Consenting boost for low carbon technologies with publication of new Energy National Policy Statements

A suite of new Energy National Policy Statements (NPS) have been published on 22 November 2023. ??

The new documents set out the Government’s overarching energy policy as well as technology specific policies on gas electricity generating stations, renewables, gas and oil infrastructure and electricity networks.

There is a legal requirement for decisions on nationally significant development to be taken in accordance with any applicable NPS, subject to limited exceptions. The publication of the new policy is therefore significant news from a consenting perspective and provides greater certainty as to the need case for new energy proposals.

Publication of the final policy marks one of the final stages of a three year process since the review was first announced in the Energy White Paper in late 2020, and follows two rounds of public consultation in Autumn 2021 and Spring this year.

Key Changes

The new documents overhaul pre-existing energy policy that dates back to 2011. Many of the changes are geared at decarbonising the UK economy and hitting legally binding net-zero targets.

Five key changes:

1. Nationally significant low carbon infrastructure, now including all onshore and offshore electricity generation that does not involve fossils fuels, and grid infrastructure, are identified as a “critical national priority” (CNP). CNP infrastructure benefits from a policy presumption that its urgent need should generally outweigh its residual adverse impacts.
2. ?There is significant new support for emerging technologies including carbon capture and storage (CCS) and hydrogen where an “urgent need” is identified. The Overarching Energy Policy (EN-1) confirms that it will be the “primary basis for decision-making” on nationally significant CCS and hydrogen projects.
3. ?The addition of solar PV technology within the scope of the Renewables NPS (EN-3) reflects rapid technological advancements and a reducing cost base since designation of the previous policy (when solar PV was considered unviable).
4. ?EN-1 directs that “substantial weight” should be given in planning decisions for “novel technologies or processes” that emerge during the lifetime of the policy statements, where these can be scaled up and contribute to energy objectives.
5. ?The introduction of new environmental principles including biodiversity net gain are included in assessment criteria in EN-1 (with technology specific guidance on suitable schemes in EN-2 to EN-5).

Changes since Spring 2023 Consultation

In addition to expanding the meaning of critical national priority infrastructure to all low carbon technologies, there are a number of other significant changes in policy since the consultation on previous drafts earlier this year.

Ten key changes since the Spring:

1. The removal of wording in EN-1 which explicitly stated that new coal and large-scale oil-fired electricity generation were not consistent with carbon budgets and net-zero and which committed Government to taking “…active steps to phase out existing facilities”. This softening of policy reflects recent concern over the stability of supply during periods of high demand as well as the current Government’s increasingly pragmatic approach to guaranteeing energy security (a clear political dividing line).
2. ?There is new direction on how CNP infrastructure should be treated in the planning balance, with the need case for CNP outweighing the residual effects “in all but the most exceptional cases”. Although the policy makes clear that this presumption will not apply where residual impacts present “an unacceptable risk” to human health and public safety, defence, irreplaceable habitats or the achievement of net zero. The same exception also applies where residual impacts present an “unacceptable risk” offshore to navigation, or onshore in relation to flooding and coastal erosion.
3. ?In the context of offshore wind, there is new direction under EN-1 and EN-3 as to the weight to be attached to CNP infrastructure in derogation cases under the Habitats Regulations and development in Marine Conservation Zones. The final policy emphasises that infrastructure that supports energy security and decarbonising the power sector to combat climate change will be capable of clearing high public interest thresholds in order to secure consent.
4. ?A move towards strategic compensation for offshore wind farm derogation cases is? included. This reflects recent legislative change in the Energy Act 2023. Further direction on treatment of the emerging Offshore Wind Environmental Improvement Package (OWEIP) also makes its way into the final EN-3 policy.
5. ?New wording confirms Government’s acceptance that there is a need for offshore wind projects to “maximise” their capacity subject to the usual environmental and technological constraints, and that any site specific capacity limits set by The Crown Estate through its leasing process should not be a barrier to delivery of greater capacity at the consenting stage. This is potentially helpful wording where there is tension with statutory consultees as to the scale of projects and pressure to adopt a more precautionary approach to remove objection.? ?
6. ?There is also new direction as to how designation of infrastructure as a CNP will influence legal tests requiring clear outweighing of harm, exceptionality, or very special circumstances.
7. ?The final EN-1 policy provides further guidance on the information required to support offshore wind and multi-purpose interconnector projects where development consent may only authorise part of such projects.
8. ?Policy in previous drafts of EN-1 that qualified support for hydrogen and CCS technology on the basis of unproven viability has also been removed. This reflects increasing confidence of utility scale development of such infrastructure.
9. ?Pre-empting new biodiversity net gain requirements, as well as new objectives under Environment Act 2021, wording is now included which clarifies that compliance with legal requirements, as and when they come into force, will not attract significant weight in the decision-making process. A contemporaneous update given recent case law on BNG.
10. ?There is a move away from gentle encouragement towards early pre-application engagement with Marine Management Organisation where a marine licence is required. The final wording in EN-3 emphasis that applicants “must” take this step.

Transitional Arrangements

The new policy has now been laid before Parliament for formal approval, or deemed approval after a period of 21 sitting days. After this the policy will be formally “designated” by the Secretary of State (come into effect).

Following designation, the new policy will only have effect in relation to applications for development consent accepted for Examination after the date of designation . Accordingly the old policy will continue to have effect in relation to existing applications accepted by PINS and that are awaiting or in Examination, or that have completed Examination and where a decision is now expected. However the new policy will still be an “important and relevant” consideration in such cases and is likely to be afforded significant weight by the Secretary of State in the decision-making process on energy proposals.

Comments:

James Gibson , Partner

It is particularly significant that solar PV as well as CCS and hydrogen technologies fall within the scope of the new policy. This removes ambiguity over the needs case for such development and simplifies the legal basis for determination of such applications. The absence of support for new onshore wind is unsurprising in the context of the current legal framework for consenting such projects, albeit a disappointing omission.

The need case for low carbon infrastructure has been further strengthened through the “critical national priority” designation. Although it is not quite a slam dunk with a number of qualifications in the policy as well as in overarching legal tests.

Flexibility is also a key theme of the new policy with the Government keen to ensure it can pivot towards emerging technologies that may play a key role in supporting decarbonisation. Equally it wishes to have the ability to fall back on certain carbon intensive infrastructure that can continue to provide a reliable and affordable supply of energy. ?

Paul Maile , Partner

The publication of the new policy has been a long time coming and is very welcome news for energy developers. It provides a clear positive policy for the determination of projects and emphasises the importance of climate change and net zero goals and the vital role low carbon technologies play in achieving them.

Peter Nesbit , Partner

With a general election just around the corner it seems clear that energy generation and transmission will form a key political battleground.? The publication of the energy NPSs along with the broadening of the Critical National Priority designation to include the provision of nationally significant low carbon infrastructure represents a step change in the Government’s commitment to achieve Net Zero.? It will also be a boost for onshore renewable energy developers, such as the rapidly growing solar sector, whose contribution is also now explicitly recognised.