Infrastructure Planning (Electricity Storage Facilities) Order 2020

Considered in Grand Committee

Moved by

That the Grand Committee do consider the Infrastructure Planning (Electricity Storage Facilities) Order 2020.

My Lords, the draft order was laid before the House on 14 July 2020.

Electricity storage will play a crucial role in helping us meet net zero by 2050. It provides flexibility so that renewable generation, electric vehicles and heat pumps can be integrated on to the system. Deploying smart and flexible technologies, such as storage and demand-side response, could save up to £40 billion by 2050.

We currently have around 4 gigawatts of operational storage in Great Britain. National Grid estimates that we could need up to 40 gigawatts by 2050. This Government are committed to creating a best-in-class regulatory framework for storage by removing barriers, reforming markets and investing in innovation through actions set out in our 2017 smart systems and flexibility plan. Reforming the planning system to remove barriers and introduce a more appropriate planning treatment is a key action for storage under this plan.

Currently in England and Wales, where storage facilities are above 50 megawatts and 350 megawatts respectively, planning consent must be sought from the Secretary of State under the nationally significant infrastructure projects—NSIP—regime. Where facilities are below these thresholds, they are consented by the relevant local planning authority.

Evidence collected through a consultation published in January 2019 demonstrated that the 50-megawatt threshold is distorting sizing and investment decisions in England. For example, there is a clustering of storage projects sized just below the 50-megawatt threshold, and projects have been split into multiple 49-megawatt projects to avoid consent through the NSIP regime.

Following consideration of this evidence, in October 2019 the Government consulted on removing electricity storage, except pumped hydro, from the NSIP regime in England and Wales. We received 28 responses from industry, which were broadly supportive. The NSIP regime was established to streamline the consenting process for major infrastructure projects where the benefits are national, but the planning impacts are local. Here, it is appropriate for the Secretary of State to weigh up this planning balance.

For batteries and more innovative forms of storage, the planning impacts are low compared to pumped hydro and other forms of generation. Therefore, the extra time and cost of the NSIP regime is not proportionate and limits the size of new projects to 50 megawatts. We have not seen any stand-alone battery storage facilities deploy above 50 megawatts. This order removes these technologies from the NSIP regime, meaning consent will generally be sought from the local planning authority. To ensure consistent treatment and a level playing field in economic competitiveness across the locations, this will also apply to Wales where the NSIP threshold is currently 350 megawatts.

My Lords, I am grateful to the Minister for that introduction to this document. I am no great expert in power supply, but I find it interesting that the Government still see a difference between power generation and power generation and storage. They both generate power, but one of them takes the power when it is not being used and stores it, as in pumped storage.

As the Minister said, it is pretty unlikely that there will be any pumped storage of any significance in England, because the geography does not really suit. I was interested in her remarks about what I understood to be pumped hydro offshore. If that is really something that we should be looking at, it has even greater potential for environmental damage, because presumably you would be using salt water rather than fresh water. I can see a lot of people not liking to have to create a new salt water lake somewhere in England, and I hope that that never happens.

It would be helpful for us in considering this to hear from the Minister exactly where the other storage will come from. She quite rightly said that there would be enormous demand for power storage in future because of how we will be using electric cars and other electrical vehicles, including electric trains. One of the big potentials for power storage is in using people’s car batteries at night, provided that there is some kind of control system, so the power can be put back before people want to use their cars in the morning. It seems that there will be an enormous demand for storage, which must take into account when there is no wind and it is dark, so there is no solar energy.

I question whether this measure will be sufficient. I have no problem with the order in itself, but I worry about whether we will have enough in future and what the options are. I am sure that, when the Minister comes to respond, she can put me right on all those things.

My Lords, it is a pleasure to follow the noble Lord, Lord Berkeley. I share his interest in vehicle-to-grid storage, as I shall reflect shortly, although I would place perhaps greater stress on the need for demand-side management, rather than thinking of electricity as water in a tap that you can just turn on whenever you want.

I note that the study carried out for the Government estimated that the benefits to the UK of a smart and flexible energy system could be somewhere between £17 billion and £40 billion by 2050. Batteries are clearly a crucial part of that, so I welcome the modest progress marked by this statutory instrument and the encouraging words of enthusiasm for battery storage from the Minister.

I often go back to the words of Steve Holliday, CEO of National Grid, in 2015, who stated that the idea of large coal-fired or nuclear power stations to be used for baseload power was outdated. He said:

“From a consumer’s point of view, the solar on the rooftop is going to be the baseload”,

and that energy markets

“are clearly moving toward much more distributed production”.

