity to drive forward local sustainable development. With this in mind, the Localism Bill must:

· Establish a planning system which is reliable, effective and fair, for all sizes of planning application

· Make the UK an attractive market for developers

· Support the £200bn investment required in the UK’s energy infrastructure by 2020

· Make it easy for local communities to consider the energy needs of their area, and to work with experts to bring forward the schemes required

· Ensure that local authorities are able to effectively respond to energy and sustainable development needs, and work closely with neighbouring areas to see greatest benefit

We include a summary of our specific concerns as an appendix to this briefing paper.

Decentralising power – in more ways than one!

The UK has a number of challenges to overcome in order to ensure that we have reliable, low carbon energy at an affordable price. Providing developers with a planning regime that is effective and fair to all is one of the key challenges. Developers need to have the confidence to invest in all forms of energy infrastructure, at all scales, and the Localism Bill must deliver a planning system that can bring forward the investment required to meet the UK’s climate change targets and long-term energy security needs.

Case study

In recent years we have had varying experiences of the planning system. Our Camster onshore wind farm took over 4 years to determine, however permission for our Butterwick Moor onshore wind farm was given in under 12 months. For a global company with diverse investment opportunities, this uncertainty can make the UK an unattractive market in which to invest. The Localism Bill must change this.

As well as ensuring that much-needed Nationally Significant Infrastructure Projects (NSIPs) and other large infrastructure developments are built, the Localism Bill also has the potential to change the relationship that individuals, local communities and local authorities have with energy. We need a radical transformation in the way that energy is generated in the UK. As well as low carbon generation such as wind farms and new nuclear power stations, and the replacement of many conventional power stations and network infrastructure, which will need local support, we will also see an increase in the amount of decentralised energy in the UK.

The Feed in Tariff and the Renewable Heat Incentive now provide the financial incentive for micro and small-scale generation. The Localism Bill is a real opportunity to put in place the appropriate governance and engagement structures to drive a step-change in how individuals and local communities think about their energy needs.

Case study

E.ON signed an energy partnership with Stoke-on-Trent City Council. Already the partnership has led to a CESP-funded whole house energy efficiency scheme which will benefit 240 families, a separate programme to supply and fit solar panels for 54 homes and a research programme looking at the best way to provide low carbon heat to three of Stoke’s tower blocks. In the future, we also plan to look at an electric vehicle charging network for the city, as well as the potential for a large scale, CHP-based district heating system.

A social enterprise was established to represent both the Local Authority and the community interests in the partnership and will share information and training with the local supply chain and small businesses. By sharing our energy expertise and working closely with the local community in this way, we believe we can develop and deliver low carbon solutions that meet the specific needs of the area. The Localism Bill can facilitate these types of partnerships in the future by providing a formal framework for communities to participate in planning decisions.

Community empowerment

If we are to meet the UK’s carbon reduction targets, communities will need to be more closely involved in the development of our new energy infrastructure, however it will be important that local decisions support priorities for energy infrastructure as set out in the National Policy Statements. We believe that the National Policy Statements should be a material consideration at all levels of the planning process, and that this should be made explicit in the Bill.

To date, many energy projects, in particular onshore wind farms, are met with vocal opposition from relatively small groups within the community. In some cases local referenda (part 4, chapter 1) may provide a voice for the often "silent majority" who support the local and/or national benefits of a particular scheme, however it will be important to ensure that there is not duplication with the planning process which already provides a clear route for interested parties to share their views on a particular proposal. We would not wish to see duplication of consultation in the planning system and so would like to see guidance on the intended purpose of local referenda.

It will also be important to make sure that a referendum does not unnecessarily delay a planning application. We would therefore like to see the time period for holding a referendum reduced from 12 months to 16 weeks. Furthermore, ministerial clarification of the term ‘local’ in this context would be helpful to ensure that referenda are used appropriately – collating views of those genuinely impacted.

