2017 infrastructure planning preview: key upcoming trends
This article was produced by Nabarro LLP, which joined CMS on 1 May 2017.
Summary and Implications
As the New Year dawns, we examine the most recent infrastructure development trends in planning and the forthcoming infrastructure issues that landowners and developers in the UK should be aware of in 2017.
Fracking
2016 has been a landmark year for the shale gas industry.
In October Communities Secretary Sajid Javid allowed a proposal for fracking in Lancashire, declaring that the need for shale gas exploration is a material consideration in deciding whether to grant consent for fracking works. Mr Javid allowed an appeal for drilling and hydraulic fracturing at four exploratory wells, together with a monitoring station near Blackpool, stating that objectors’ concerns could be “controlled by planning conditions or by other regulatory regimes”.
Mr Javid’s decision is hailed as a landmark moment for fracking promoters. It is only the second permission for onshore fracking in the UK in six years.
In November campaigners from a North Yorkshire village failed in a High Court attempt to quash planning permission for what would be the first fracking project to take place in the UK for five years.
This all coincided with the Department for Communities and Local Government’s recent announcement of a new tranche of funding worth £800,000 to help mineral planning authorities handle shale gas applications, which is available this financial year.
The shale gas industry will welcome these decisions. The approvals are seen by some as an important step towards determining the UK’s gas resources, with the aim of developing a sustainable onshore natural gas exploration industry in the UK. This ambition is stifled however by the fact that, in policy terms, England is the only UK nation to welcome fracking. Scotland and Wales have both effectively declared moratoriums, while Northern Ireland has introduced tough planning policies for fracking.
Yet even in England the rate of planning permissions for fracking has been slow. Since a fracking moratorium was lifted by the Government in 2012 – initially imposed after exploratory drilling in Lancashire infamously resulted in a minor earthquake – there have only been a handful of fracking applications from developers, due to growing public concern about fracking techniques. With the political tide now arguably turning in favour of fracking, energy firms are beginning to gain the confidence to make new or refreshed applications.
The areas in which the government has issued petroleum exploration and development licences are a good indicator of where future applications are likely to be. These include the East Midlands, Yorkshire, Lancashire, the strip of the country that covers the geological formation known as the Bowland Shale, and parts of Dorset, Sussex, Devon and Gloucestershire.
Nuclear and renewables
With the UK Government giving the go-ahead for the nuclear reactor development at Hinkley Point last September, there is scope for growth in the UK energy industry. The proposed new plant, known as Hinkley Point C, is set to begin generating electricity in 2025, delivering 7% of the UK’s electricity.
The Government expects future wholesale electricity prices to be lower than its 2013 forecast for the electricity that Hinkley Point C generates. The low-carbon electricity will also help towards the UK’s climate goals, and the huge project is expected to provide an economic stimulus.
French energy giant EDF is leading the project in conjunction with the Chinese, via the CGN group. The Chinese are also involved in a project at Sizewell, and may develop their own scheme at Bradwell in Essex.
The Government was especially keen on the Hinkley Point deal because nuclear energy is always available, so it delivers the amount of power that is needed to satisfy minimum demand. This is crucial as more intermittent renewables – such as wind and solar power – come on to the grid.
However, the UK’s clean energy sector has been hit by uncertainty from wide-ranging subsidy cuts that came into effect in early 2016, and a shift in the political relationship with Europe following the Brexit referendum. One of the most damaging effects the vote has had on the sector has been an almost industry-wide halt to new clean energy projects being built. Clean energy project finance investments fell by 78% to $1.6bn by the third quarter of 2016, which means almost $6bn less was spent in the UK on developing new solar, wind or biomass projects.