What was implied in that was a great growth of storage as well as renewable generation—local, household and business based. We can only regret the lost half decade in which progress has been so achingly slow. For example, I have often heard from a great community and social enterprise, Sheffield Renewables, which develops funds and builds, owns and operates renewable energy schemes. It has had some great successes, but been frustrated again and again by inadequate and unstable government policies.

In all these issues, with the previous SI that we were debating and this one, we must not lose sight of the fact that the best possible energy—the greenest, cleanest and cheapest energy—is the energy that we do not need to use. Every form of electricity generation and storage, and every form of energy production, has a cost, both financial and environmental. In recent weeks the International Energy Agency has been getting highly enthusiastic about extremely low-cost solar. This is something that must not be forgotten.

My Lords, I come to this debate not to oppose the SI in any way, but because I have a long-standing interest in renewable energy and storage. For nearly two decades, I was vice-chairman of the Parliamentary Renewable and Sustainable Energy Group. I have had a solar roof on a property of mine in Leicestershire for nearly 20 years, which was actually supported by the Labour Government, who were trying to increase usage of solar roofs. So I come to this with some knowledge of renewable energy and depressingly little knowledge of storing electricity. That has been the big problem—how to store renewable energy, which can generate when the wind is blowing hard, but storing it has been much more expensive.

I welcome this SI because it removes obstacles to storing electricity that might otherwise remain. The Dinorwig power station near Llanberis in Snowdonia opened 36 years ago and is the biggest pumped hydro in England and Wales. I have visited it in the past; it takes electricity that might be surplus to requirements—for example, in the middle of the night when there is no peak demand—and uses it through hydro at peak demand. That is one way of storing it. I once visited a similar place not far from me in Leicestershire, a small-scale plant owned by a gentleman who uses wind power from a wind generator to pump water uphill into a pond; he then lets it go when he needs lots of electricity at home. That is on an entirely different scale, but is very valuable. Of course, we have all put electricity into heat sumps; you heat the water up, then you have electricity within the water—or hot water, at least.

It always worries me that government policy can be a sledgehammer to crack a nut. Indeed, sometimes it changes rather quickly, as the noble Baroness, Lady Bennett, just said. But this is a good thing. Can the Minister tell me how battery development is proceeding? I know that it is proceeding. If she does not have the details immediately to hand, perhaps she might write to me with them.

My Lords, this is not really my territory. I hesitate to come into this discussion but I will not delay noble Lords long. I note that the Delegated Legislation Committee in the other place dealt with this proposal in 13 minutes and, even then, the Minister commented on the widening of the discussion beyond the SI itself. That has already begun to happen in this discussion.

There seems to be little controversy surrounding the SI. The 2019 consultation drew 28 responses from industry, which were broadly supportive. However, is not the question that needs to be addressed on what additional funding will be given to local authorities to ensure that there is sufficient expertise and capacity for local planning officers to make fully informed decisions about these planning requests? That is especially important, considering the technical nature of these planning proposals, which will not be spread evenly across the country. If the answer to that is in the fees charged for planning applications, how can we be sure that sufficient professional expertise is available to the local authority? How can we stop that being provided by consultants advising local authorities, which might be the very reason why this scale of project was seen as an NSIP?

Going a bit broader—I realise that this is trespassing—energy will be a key part of the Environment Bill. Members of the House understand the legislative pressures as we come to the end of the transition period for leaving the EU, but there will be little opportunity for the House to discuss that Bill when it eventually comes to us. Can the Minister ensure that we get on to that ASAP?

Lastly, I want to echo some of the things that have already been said. One thing that we have learned during these strange times of Covid-19 is the importance of going local. Microgeneration is increasingly important. It does not necessarily depend on the national grid and is potentially much more flexible. We have lots of examples, but we need rapidly to generate more, from 93 solar panels on the roof of Salisbury Cathedral and local community energy schemes to micro hydro and the potential for electric vehicles to discharge into the grid. This is all highly regulated, so how is the development of microgeneration to be progressed more quickly so that we will be better able to live more sustainably with locally generated electricity?

It is a pleasure to follow the right reverend Prelate. I thank my noble friend the Minister for introducing this piece of legislation.

I presume that this legislation is potentially very exciting, if it means that we rely less on, and reduce our dependency on, nuclear, at a time when there is a great question mark over what nuclear facilities will be built. Is my noble friend in a position to say whether the Government or an organisation such as the National Infrastructure Commission have done an audit of the number of current facilities? My noble friend mentioned one, but there are multiples of 49 gigawatts round about. Do we know how many there are and where they are based?

