Planning matters

Those in the planning and development industry will all be aware of the Planning and Infrastructure Bill that was published this week. The Bill aims to speed up and streamline the delivery of new homes and critical infrastructure. The Bill is the Labour Government’s next step for delivering positive change in the planning system, something which we welcome.

Lichfields has and will comment on the Bill’s implications for our industry and this piece looks at those proposals for energy infrastructure which aim to support the delivery of the Government’s Clean Power 2030 target.

Clean power by 2030 would mean that Great Britain generates enough clean power to meet its total annual domestic electricity demand, backed up by a gas supply to be used only when needed. This would mean clean sources delivering at least 95% of energy generation. At the moment we generate 60%. So how does the Government propose to facilitate this and what can we do as an industry to seek to ensure this target is met?

 

 

The Government recognises that to fully implement the Clean Power 2030 Action Plan, all routes to clean power will require mass deployment and connection of offshore wind, onshore wind and solar across Great Britain. It recognises that the most immediate barriers to this includes the planning system, the connection system and the regulatory uncertainty around the deployment of particular energy. We have previously blogged and provided our thoughts on this.

The Bill proposes the following measures for the energy sector:

 

1. The Planning System and Nationally Significant Infrastructure Projects (‘NSIP’): measures to streamline the decision-making process. Since coming into parliament, the Government has put planning at the top of the agenda with interventions to the National Planning Policy Framework (‘NPPF’ – December 2024) and updates to legislation to bring onshore wind back into the NSIP process, as well as proposing to increase generating thresholds for wind and energy projects. The Bill includes the following additional measures:

 

1. 1. Requiring National Policy Statements (‘NPS’) to be reviewed and updated at least every five years and a faster process for amending NPSs to reflect legislative changes, policy guidance or court decisions. Only in ‘exceptional circumstances’ will this not be the case.
       
   2. Of particular note, the Bill gives the Secretary of State (‘SoS’) the power to direct that specific projects are redirected onto an alternative consenting route (i.e., not considered under the Development Consent Order (‘DCO’) regime, but instead consented under different routes such as the Town and Country Planning Act 1990). This will be done on a case-by-case basis, for example where it would be more proportionate for the scheme in question, while in turn ensuring the capacity of the NSIP regime is maintained for those projects that need to use it.
       

Also published is the Draft Infrastructure Planning (Onshore Wind and Solar Generation) Order 2025, which sets the new thresholds at 100MW (see our previous blog on this, which notes that the 100MW threshold being set for solar is still less than the 150MW threshold that the Government originally proposed in its consultation.). The final version of the Order, which is intended to come into force on 31^st December 2025, sets out provision for such schemes already in the system.

Lichfields is encouraged to see these provisions, especially at a time when renewable energy and technologies are continuing to evolve and a ‘one size fits all’ approach is not the most appropriate both in policy and the approvals process.

There are other proposed amendments to the NSIP system that will apply to all projects, not just those relating to energy infrastructure and these include proposals to amend aspects of the pre-application consultation process and acceptance stages for DCOs and streamlining the judicial review process. Do look out for further thoughts on this.

2. Prioritising Clean Energy Projects and Connections: according to the explanatory notes that sit behind the Bill, as of December 2024, the queue of electricity generation and storage projects waiting to connect to the grid was 714 gigawatts (GW) - far exceeding the predicted requirements needed to achieve net zero by 2050. So why is this and how is the Government proposing to solve this situation? We understand from speaking to clients that the current ‘first come, first serve’ system gives little value to how ready a project is, which is preventing more viable projects from coming forwards. It overlooks the different technologies and different mix of projects in the queue and does not take into the intricacies of the planning system.

The National Energy System Operator (‘NESO’) is leading on a reform known as ‘first ready, first connected’. Changes include developers being able to demonstrate project milestones to retain connection agreements and demonstrating landowner permission for development. Further reforms would prioritise existing and future projects that are ‘ready’ and ‘needed’ to meet strategic plans. A decision is due in Spring and Lichfields will watch out for this.

There will be some short-term pain from the NESO connections reform on projects needing to reach milestones (quickly!), projects losing their place in the queue, or projects becoming unviable because of the resulting connection dates. This should, however, be off-set by longer term gains in establishing a connection process that is transparent, fair and which, crucially, delivers the energy infrastructure required to deliver the Clean Power targets before and beyond 2030.

 

The Bill’s measures aim to improve the process for managing connections to the transmission system or distribution system and includes:

 

1. 1. Delivery of an efficient and strategically aligned connections process, as summarised above. Reflecting this, bringing forward legislation and granting the power for the SoS, the Gas and Electricity Markets Authority (‘GEMA’), Ofgem, NESO and Distribution Network Operators (‘DNO’) to deliver reforms or amend or modify electricity licences and connection agreements. These agreements often underpin our planning work and planning advice and it is key that all approval and regulatory systems align or work alongside each other.
       
   2. A duty to be imposed on the grid and energy distributers to “have regard to the designated strategic plans” designated by the SoS when carrying out functions related to connections, such as the Clean Energy 2030 Action Plan. Lichfields will prepare a separate blog on these and the importance, considerations and opportunity for a regional planning system. These will form part of the statutory development plan, will set our clear aims for a geographical region, but will not proposes site allocations. Our view is that the ‘hook’ in the paragraph 165 b) of the NPPF (December 2024) is key to identifying ‘suitable areas’ for renewable and low carbon energy sources. We have commented on what is needed to achieve this before and it needs education and knowledge at a planning authority level and developer level as to the geographical locations that can accommodate developments both commercially (i.e., grid connection location and capacity) and in terms of planning policy (i.e., policy designations and environmental context). It is by no means an easy task to match environmental appropriateness with grid connection opportunities to determine suitable areas, particularly when the latter is dynamic.