Proposed clean energy projects have also been held back by planning refusals for renewable energy projects in the green belt. In October, Scottish ministers refused an extension to one of the largest wind farms in Europe because of its impact on the landscape. In December, Mr Javid dismissed a scheme in the Lancashire green belt for the installation of a 5MW solar farm across greenery classified as Grade 4 agricultural land, and in early January a planning inspector rejected proposals to construct a plant for the production of hydrogen fuel in south west Scotland because of the harmful visual impact on the countryside.
The ambitious project to construct a tidal lagoon power plant in Swansea Bay, which received development consent in 2015, received further backing in a review of the role of tidal lagoons by Charles Hendry, the former energy minister. The review called for the publication of a national policy statement specifically for tidal energy to inform the consenting process and stated that tidal lagoons “can play a cost effective role in the UK’s energy mix”.
The future of clean energy projects depends on whether uncertainty over investment in the run up to and post-Brexit can be addressed, and whether there is enough political support and appetite to facilitate planning approvals in the areas where security of energy supply is most needed.
Railways
In 2016’s Autumn Statement Chancellor of the Exchequer Philip Hammond announced significant additional funding for transport. This included a new National Productivity Investment Fund of over £23bn for innovation and infrastructure over the next five years.
The Chancellor also said the Department for Transport would continue to work with Transport for the North to develop detailed options for the Northern Powerhouse Rail programme, and will soon receive the business case for Crossrail 2 in London.
These developments came shortly before the Government confirmed the preferred route for the second phase of HS2, which will run from the West Midlands to Leeds and Manchester, completing a Y-shaped corridor with connections to the existing East Coast Main Line (ECML) and West Coast Main Line (WCML).
The government intends to bring a hybrid bill before parliament in 2019 that would cover 82km extensions from Crewe to Manchester Piccadilly and a junction with the WCML south of Wigan, and a 198km route from a junction with Phase 1 of HS2 (the London to Birmingham line) near Lichfield to Leeds and a junction with the ECML at Church Fenton south of York.
To protect land affected by the route from being developed, when confirming the preferred route for HS2’s second phase the Government simultaneously published safeguarding directions. Planning applications relating to safeguarded land are subject to a high level of scrutiny by HS2 Limited, which will be a statutory consultee. Significant development on safeguarded land may be refused due to potential conflicts with the proposed route.
Roads
In December 2014, as part of its long-term programme to improve England’s motorways and major roads, the Government announced its first road investment strategy (RIS 1). RIS 1 outlined a multi-year investment plan covering England’s motorways and major roads, including more than 100 major schemes funded by £15.2bn of public money.
Over £11bn of this capital funding has been committed between 2015 and 2020 and includes over 400 miles of extra capacity that will be delivered through major upgrades, like the A14 Cambridge to Huntingdon Improvement Scheme (A14 Scheme), and by the creation of a spine of new smart motorways which use the hard shoulder and pioneering technology to manage traffic.
In total, Highways England Company Limited (Highways England), the Government company charged with operating, maintaining and improving England’s motorways and major A roads, has 63 major road developments currently planned for the next five years, 20 of which are located in the South East and 11 in the West Midlands. In the North West, road improvements – in combination with HS2 – are viewed by the Government as the key to unlocking the potential of the Northern Powerhouse. Highways authorities have committed to a £1.5bn investment for the North West, including 80 miles of smart motorways.
Although the majority of these planned improvements are not scheduled for completion until 2020, land interests will be affected much earlier and you should take steps to protect your interests sooner rather than later.
Highways England has already received an order granting development consent (DCO) for the A14 Scheme. The DCO established statutory powers of acquisition and possession of land. Landowners and developers should act now to address the effect of road improvements on affected property. Early engagement with Highways England can help protect your position.
RIS 1 is repeatable and work is now underway to develop the second RIS (RIS 2), which covers the second road period post-2020. RIS 2 is currently in the research phase, and will be developed over the coming years, so that work on delivering long-term improvements to our roads can continue seamlessly beyond 2020.
If you have queries about fracking applications, energy, HS2, road improvements, or how your properties are affected, please do not hesitate to contact us.
