Planning and Infrastructure Bill

Committee (3rd Day)

Clause 16: Directions to modify connection agreements

Amendment 72

72: Clause 16, page 22, leave out lines 12 and 13 Member’s explanatory statement This amendment is a drafting correction which would remove the definition of “qualifying distribution agreement” from clause 16. The definition is unnecessary because the term is already defined for the purposes of clause 16 in clause 13(8).

My Lords, Amendment 72 in my name seeks to leave out lines 12 and 13 on page 22 of the Bill, removing the additional definition of “qualifying distribution agreement”. It is a straightforward technical amendment. Its purpose is to tidy up the drafting of the Bill by removing a definition that is no longer required. The term “qualifying distribution agreement” is already defined in Clause 13(8), following other changes made during the passage of the Bill. The amendment will help ensure that the legislation is clear, coherent and free from unnecessary or redundant definitions. It will not alter the substance or effect of the policy but support the overall clarity and workability of the Bill.

I hope that the Committee will support this amendment. I look forward to the debate on the other amendments in this group; I will reserve comment on them until I make my winding-up remarks. I beg to move.

My Lords, I am grateful to the Minister for being so brief and to the point and for allowing me the opportunity to explain the purpose of the other amendments in this group in my name, which are Amendments 73 to 76. Like the Minister, I look forward to hearing from the noble Earl, Lord Russell, about grid capacity in his Amendment 79. I remind the Committee of my registered interest as chair of development forums in Cambridgeshire and Oxfordshire.

My amendments relate to Clause 17, which contains a power to give Ministers the opportunity to designate strategic plans for the purposes of the connection reforms that are taking place in relation to the transmission and distribution networks. I suppose it would be helpful—not least because it will connect to what the noble Earl, Lord Russell, will raise—for me to remind the House that this process is under way. In effect, it was commenced by the Connections Action Plan under the previous Administration in November 2023. A simple way of expressing it is by saying that there was a lot of commitment to future substantial increases in generating capacity in a range of technologies, which were increasingly forming a queue to book their potential connection to the transmission or distribution networks. However, there was considerable risk related to whether those projects would be delivered on time or at all.

The volume of such commitments made it very clear that a significant proportion of them would not be viable, because there would be an excess of what was required. The numbers varied, but I think the latest figure was something like 714 gigawatts of grid capacity relative to about 500 gigawatts of demand. Instead of the old regime, which can be characterised as “first ready, first connected”—namely, those who were planning to provide capacity simply booked a place in the queue and then, when they were ready, they were given a right to be connected—the intention now is for there to be strategic planning behind the process leading to the net-zero objectives in 2030, which were published under the Government’s Clean Power 2030 Action Plan last December.

All of that is just to explain where I think we are. The question, then, is: where does Parliament fit into all this? We are giving the Government, in Clause 17, the power to designate strategic plans. In so far as there is a clean power action plan and the Government designate it, there was no parliamentary process—none that I can find—associated with the clean power action plan. It was simply published by the Government. Unless I am wrong, the strategic spatial energy plan that is intended to be published next year will have no parliamentary process associated with it. So, in so far as the National Electricity System Operator and the distribution operators are required to align with a designated strategic plan, they are aligning with something in relation to which Parliament has no role.

The regulations saying that they are designated are intended to be achieved by a negative process. I think that all that Parliament will see in due course is an order made by Ministers saying that the clean power action plan and, in due course, the SSEP are designated strategic plans for the purposes of what will then be Section 17 of the Planning and Infrastructure Act. This will cut across the existing arrangements because Ofgem and ISOP or NESO, as it is variously described in legislation, must have regard to the strategy and priorities statements that are published by the Government. So the strategy and policy statement that the Government publish from time to time—the last time was in the earliest part of 2024—is a statutory basis for the priorities that are set for Ofgem and NESO.

The first question to the Minister—and the purpose of these amendments, which are to probe how this is going to work—is: what is the relationship between the present strategy and policy statement, as published by the previous Government, and the designated strategic plans? Clearly, it would be right—necessary, in my view—for the present Government to publish their own strategy and policy statement to give effect to their intentions under the 2030 action plan and, in due course, the spatial energy plan.

