Energy National Policy Statement

On the 17th of January 2023, the Government announced the designation of five revised National Policy Statements (NPSs) for Energy. Introduced by the Secretary of State for Energy Security and Net Zero, the new statutory guidance comes because of a three-year review process. This has included a judicial review, two rounds of public consultation, and two draft iterations.

The five reworked National Policy Statements include:

EN-1: Overarching NPS for Energy;

EN-2: NPS for Natural Gas Electricity Generating Infrastructure;

EN-3: NPS for Renewable Energy Infrastructure;

EN-4: NPS for Natural Gas Supply Infrastructure and Gas and Oil Pipelines; and

EN-5: NPS for Electricity Networks Infrastructure.

This short insight explores the role of National Policy Statements, what key revisions have been introduced for energy infrastructure developments, and the hints they provide for the direction of incoming environmental assessment policy.

What are National Policy Statements?

The Planning Act 2008 introduced Development Consent Orders (DCOs) to provide a streamlined process for developments categorised as Nationally Significant Infrastructure Projects (NSIPs) that would otherwise need to apply for several separate consents. Under the NSIP regime, projects pass through a six-stage process consisting of pre-application, acceptance, pre-examination, examination, recommendation & decision and post decision. Examination is conducted by the Planning Inspectorate, issuing a recommendation to the relevant Secretary of State who then makes the final decision whether to grant a DCO.

National Policy Statements (NPSs) set out government policy for the delivery of NSIPs, establishing a legal framework for planning determinations to provide clarity, transparency and certainty for developers, promoters, statutory and non-statutory consultees, and the public. They are the statutory documents that form the grounds from which the relevant Secretary of State conducts decision-making for large-scale infrastructure, with all schemes required to demonstrate how they deliver against the National Policy Statements. Beyond detailing the reasoning for policy choices, they must also disclose how the Government is adapting to or mitigating climate change.

While policy presumption for infrastructure was made clear in the original energy NPSs, without regular updates, the need case has reduced. Projects have experienced a greater risk of legal challenge, requiring additional evidence and reporting, in turn increasing complexity and slowing the process down. The outdated Energy National Policy Statements have been identified as a key cause of these delays.

As required by the Planning Act 2008, NPSs must be reviewed if there has been a “significant change” in circumstances. In December 2020, it was announced in the Energy White Paper that the Energy NPSs, originally designated in 2011, would be revised to reinforce national priorities regarding “energy security, reducing costs, and delivering on net zero while creating new green jobs and industries for the UK”.

Key Changes of Energy National Policy Statements 

The new Energy National Policy Statements overhaul previous guidance, reflecting changing policy focus towards decarbonising the energy section and wider economy, as well as net-zero ambitions in the nearly thirteen years since the original statements were designated.

EN-1 sets the precedent for each of the other technology-specific NPSs, presenting the Government’s overarching policy for the delivery of major energy infrastructure. Providing new policy context, the revised EN-1 details sector-wide net-zero ambition while relaying the importance of improved supply and energy security as ensured through the delivery of new major energy infrastructure. Explicit overarching and technology-specific biodiversity guidance pre-empts new requirements, planning weight to be limited where gains do not go beyond mere compliance. This mirrors policy objectives introduced by the Environment Act 2021. EN-1 describes the Government’s view that there is a critical national priority (CNP) for the development of significant low carbon infrastructure. Infrastructure under CNP designation benefits from a policy presumption that its urgent need should generally outweigh residual adverse impacts. Electrical transmission infrastructure associated with this type of development also benefits from designation. The planning weight attached to CNP will outweigh residual effects in “all but the most exceptional cases”. This is however an exception to unacceptable risks to human health and public safety, defence, flooding and coastal erosion, irreplaceable habitats, or the achievement of net zero. While what constitutes “unacceptable risk” is not explicitly defined, this is most likely about exceeding statutory environmental quality limits. Initially, CNP designation was going to solely apply to offshore wind but was since expanded due to the ease of deployment and cheaper cost of other low carbon technologies such as solar.

Revised EN-3 for Renewable Energy Infrastructure expands from 82 to 118 pages, with additional technology-specific guidance and overarching factors influencing site selection and design included as new additions. Pumped hydrogen storage, solar, and tidal stream energy policy related to the assessment, mitigation and secretary of state decision making about each respective technology of schemes of NSIP size threshold is added. This is particularly significant for solar, alongside CNP designation, the addition of technology-specific guidance reflects advancement regarding efficiency. This is on top of a lower cost base since the designation of the original energy NPSs, and the Government’s ambition to achieve a five-fold increase in combined growth of ground and rooftop solar deployment by 2035. As the cheapest and most established renewable energy technology, it is hoped greater policy coverage will reduce ambiguity over the need case for these technologies and, streamline the legal basis for application acceptance. Elsewhere in EN-3, pre-application engagement with the Marine Management Organisation (MMO) where a marine licence is required has shifted from passive encouragement to a “must” requirement.

The high dependency on the security and reliability of national electricity networks for net zero combined with the need for “a significant amount” of new infrastructure for the deployment of up to 50GW of additional offshore wind capacity has seen EN-5 increase from 32 pages to 47. This increase reflects the increased number of interconnectors, multi-purpose interconnectors and bootstraps consented through the NSIP regime, technology-specific guidance added for each.

EN-2 and EN-4 have seen less change than the other NPSs, despite name changes for EN-2 from ‘NPS for Fossil Fuels’ to ‘NPS for Natural Gas Electricity Generating Infrastructure’ and EN-4 to ‘Natural’ Gas Supply Infrastructure and Gas and Oil Pipelines. EN-2 sees the addition of climate change adaptation and resilience guidance about site selection and design, though the overall document has been reduced from 32 pages down to 18. This reflects the fact the majority of new generating capacity will need to be low carbon. EN-4 states that the importation, storage and transmission of gas and oil “remain crucial” during the transition to net zero, with “‘some limited residual use” beyond 2050. The need case for clean hydrogen and carbon capture use and storage (CCUS) infrastructure is also added.

LURA and Hints to New Policy

In October 2023, the Levelling Up and Regeneration Act (LURA) received Royal Assent, implementing change as to how environmental impacts might be assessed. Environmental Outcome Reports (EOR) were brought into law, outcome-based reporting claimed to be more “streamlined, proportionate, and targeted” in comparison to the Environmental Impact Assessment (EIA) and Strategic Environmental Assessment (SEA) systems they are set to replace. Though formally enacted, the changes introduced by LURA are yet to see practical implementation. The Act’s provisions, including EOR, are to be enabled through a suite of secondary legislation to follow.

There has been criticism of LURA regarding the fact the replacement of EIA and SEA was done so with minimal evidence of input from industry professionals and practitioners. While consultation on the principles of the new system was held, LURA was introduced before results could be published. The exact implications the Act will have on environmental assessment practice are difficult to predict, though recent policies, including the revised Energy NPSs, can be inspected for clues as to how outcome-based reporting will be introduced.

On examination, the suite of revised Energy National Policy Statements arguably begins the implementation of the ‘outcome-based’ approach to environmental assessment that LURA is yet to practically introduce. EN-1 makes clear that in the consideration of DCO applications, the relevant Secretary of State should have regard to the aims and goals of the Environmental Improvement Plan (EIP). The Department for Levelling-Up, Housing and Communities (DLUHC) has already implied the EIP’s targets will form the basis on which the ‘outcomes’ of that EOR assessment will be based. During an earlier EOR consultation, DLUHC stated an intention to create a direct link between the EIP and planning decisions. The Energy National Policy Statements have launched this process, name dropping the Environmental Improvement Plan nine times in EN-1 alone.