15 April 2025 • 5 minute read
The Planning and Infrastructure Bill and energy infrastructure – building it quicker and making it greener
Introduction
The Planning and Infrastructure Bill (P&I Bill or Bill), as introduced in the House of Commons on 11 March 2025, is set to become a major piece of legislation, having the principal objectives of accelerating house building and delivering critical infrastructure projects. It followed on from the government's working paper Streamlining Infrastructure Planning, 26 January 2025, and covers a wide range of matters. This article, however, will concentrate on the energy infrastructure provisions in Part 1 of the Bill1.
With that focus in mind, the P&I Bill can be described as an important contributor to the government's mission to make the UK a Clean Energy Superpower2, because, as with the earlier Energy Act 2023, it will have a significant role to play in delivering the low carbon objectives of the government's Clean Power 2030 Action Plan3 (CP2030 Plan), and should facilitate energy security for the nation.
The barriers to achieving the aims of the CP2030 Plan include a number of problems with the planning and connections systems, as well as regulatory uncertainty around some clean power technologies, such as long duration electricity storage and offshore wind projects.4 Measures within the P&I Bill are intended to address those barriers, as discussed below.
Key takeaways include:
- NSIPs: the Bill will reform the planning system for nationally significant infrastructure projects;
- Connections: the Bill will support the reform of electricity connection procedures, as we move away from the 'first come, first served' system;
- Consenting for infrastructure in Scotland: the Bill will make the consenting process for electricity infrastructure in Scotland more efficient and predictable;
- LDES: the Bill will impose a duty on Ofgem to deliver a 'cap and floor' scheme to provide revenue certainty for long duration electricity storage projects;
- Electricity transmission and consumer benefits: the Bill will enable the provision of bill discounts to those living closest to new or significantly upgraded electricity transmission infrastructure;
- Offshore wind farms: the Bill will extend the generator commissioning period for offshore electricity transmission infrastructure; and
- EV charging infrastructure: the Bill will streamline the approval of street works needed for the installation of electric vehicle public charge points.
Read on for more on what the P&I Bill introduces for energy infrastructure.5
The P&I Bill Guide6 explains how a failure to build enough critical infrastructure, in particular nationally significant infrastructure projects (NSIPs), is constraining economic growth and undermining energy security.
NSIPs are defined in Part 3 of the Planning Act 2008 (PA 2008), and belong to five infrastructure fields or sectors, one of which is energy (the others being transport, water, waste water, and waste). The reform measures in Chapter 1 (Nationally Significant Infrastructure Projects) of Part 1 of the P&I Bill have the aim of speeding up and making more certain the development consenting process for NSIPs, and strengthening the policy framework for the National Policy Statements (NPSs) provided for in the PA 2008 and which form the cornerstone of the NSIP regime.
The main NSIP reform measures under the P&I Bill (implementing several of the reforms outlined in MHCLG's7 working paper on planning reform of 26 January 2025) are listed and summarised in numbered paragraph 18 of the government's explanatory notes – they include (among others):
- a requirement for NPSs to be updated at least every five years to reflect government policy and priorities for economic infrastructure delivery, along with a more streamlined process for updates;
- a new power for the Secretary of State to make it possible for infrastructure projects above the NSIP thresholds to be directed out of the NSIP regime and instead consented by a more appropriate route for the particular project (e.g. the Town and Country Planning Act 1990, the Highways Act 1980, or the Transport and Works Act 1992);
- provision for the removal of the paper permission stage for judicial reviews of NPSs and development consent orders; and
- reducing opportunities for judicial review of planning decisions by the removal of the right to appeal for cases deemed totally without merit at the oral permission hearing (so that facilities such as nuclear plants and wind farms can be approved and built faster).
The above 'removals' are in response to recommendations in the independent review into legal challenges against NSIPs by Lord Banner KC, as published on 28 October 2024. Further information on those and other consenting reforms can be found in MHCLG's Factsheet: Critical infrastructure reforms.
The press release published by the Department for Energy Security & Net Zero (DESNZ) and others on 10 March notes how the NSIP-related measures in the P&I Bill will support the government’s pledge (one of the milestones in its Plan for Change) to make development consent decisions on at least 150 major economic infrastructure projects (including wind, solar, and hydrogen) in the current Parliament.