The second question is: is it the Government’s intention to publish next year, in line with the strategic spatial energy plan, a new strategy and policy statement?

The third question is: why is the strategy and policy statement not the right and sufficient means by which the Government set out the strategic priorities for Ofgem and NESO? I ask this because Section 165 of the Energy Act, which requires them to have regard to these statements, makes clear that the strategy and policy statement is the one that is published under Section 131(1) of the Energy Act 2013 and that it can be published only if the procedural and consultation requirements in Section 135 of the 2013 Act have been complied with. It will not surprise noble Lords to know that this means that it should be published in draft; that it should be the subject of consultation; and that it should then be laid before Parliament and subject to the approval of both Houses prior to its designation as a strategy and policy statement.

That being the case, the intention of my amendments is to substitute that statement and ask, “Why shouldn’t the Government use that?” The difference is that this would have to be consulted on and approved by both Houses of Parliament before it were the designated plan for the purposes of Ofgem and NESO. When the time comes, I would be grateful for the Minister’s answers to some of those questions; obviously, I reserve the right to come back to this on Report.

My Lords, I remind the Committee of my recorded register of interests: I am a non-executive director and a board member of the Water Retail Company. I will speak to my Amendment 79 and respond to the amendments on connections reform.

Amendment 79 calls on the Government to insert a new clause into the Planning and Infrastructure Bill under the heading of “increasing grid capacity” and proposes that, within three months of the Bill becoming law, the Secretary of State should publish a plan to achieve two simple yet crucial objectives: to reduce the cost and the time taken for new connections to the electrical transmission or distribution system; and to permit the development of local energy grids. The need for this amendment should be beyond reasonable doubt. I am concerned that, if these reforms are not made, we will not be capable of meeting the Government’s stated objective, which we share, to achieve clean power by 2030—a key step on our overall climate change and energy targets.

To decarbonise, we must electrify. Electricity demand is set to rise by at least 11% before 2030 and at least double by 2050. How we heat our homes, how we travel and how we power our industry must all be by electricity, which demands wiring everything up and ensuring that both low-voltage and high-voltage networks are fit for purpose. I would argue that this is one of the biggest societal energy changes since the Industrial Revolution and is only some five years away, which is merely the blink of an eye in planning terms. At present, the delay in getting grid connections is one of the greatest obstacles to decarbonisation, to developing new housing and industry, and to increasing our economic output as a country. Our businesses and communities are waiting seven to 10 years—even longer in some cases—before they can secure the right to feed clean energy into the system or to make power connections. Developers in grid hotspots—or “not spots”, potentially—are reporting connection waits of several years as being typical.

My Lords, connections reform is very important if we are to give the grid capacity. The noble Earl, Lord Russell, is right in wanting to speed things up and to ensure that these connections are not too costly. That matters whether you want more renewable energy in the mix or would prefer—as I would—to continue with a mixed supply, including better and continued use of North Sea oil and gas.

However, the fact is that the grid is not resilient and everything is too slow. We have too many layers of decision-making, too much strategising, too many bureaucratic rules and, therefore, not enough speed and determination. I know that that is behind the Government’s planning reforms. I fear that my noble friend Lord Lansley’s amendments could also slow things down, but he may be able to reassure me on that. I look forward to the Minister’s response on how we can ensure that these changes will speed things up and get us the reforms that we need, if the economy and the energy economy are to work well in the months and years ahead.

My Lords, I agree with my noble friend Lord Lansley’s approach of being specific about what it is that developers and investors should be looking at instead of what the latest designated strategy might be. This approach also makes sure that we do not end up with more reasons for judicial review, when it is left to judges to determine what is the strategy or where there is nuance and so on. My noble friend made points about making that direct link to understanding a moment in time and that the measure has been through the parliamentary aspect of the process, initiated by the Government of course. That simplicity will in fact help the Government in achieving a lot of the aims which they seek.