The revised draft National Policy Statements on energy - Energy and Climate Change Contents

6  Conclusion

106. The suite of six National Policy Statements on energy provides an important new tier in the planning process at a time when the need for investment in new nationally significant infrastructure projects is acute. We welcome the improvements made in the revised draft NPSs, where the Government has accepted our predecessor Committee's recommendations. It has, however, rejected a number of important recommendations regarding need, spatial planning and decarbonisation. The changes introduced in the Localism Bill have raised several new issues, which we have considered in this report.

107. The energy NPSs are intended to contribute toward energy security and climate change mitigation by expediting significant investments in new energy infrastructure. However, we believe that they do not place enough emphasis on the decarbonisation agenda.

108. The need case for new infrastructure has been improved in the revised draft NPSs. However, it is important that individual applications for planning consent should be assessed on the basis of need relative to the amount of capacity already consented. Failure to do this would risk encouraging a second "dash for gas", as developers hurry to take advantage of low-cost, high-speed opportunities. While we see a continuing role for abated gas in baseload, as well as peak-time use of unabated gas capacity, the development of too much gas capacity could crowd out opportunities for renewables to form a substantial component of the energy mix. This could cause the UK to miss its greenhouse gas emissions reduction targets. The Government recognised this risk in its response to our predecessors' Report. The overarching NPS must make it clear that decisions will be made in the light of consents already granted for other capacity.

109. While we accept that a prescriptive approach to the location of new projects could undermine the Government's market-based approach and introduce new costs, we conclude that more strategic coordination for new energy infrastructure is necessary, given the massive scale of investment required. This could take place through the new National Planning Framework.

110. We recommend that the timing of the NPSs and other significant planning policy developments should be coordinated. In particular, the NPSs must be in harmony with the changes introduced in the National Planning Framework and in the Electricity Market Reform process. Ill-timing could create uncertainty rather than certainty for new energy infrastructure investment. To this end delaying ratification of the NPSs for a few months would allow them to be coordinated with the other significant planning reforms underway Furthermore, the ratification procedure needs to ensure that consent for the NPSs is real and detailed, not just a symbolic vote on a take it or leave it basis.

111. Other changes introduced in the Localism Bill also pose potential difficulties. We consider that the abolition of the IPC, the creation of MIPU and the transfer of authority for decision-making on applications for planning consent improves the democratic accountability of the process but raises new questions about the impartiality of decision-making by Ministers. Under new arrangements, the Minister will be able to decide against the advice of the MIPC or the IPC. We recommend that the Government publishes criteria against which the Secretary of State may choose to exercise his or her discretion and the reasons for going against the advice of the IPC or MIPU in individual cases. This matters not just for this Parliament but for decades and even centuries to come, as there are very long-term consequences of decisions on energy policy taken now. It is vital that this issue is addressed or much of the anticipated gain of the NPS system may be squandered by the reintroduction of political uncertainty in a field where investment planning horizons are twenty or more years ahead.

112. A lot of work needs to be done in order to meet the Government's investment objectives and their greenhouse gas emissions reduction and energy security goals. The evidence presented to us suggests that, at the moment, the level of investment required will be difficult to achieve. The National Policy Statements will form an important component of this project, but their contribution will be compromised unless the important changes outlined in this Report are made. Other challenges remain, including the improvement of skills and institutional capacity in the energy sector. We will return to many of these issues in our Electricity Market Reform inquiry, announced on 23 November 2010 and we will monitor these developments carefully alongside the other changes in the planning policy process.

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