The enduring electricity connections reform programme8 has been on-going for some years, driven (in part) by the need to address both the considerable increase in connections' applications and the long delays in making the connections arising from the problematic 'first come, first served' system. That system "gives little value to how ready a project is, which is preventing more viable projects from being able to connect ahead of slower moving ones. It also overlooks the technological and locational mix of projects connecting to the grid, and therefore does not consider impacts on the efficiency, cost or security of the electricity system, nor take account of strategic planning of the system as a whole"9.
The reform initiative, which aims to move us to a 'first ready and needed, first connected' system, has a number of constituent parts being progressed by the National Energy System Operator (NESO) and the Office of Gas and Electricity Markets (Ofgem), namely energy industry code modifications, new connections methodologies, and new and amended electricity licence conditions. To this reform measures' list can now be added certain provisions of the P&I Bill which are intended to ensure the reforms deliver the intended benefits in full.
Chapter 2 (Electricity Infrastructure) of Part 1 (Infrastructure) of the P&I Bill includes clauses 9 to 13 which are concerned with connections to the electricity transmission and distribution systems. Those clauses are the new legislation referenced by DESNZ (in the context of connections' reform) at page 66 of the December 2024 CP2030 Plan, which states that "We will introduce legislation, when parliamentary time allows, to ensure connection reform aligns with strategic energy and network plans and supports delivery of clean power by 2030".
Clause 9(1) of the Bill confers a power on the relevant Secretary of State and the Gas and Electricity Markets Authority (GEMA) (which operates through Ofgem) to modify electricity licences (both the terms and conditions of particular licences, and standard conditions of a particular licence type), documents maintained in accordance with the conditions of electricity licences, agreements made in accordance with a document so maintained, and qualifying distribution agreements (as defined in clause 9(6)). This is called the modification power, and it is the subject of the remainder of clause 9.
The purpose of clause 9 is to improve the process for managing connections to the transmission system and distribution system (see clause 9(2)), by allowing the Secretary of State or GEMA to step in, if necessary, to ensure that any required modifications can be made. When exercising the power, the Secretary of State or GEMA (as applicable) must comply with relevant obligations under section 3A of the Electricity Act 1989 (see clause 9(5) of the P&I Bill). Clause 9(4) limits the exercise of the modification power in clause 9(1) to three years after the commencement of the power.
The government's explanatory notes relating to the P&I Bill (the version of 11 March 2025) give the following example as regards clause 9 and the modification power: "A reformed connections process will require complex amendments to codes and licences and the existing processes for modifications may not deliver the required amendments in time. In the event of delays to implementation, the government or GEMA could [(using the power given in the Bill)] expedite a set of changes outside the standard process".
The scope of the modification power under clause 9 (including how it may be exercised and the types of modification that may be made) is addressed in clause 10 of the P&I Bill; and the procedural requirements relating to the exercise of the modification power are provided for in clause 11. Clause 12 in turn deals with the giving of directions by the Secretary of State or GEMA (through Ofgem) to NESO (referred to in the Energy Act 2023 as the independent system operator and planner (ISOP)) and/or a distribution network operator (DNO) to modify connection agreements.
Clause 13 of the P&I Bill is headed 'Managing connections to the network: strategic plans etc' and serves to amend both the Energy Act 2023 and the Electricity Act 1989, the effect of which is to impose duties on NESO and DNOs to have regard to designated strategic plans when exercising their functions relating to connection applications and the management of the connection queues. New section 165A of the Energy Act 2023 (to be inserted by clause 13(1) of the P&I Bill) gives power to the Secretary of State to designate (by regulations) plans or documents as strategic plans for the above purposes. As stated in the explanatory notes at 249, subject to designation, these strategic plans could include the CP2030 Plan and could apply technological and locational criteria to the process for connecting to the electricity network.
The above description of the P&I Bill's measures concerning connections is summarised in numbered paragraph 28 of the explanatory notes relating to the Bill as follows: "The Bill will confer on the Secretary of State and Ofgem powers to affect the aforementioned connections reforms directly. The powers will be available should existing reform processes face significant delays or fail to deliver intended benefits, including alignment with strategic energy plans. Additionally, through the provisions in the Bill, NESO and DNOs will have to have regard to strategic plans designated by the Secretary of State when carrying out functions related to connections, such as [the] Clean Power 2030 Action Plan. The proposed measures will support implementation of connections reform and will provide guidance and support for NESO and DNOs when making decisions on issuing new connection offers".