We welcome proposals to give local communities more powers to shape the infrastructure and services in the area where they live. The introduction of Neighbourhood Planning (Part 5, Chapter 3) will allow communities to give preference to schemes that respond to local needs. From our perspective, this could include district heating or community-scale generation. The Neighbourhood Forums that designate these plans should be encouraged to draw on the expertise of external bodies, and should have clear operating frameworks to make sure that neighbourhood plans are realistic and achievable, and reflect development in other communities and at a national level.

Whilst we fully encourage increased community involvement in the planning process for energy infrastructure, and would like to see more communities take responsibility for generating their own energy, we would be concerned if community empowerment elements of the Bill are used to frustrate proposed energy developments that are clearly in the strategic national interest. The powers to designate land as "assets of community value" (Part 4, Chapter 3) could be misused in this way and we would like to see a restriction on new designations, once the pre-application period of any proposal has begun.

We are also concerned that local authorities and elected members may be placed on considerable political pressure to designate certain assets as being of community value. We would therefore like to see the procedure for nominating assets of community value being managed by an independent body, who would also be provided with clear guidance on the definition of "community value".

Strengthening local democracy

Localism places significant responsibility on the shoulders of local government. Within the energy sector we need to see a £200bn investment programme well advanced by 2020. Local authorities will have a big role to play in making this happen and must therefore have sufficient resources and the right framework to make sure this is possible. We have recently seen an increase in Planning Performance Agreements (PPAs) with local authorities – an agreement that the local authority will follow an agreed timetable for a planning decision, at a cost to the developer. Whilst PPAs have their place for certain developments, this should not become the norm and developers should be confident that determinations can be made within a reasonable timeframe, outside of a PPA. The Government’s consultation on changes to planning application fees in England explored this in detail but we would like to be reassured that proposals for charging under the General Powers of Competence (Part 1, Chapter 1) will not to lead to increased charges for essential parts of the planning process.

We agree that local councillors should be able to fully participate in debate around all local issues and we welcome the clarification around predetermination (part 1, chapter 4). We have experienced difficulties to date where councillors have been reluctant to discuss aspects of onshore wind developments because of nervousness of being considered biased. We hope that these provisions will allow elected members to hear views from all groups interested in particular proposals, in a balanced and transparent way, that leads to informed decision making.

We welcome the introduction of a duty to co-operate in relation to planning of sustainable development (Part 5, Chapter 1). This will be critical in the absence of Regional Spatial Strategies as local authorities will be able to work across local authority boundaries to maximise the effectiveness of sustainable development. This could for example include the sharing of a supply chain for biomass stations, or the waste heat from a conventional power station. Given the importance of this, it is imperative that we would like to see Part 5, Chapter 1, Clause 90 strengthened to require sustainable development plans to be developed jointly, rather than just requiring cooperation.

Planning

The planning system has long been recognised as a major barrier to the timely delivery of energy infrastructure in the UK. We are grateful for the time that the Government has taken to understand the requirements of investors and are pleased that the Major Infrastructure Planning Unit (MIPU) will provide clear timescales for those submitting applications. We also strongly welcome the decision for the Secretary of State for Energy and Climate Change to determine major energy projects. We also welcome proposals to rationalise the planning system for schemes below 50MW through a National Planning Policy Framework (NPPF). Schemes of this size will make a significant contribution to meeting the UK’s renewable energy targets and so it is important that the NPPF brings together in a robust and coherent manner all the Planning Policy Statements, with the National Planning Statements at the heart of this. In order to ensure consistency, we would believe that this intention should also be included in the Localism Bill.

It should be noted that there still remains some uncertainty as to what is expected under the pre-application process and community consultation process for Nationally Significant Infrastructure Projects. We would welcome continued support from officials to ensure that we do not ‘gold-plate’ this process to the extent that project economics are affected. This will be equally important for smaller energy developments. The introduction of a requirement for pre-application consultation for Town and Country Planning Act applications (Part 5, Chapter 4), below 50MW for energy, must be proportionate to the size of the development so that small community or agricultural schemes are not curtailed by an overly onerous consultation process. We estimate that a full public consultation process for a 50MW onshore wind farm currently adds £250,000 to the cost of developing the scheme, and that this cost would not be substantially reduced for smaller schemes with lower revenues. Public consultation is a vital part of the planning process and we are proud of the lengths to which we go to incorporate the views of the local community into our applications. We would like to be able to retain the flexibility to carry out pre-application consultations which we believe best reflect the scale, nature and location of the proposal and would therefore like to see proportionality to be a key test for pre-application consultation.

