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National Infrastructure Strategy: Decarbonising the UK economy

Decarbonisation of the UK Economy is at the heart of the recently published National Infrastructure Strategy (NIS).

Investment in infrastructure is recognised as “critical” to the UK achieving its ambition of being ‘net-zero’ by 2050 and the measures outlined within the NIS largely reflect the objectives set out in the Government’s 10-Point Plan for a green industrial revolution, these being:

  • Significant investment in offshore wind, including the creation of the manufacturing infrastructure necessary to support further deployment and £160 million for upgrading ports. The ambition is to deliver 40GW of conventional offshore wind development by 2030 and 1GW in the emerging sector of floating offshore wind.
  • Over £500 million for the development of new nuclear power stations and associated R&D. This includes up to £385 million in an Advanced Nuclear Fund for small modular reactors and advanced modular reactors. 
  • Major investment (£1 billion) in the creation of four low carbon hubs in traditional industrial locations, such as the North East, where carbon capture and storage technologies will be co-located with facilities for offshore wind generation and low carbon hydrogen production. The Government has also announced a £240 million net zero hydrogen fund to support the production of both of green and blue hydrogen with the ambition of delivering 5GW of hydrogen production by 2030. The UK Hydrogen Strategy is to be produced in the spring of 2021 and shall provide further details. 
  • Investment in the infrastructure necessary to support the delivery of a network of EV charging points. 
  • Establishment of a Nature to Climate Fund that would support the planting of over 30,000 trees per annum along with strategies for peatland restoration. 

The NIS recognises that in order to achieve net-zero by 2050 the share of generation from renewable energy sources will need to increase “substantially” (with a target of 65% by 2030). By 2050 the power system will need to be virtually carbon free.

Indeed, whilst much of the Government’s recent narrative in respect to the energy sector has been focussed on the potential contribution from emerging technologies such as hydrogen (green and blue) and offshore wind, it is also encouraging to see more explicit recognition that, in the short term, the deployment of established technologies such as onshore wind and solar will need to be accelerated.

The news that onshore wind and solar will be able to participate in the next round of Contract for Difference Auctions in 2021 is certainly a step in the right direction but, in England, the Government still needs to ‘bite the bullet’ and introduce fundamental changes to existing national planning policies to facilitate the delivery of onshore wind turbines, whether these be entirely new developments or the repowering of existing turbines. The continuation of the existing effective moratorium on the delivery of onshore wind appears increasingly incongruous in the context of net-zero ambitions and the Government hosting COP26 in the summer of 2021.

The NIS strategy also acknowledges the need for significant investment in associated grid infrastructure if the UK is to cope with the additional demand that will come from electrification of transport and heating. Demand response and energy storage facilities are also acknowledged to have an important role to play. Wider proposals to remove large-scale energy storage proposals (>50MW) from the DCO / NSIP regime have already been widely welcomed and could facilitate the delivery of much larger developments in appropriate locations.

Other details of interest to the energy sector which have emerged from the Government’s ‘Project Speed’ initiative include a commitment to a reform of the National Infrastructure Planning System. This will include a target of cutting determination timescales by 50% for those projects entering the NSIP system from 2023. Other proposals include establishing project ‘acceleration teams’ of planning experts to fast-track NSIP projects through the planning system; streamlining the Environmental Impact Assessment Regulations through the creation of a quicker / simpler framework; a commitment to the publication of a Net Zero Review in the Spring of 2021 and, finally, the publication of the ever delayed Energy White Paper within the next quarter.

The creation of a new Infrastructure Bank for the UK also forms part of the strategy. The bank would be able to co-invest in infrastructure projects alongside the private sector with further details to be announced in the 2021 budget.

Please contact Mark Worcester for more information on the impact of the NIS on the energy sector. Read our initial thoughts on the NIS here.

3 December 2020

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