The topic of consenting for electricity infrastructure in Scotland is covered in clauses 14 to 20 of the P&I Bill and summarised in numbered paragraphs 29 to 33 of the government's explanatory notes for the Bill. Those notes set out the case for modernising consenting provisions of the Electricity Act 1989 of relevance to the process, described as being outdated and inefficient, by which the Scottish government (through its devolved powers) determines applications to construct or install electricity infrastructure under the 1989 Act.
The reforms, as provided for in the above clauses of the Bill, have been developed jointly by the UK and Scottish governments, and were informed by the Electricity Infrastructure Consenting in Scotland Consultation launched by DESNZ on 28 October 2024, the government's response to which was published on 10 March 2025. The reforms are needed to speed up decision making (as was done for England and Wales through the Planning Act 2008’s NSIP regime).
As explained in numbered paragraph 36 of the explanatory notes for the Bill, and in MHCLG's Guide to the Planning and Infrastructure Bill, long duration electricity storage (LDES) is infrastructure that can store electricity and then discharge continuously for eight hours or longer at full power – it enables the electricity system to store intermittent clean wind and solar power when it is plentiful and use it when most needed. Pumped storage hydro, compressed air energy storage, liquid air energy storage and flow batteries are all examples of LDES technologies.
The P&I Bill provides, through clause 21 (which inserts a new section 10(P) (Long duration electricity storage) into the Electricity Act 1989), for Ofgem (as the delivery body) to introduce an LDES ‘cap and floor’ scheme to unlock investment in LDES and deliver the first major LDES projects in four decades.
The antecedents of clause 21 include Ofgem's call for input notice of 18 December 2024 headed LDES Cap and Floor Regime: our role, plan, and response to the DESNZ publication - this sets out Ofgem's initial thoughts on a cap and floor model for LDES, allocation approach, timescales, and consultation questions. The call for input followed on from DESNZ's press release of 10 October 2024 headed New scheme to attract investment in renewable energy storage, and DESNZ's publication that day of the government's response to its consultation of 9 January 2024 on designing a policy framework for LDES. On 11 March 2025, based on feedback received in respect of the above call for input, Ofgem published its and DESNZ's joint Long Duration Electricity Storage: Technical Decision Document. This confirms key details of the LDES cap and floor scheme and sets out how the scheme will operate, when application windows will open, how much capacity will be procured, and which projects will be eligible to apply, amongst other details.
Numbered paragraph 40 of the explanatory notes reports that Ofgem intends to open the LDES cap and floor scheme to applications in the second quarter of 2025 (this occurred on 8 April with Ofgem's launch of the first application window), and to award first contracts in the first half of 2026. This Bill (when enacted) will impose a duty on Ofgem to establish and implement the scheme.
It is worth noting here that section 213 (Electricity storage) in Part 7 of the Energy Act 2023 clarifies that electricity storage (as defined in that section) is a subset of electricity generation for licensing purposes under the Electricity Act 1989. It is understood (see pages 19 and 55 of the consultation response document of 10 October 2024) that LDES technologies will need to meet the legislative definition of electricity storage in order to receive support through the LDES scheme.
Please refer to numbered paragraphs 36 to 40 and 293 to 299 of the explanatory notes for the P&I Bill for further information on clause 21 of the Bill.
The growth in clean electricity generation connected to the network requires a corresponding increase in investment in transmission network infrastructure – this is to transport the clean energy from where it is generated (which might be in remote locations, including offshore) to where it is needed (e.g. urban centres). Without this infrastructure investment, network congestion arises due to maximum capacity being reached on parts of the network, leading to the incurrence of significant constraint costs.10
With the aim of fostering community support for new transmission infrastructure, and therefore minimising the risk of opposition to such infrastructure causing delays, clause 22 of the P&I Bill (which amends the Electricity Act 1989) confers powers on the Secretary of State to establish a scheme (via regulations) to recognise, through discounts, communities living near new eligible onshore and above ground transmission network infrastructure (e.g. pylons, cables and substations), and certain major upgrades of existing projects.
Numbered paragraphs 45 to 47 of the policy background section of the government's explanatory notes summarise the measures in clause 22 of the Bill, and explain how this recognition for communities living nearest to new network infrastructure will largely be through applying credits to the accounts of eligible billpayers, with alternative arrangements for an opt in scheme where eligible persons do not have a direct relationship with an electricity supplier.