As a responsible developer we already carry out a detail community consultation and information programmes, however we would be concerned if placing this on a statutory footing would introduce delays into the planning process. We would therefore like to see local planning authorities being required to provide their response to pre-application consultation with a reasonable time frame and a system of "deemed non-objection" for statutory consultees who fail to respond to applications within a specified time.

Issue and clause

Concern

Proposal

Referenda

Part 4, Chapter 1

Local referenda could introduce unnecessary delays in the planning process, creating uncertainty for investors. The proposed 6 months to collect signatures and 12 months to organise the referenda would lead to significant delays

Referenda should run concurrently with the planning process and should be completed within the 16 week window for determination. We believe that a period of 3 months is sufficient to collect signatures.

Referenda

Part 4, Chapter 1

Petition threshold for referenda is too low to be fairly representative which is key to providing a clear view of community opinion on an issue.

The threshold should be raised to 12.5% to ensure that the right to hold referenda is used appropriately. Local authorities should not be able to override this principle.

Assets of Community Value

Part 4, Chapter 3

Concern that campaign groups may seek to designate ‘community assets’ specifically to frustrate planning applications, rather than to truly reflect community interest.

So that developers have a full picture of the area relating to planning application, designation of community assets would be restricted in relation to a particular site, once the pre-application period for a proposal has begun.

Assets of Community Value

Part 4, Chapter 3

Concern that delays could be introduced into the planning system whilst communities decide whether they wish to purchase assets listed as being of community value.

We seek clarification on the length of the moratorium period and believe that this should not be longer than 12 weeks.

Assets of Community Value

Part 4, Chapter 3

The process of designating assets of community value should not be influenced by local political pressures.

We would like to see clear guidance on the definition of "community value" and how the power is intended to be used. Assets of community value should be designated by an independent assessor.

Plans and strategies

Part 5, Chapter 1

It is vital that the local planning system takes in to consideration national energy priorities when it considers planning applications; however the Localism Bill effectively removes this requirement.

We understand that the National Planning Policy Framework (NPPF) will reintroduce this consideration however we believe that the principles of the NPPF should be included in the Localism Bill, given that this will have a strong influence on the decisions taken by local authorities.

Duty to cooperate

Part 5, Chapter 1

Local authorities should be encouraged to work across local government borders to take full advantage of the resources within an area and to develop fully integrated development plans as they relate to sustainable development.

There should be a clearer requirement for local authorities to work together and so we would like the ‘duty to cooperate’ to be replaced with a ‘duty to plan jointly’. It should also be clear as to what outputs are expected.

Pre-application consultation

Part 5, Chapter 4

The introduction of a requirement for pre-application consultation for Town and Country Planning Act applications below 50MW for energy must be proportionate to the size of the development so that small schemes are not curtailed by an overly onerous consultation process.

We would like the pre-application process to be flexible to allow developers to consult in a manner which reflects the scale, nature and location of any scheme. Guidance on the pre-application consultation process should make proportionality a key test.

Pre-application consultation

Part 5, Chapter 4

Delays in response to consultations can have significant impacts on developments, particularly if significant concerns are raised late in the process.

We would like to see the introduction of a system of "deemed non-objection" for statutory consultees who fail to respond to applications within the specified time period.

Neighbourhood Development Plans

Schedule 9, Part 2

Neighbourhood Development Plans should be specifically required to support national priorities in relation to energy infrastructure.

The Secretary of State must be given the power to ensure that national energy priorities are considered.

(Schedule 9, Part 2, 38B (3))

Neighbourhood Development Orders

Schedule 10

Regulations governing Neighbourhood Development Orders should specifically require Neighbourhood Development Orders to support national priorities in relation to energy infrastructure.

Regulations relating to Neighbourhood Development Orders must be able to make provisions to reflect national priorities.

(Schedule 10, Part 4)

February 2011