3. Long Duration Energy Storage (‘LDES’): this is infrastructure that can store electricity and then discharge continuously for eight hours or longer at full power. The important role that energy storage plays in meeting Clean Power targets and supporting the transition to renewable electricity generation is now set out clearly in national policy statements. This supportive context is incentivising a move towards developing storage schemes at 1GW+ scale with new transmission network connection infrastructure as part of the development package, rather than being tied to existing transmission infrastructure and, or locations. This is a potential game changer to deploying new storage infrastructure at super scale.

The Government’s Clean Power 2030 Action Plan sets out that the energy system could need 4 – 6 GW of LDES capacity by 2030. The Bill proposes the following:

 

1. 1. An introduction of a LDES ‘cap and floor scheme’, with Ofgem as the delivery body. This scheme ensures investors receive a minimum amount of revenue to enable investments in LDES assets. Alongside this, the cap on revenue provides return to consumers for their support. The aim is to incentive investment.
       
   2. Ofgem is to reopen this scheme to applicants in the second quarter of 2025 and to award the first connection in the first half of 2026. To inform delivery, Ofgem published a ‘Call for Input’ on LDES in December 2024. Do get in touch if this may interest you.
       

4. Community Benefits: there has been a lot of speculation over what a ‘community benefit’ could entail and how it could be secured, if secured through the planning system. The Bill sets out further clarity on this, albeit it is proposed as a standalone mechanism rather than as a cost that is required in order to make a scheme acceptable in planning terms and to be considered within the planning balance. We see this as a positive.

The Bill sets out the following measure:

1. 1. To give the SoS powers to establish a scheme through regulations that recognises communities living near new eligible onshore wind infrastructure, above ground transmission network infrastructure, and certain major upgrades of existing projects. This will apply ‘credits’ / money to accounts of eligible bill payers living in homes close to such infrastructure, with an additional opt in scheme for eligible people that do not have a direct relationship with an energy supplier. This incentive is similar to the principles of incentives offered already by electricity companies, whereby when demand for energy is low and there is excess energy in the grid, energy is cheaper.

It is thought that this will help increase the acceptability of projects and community support for such infrastructure. This along with the removal of reference to ‘community support’ in previous versions of the NPPF is seen as a real positive. Lichfields understands that further guidance is expected on this in terms of how these incentives will be funded and in terms of any amendments needed to planning policy to recognise the role of community benefits. This could be done in a structured and transparent way if policy acknowledges the role of funding as a material consideration in the planning process.

1. Scotland: the Bill sets out measures for electricity infrastructure in Scotland. The consenting process follows a different process to that in England and Wales. Interesting, Scotland is more advanced in its renewable energy sector and we often look at its policy to understand the positive backdrop for onshore wind projects.

The Scottish Government determines applications to construct or install energy infrastructure (generating stations over 50MW or over 1MW of offshore between 0 and 12 nautical miles from shore and network projects) under the Electricity Act 1989. The devolution powers are complex, with the UK parliament maintaining responsibility for the overall legislative framework. Scottish Ministers have executive competence for consenting infrastructure.

The Bill measures include:

1. 1. Pre-application requirements to be set with the Scottish Government able to charge fees for this stage of the process;
       
   2. Application validation requirements to be set;
       
   3. Management of the pace of key stages of the application phase;
       
   4. A new examination process to respond to an objection from a relevant planning authority;
       
   5. A prescribed process for variations to consents for overhead lines to be established;
       
   6. Scottish Ministers to make variations to consents where necessitated by technological and environmental factors and to correct errors where necessary;
       
   7. Extending the statutory appeal process which currently applies to offshore consenting;
       
   8. Decisions to onshore consenting decisions and variation decisions;
       
   9. Fees for necessary wayleaves to be charged; and
       
   10. A power to enable amendment of the Electricity Works (Environmental Impact Assessment) (Scotland) Regulations 2017 for limited purposes, to enable delivery of the objectives of the reform package.
        
   11. Wales is not mentioned in the Bill however the above measures have lots of similarities with those set out in the Infrastructure (Wales) Act 2024.

 

 

The Planning and Infrastructure Bill has a significant focus on energy infrastructure and development. This is welcomed. The Bill proposes amendments to the planning system, to energy and electricity regulation and legislation and seeks to provide a positive and supportive community backdrop for future developments.

The changes to the national consenting process are positive and they recognise the ever-growing importance of critical energy infrastructure at a national level.

As the Bill signposts more centralised national consenting of energy infrastructure in the future, it is to be expected that the development industry will see the positives that such a process brings, including with the consistent application of national policy and the substantial weight afforded to renewable energy generation, when weighing proposals in the planning balance.

Over the coming months, we will learn how far the changes, both in the Bill and in subsequent secondary legislation, go in ensuring that the consenting process is flexible and proportionate to suit the range of projects that will pass through it in the future. This will be key to successful outcomes flowing from the Bill.