DESNZ and MHCLG issued a press release on 10 March 2025 regarding this aspect of the P&I Bill reforms headed Households near new pylons to save hundreds on energy bills. On the same day, DESNZ published two news items of relevance to the above, headed:
- Electricity transmission network infrastructure: Community Funds – this relates to new guidance entitled Community Funds for Transmission Infrastructure: Guidance. Community funds are monetary and non-monetary benefits provided by developers. The guidance came into immediate force on its publication; and
- Electricity transmission infrastructure: proposed bill discount scheme – this was published with a policy paper titled Electricity Bill Discount Scheme for transmission network infrastructure.
These measures should facilitate much-needed investment in new electricity transmission infrastructure.
The Offshore Transmission Owner (OFTO) regime (implemented in 2009) contemplates that transmission assets (cables and substations) constructed by an offshore wind farm developer (along with the wind farm itself) will be transferred by the developer to an OFTO (appointed following an OFTO tender round) within 18 months of the completion of the construction of the offshore wind farm project – the transfer is made for value (with the transfer sum determined by Ofgem)11. This 18-month generator commissioning period (GCP)12 allows for the technical demonstration of the transmission assets to the relevant OFTO bidders, and gives time for Ofgem to run the OFTO tender process (for the relevant tendering round) and select the preferred bidder to become the OFTO – it also provides time to finalise commercial negotiations ahead of the transfer.
Beyond this 18-month GCP, the developer / generator is not (unless a time extension is given) legally able to continue transmitting electricity (which it does for the purpose of commissioning and testing the transmission assets), as to do so would constitute the transmission of electricity without a transmission licence, which is an offence under section 4(1)(b) of the Electricity Act 1989.13 A developer / generator can request a transmission licence exemption if they are unable to transfer the transmission assets to the appointed OFTO by the GCP deadline, and the Secretary of State can then grant a time limited exemption under powers in section 5(1) of that Act, but this process is time consuming and costly for both the developer / generator and the government.
A DESNZ call for evidence launched on 13 November 2023 confirmed developer concerns regarding the time insufficiency of the GCP for its purpose, and support for a longer GCP, due to wind farm projects becoming larger and more complex. An extension to the GCP from 18 to 27 months is therefore to be introduced by clause 23 of the P&I Bill, thereby reducing the number of offshore wind farm projects which will require exemptions of the kind described above.
Numbered paragraphs 48 to 51 of the policy background section of the government's explanatory notes for the P&I Bill discuss this aspect of the Bill; with numbered paragraphs 321 and 322 of the legal background section of those notes providing further information.
Clause 24 of the P&I Bill provides for the amendment of the Forestry Act 1967 for the purpose of enabling the appropriate forestry authorities in England and Wales (Forestry Commissioners in England and the Natural Resources Body for Wales) to use and permit the use of forestry land for the generation, transmission, storage and supply of electricity from renewable sources. See numbered paragraphs 52 to 55 of the policy background section of the government's explanatory notes for the P&I Bill.
The P&I Bill provides, through clause 43 (Installation of electric vehicle charge points) (which introduces new provisions to the New Roads and Street Works Act 1991 and the Highways Act 1980), for the replacement of street works licences (the obtaining of which can be a costly and time-consuming process) with permits (where possible) in respect of the installation of electric vehicle (EV) charge points on public roads and streets.
The aim of this is to accelerate the rollout of EV chargepoints by making their installation easier, cheaper, and faster. This should better enable the continuing growth in public charge points for EVs in the UK, to meet the chargepoint need resulting from an increasing uptake of EVs. As noted in numbered paragraph 77 of the explanatory notes, the government is expecting there to be a minimum of 300,000 public charge points for EVs by 2030. Numbered paragraph 81 explains how, by "streamlining the approval process through the use of permits, the government intends to expedite the roll out of EV charging infrastructure and incentivise the transition to zero emission vehicles".
A definition for "public charge point" is to be found in clause 43(9) of the Bill, which amends section 115E (Execution of works and use of objects etc. by persons other than councils) of the Highways Act 1980, including by inserting the definition there. The definition is "a charge point within the meaning of Part 2 of the Automated and Electric Vehicles Act 2018 that is provided for use by members of the general public".
This year is shaping up to be another highly significant one for the energy transition and the journey to CP2030. The P&I Bill, currently working its way through the Parliamentary process (it had its second reading in the House of Commons on 24 March) is an important part of this. In the coming weeks we can expect to see it enacted (with any amendments)14 and taking its place alongside the many other recent and ongoing energy legislative and reform programmes, including the Energy Act 2023, the review of wholesale electricity market arrangements, changes to the contracts for difference scheme, a modified electricity connections process, competition in the onshore transmission network sector, and more besides.