I want to make a plea to the Government through my noble friend the Minister. As far as possible, where renewable energy is to be stored in this way, can it be stored as close as possible to the source of the energy’s production? For example, if it is from wind farms, which are often deeply unpopular if they are onshore, can it be stored as close to the source as possible, and can it be used by the local community? My noble friend has not said that there will any grief but, as the right reverend Prelate alluded to, there sometimes is in local communities, and we need to carry them with us. This could be a massive gain. Having got an onshore wind farm, local communities will then go on to benefit from a constant stream of renewable energy once the energy has been released from the battery storage.

Can my noble friend say a bit about how electricity is to be stored once it has been released back into the national grid? As far as I am concerned, overhead pylons are a complete no-no. We do not want any more of them. I frequently visit my family in Demark, and I see these massive low-lying overhead pylons. They are very unsightly and they are generally dangerous for low-flying aircraft and helicopters. They could also have an impact on greater use of the new generation of drones that is coming along. That is yet another argument for why electricity should stay as local as possible to the source of its production. Can my noble friend rule out electricity being transported by overhead pylons as it comes on stream? Can my noble friend also confirm that this will help us to deliver low-carbon heating? If that is the case, how would that progress?

My Lords, I thank the Minister for her introduction to this SI. I declare my interest as a vice-president of the Local Government Association.

Also, until May last year, I was an elected councillor on South Somerset District Council. The Minister may know that South Somerset has invested in electric battery storage both to help to balance its budget and to play its part in helping England and Wales to reach their carbon neutral objectives. South Somerset is running a number of initiatives that could contribute to helping the country reach its carbon-zero targets by 2050.

The draft instrument that we are debating today is clear, as is the Explanatory Memorandum that accompanies it. The Government are changing the regulations so that electricity storage facilities over 50 megawatts do not have to go through the nationally significant infrastructure projects process, thus avoiding the involvement of the Secretary of State. All electricity storage applications will now go to local planning authorities, regardless of their size. The exception is for pumped hydro schemes, for which the threshold remains at 50 megawatts in England and Scotland.

This is definitely a step in the right direction. Local councillors and planners should be able to make decisions about infrastructure projects in their area. In direct contrast to my comments in the previous debate this afternoon, I congratulate the Government on taking this step to improve local democracy and speed up the process.

However, I want to comment on the timeline for the process that has brought us to this debate. In January 2019, the Government ran a consultation on the treatment of electricity storage. This included retaining the 50-megawatt NSIP threshold as it applied to stand-alone storage projects, at the same time amending the 2008 Planning Act to set a new NSIP threshold for composite projects. The consultation ran until 25 March 2019. As the Minister said, the Government then conducted a follow-up consultation, which ran from 15 October to 10 December 2019. This was a period when the country as a whole had its mind on other things.

I thank the Minister for her clear explanation of the order before the Committee. This simple order, which corrects an error from the Energy Act 2016, will make a key difference in the development of much-needed battery storage for the development of renewables and the pursuit of net zero. I am happy to approve the order in that respect.

The threshold of 50 megawatts for determining the avenue of planning requirements was always an impediment to progress. It is disappointing that the Government had to wait for the outcome of linked strings of 49.9-megawatt facilities to appreciate the position— a lesson that took the Government four years to appreciate.

The government consultation also highlighted industry’s concern that the pumped hydro storage threshold needs to be increased to 200 megawatts. The Government rejected that on the grounds of a lack of evidence. Does the industry need to repeat the experience for the Government? Is the Minister convinced that there is no lack of vision in this respect, and that faster progress could not be achieved by raising both thresholds above the 50-megawatt level? What evidence would the Minister’s department need? Would consistency across the devolved Administrations always be considered the more important aspect? However, avoiding the considerable extra burden of the NSIP regime is of great importance to the technology.

During the passage of the Energy Act 2016, there was a lot of general debate on battery storage, underlining the clear necessity of its development to capture greater benefits from renewable and low-carbon technologies. The key element of support for the development of battery storage revolves around how to categorise it under the regulatory framework. The case was made for the creation of a separate licensing regime, either as a subset of generation or as a stand-alone regime.

The smart systems and flexibility plan, and its follow-up in 2018, set out the intention to make changes to both arrangements as well as to the threshold arrangements. Can the Minister give the Committee any information on when further progress will be made with the battery licensing part of that intention? I understand that the department has completed preparatory work to define storage in primary legislation. Will the energy White Paper, which is now long overdue, include these aspects within its appraisals of future plans? Will there be answers in time for COP 26? What indications can the Minister give on that today?