Kwasi Kwarteng promised to boost the development of a range of infrastructure projects by streamlining the planning process for road, rail, nuclear, wind power, hydrogen, CCS and oil and gas projects as he described his long-awaited mini-budget this morning as a plan for growth.
Unexpectedly, the planning reforms included a commitment to lift the current ban on new onshore wind projects in England, putting them on the same footing as other key infrastructure projects. However, the push for low-carbon infrastructure has come alongside similar moves to accelerate investment in high-carbon projects, which will face fierce opposition from green groups.
The chancellor said the government was “going out of its way to get Britain to build” through its new Growth Plan, which includes a raft of major tax cuts alongside plans to waive or roll back green planning and housing rules, as well as support for homes and businesses. , which are facing skyrocketing electricity bills and inflationary pressures.
The plan includes a “non-exhaustive” list of more than 100 nationally significant infrastructure projects which the Treasury says will be “accelerated as soon as possible” through planning reforms and streamlining of the development consent process with the aim of getting the “overwhelming majority to start construction by the end of 2023 “.
Along with 86 road construction and safety schemes, the list includes both the Hinkley Point C and Sizewell C nuclear power projects, seven offshore and floating wind schemes – including the latest seabed licensing rounds – two public funding schemes for electric vehicle (EV) charging points , five hydrogen production and infrastructure schemes, and 10 national rail and 15 local rail, bus and tram projects. The plans promise to give a boost to the government’s Net Zero Strategy, with planning constraints remaining one of the biggest barriers to developing low-carbon infrastructure. But the priority list also includes five oil and gas projects, including the first phase of the controversial Kamba field in the North Sea, which campaigners fear could threaten Britain’s long-term emissions targets.
In a surprise move that will no doubt be warmly welcomed by the renewables sector, Treasury documents released alongside Kwarteng’s speech indicate the government’s intention to lift a long-standing block on new offshore wind farms in England, promising to “unleash the potential of onshore wind by bringing consent to compatibility with other infrastructure’.
Although Kwarteng barely mentioned going net-zero and developing clean energy in his speech to Parliament, the documents tout low-carbon energy sources such as nuclear power, hydrogen, carbon utilization and storage (CCUS) and renewable technologies – together with increased domestic gas supplies – as critical to improving domestic energy security and achieving climate goals.
“The government plans to increase renewable energy capacity by 15 per cent by 2023, supporting the UK’s commitment to achieve zero emissions by 2050,” the growth plan says.
The plan also promotes energy efficiency – widely touted as a key means of mitigating the long-term impact of soaring electricity bills for businesses and households – promising to impose new obligations on energy suppliers “to help hundreds of thousands of their customers take steps to reduce their electricity bills”. , which he predicts could provide an average saving of around £200 a year per household.
“This aid will be worth £1 billion over the next three years, starting in April 2023,” it said. “Support will target those who are most vulnerable, but will also be available to the least efficient homes in lower tax brackets.”
The government also said it would “shortly” open bids worth up to £2.1 billion over the next two years to support public sector investment in energy efficiency and renewable heating.
Increased funding for energy efficiency schemes likely to be welcome, but promised funding falls far short £5 billion package suggested by the industry-backed Energy Efficiency Infrastructure Group (EEIG).
Separately today, the Department for Business, Energy and Industrial Strategy (BEIS) announced a £49.4m funding boost to support heavy industry businesses, including metals, ceramics, pharmaceuticals and food, to switch from expensive fossil fuels to cheaper, more green fuels and energy sources. The government said the move would support efforts to decarbonise industry in line with the UK’s net zero target of 2050.
Kwarteng also provided more details on the government’s energy security strategy, pledging “significant interventions” in the energy market to lower costs and improve long-term supply security.
The new measures include plans for a £40 billion Energy Markets Funding Scheme, which is being implemented with the Bank of England, to provide a source of additional liquidity to energy companies that are “otherwise in good financial shape” to help them deal with extraordinary fluctuations in wholesale energy prices, the government said. It will be limited to firms that are “systemically important” to the UK economy, with liquidity provided through a 100 per cent guarantee through commercial banks, and applications will open on 17 October.
Treasury also confirmed a flurry of measures that had already been lifted in recent days and weeks ahead of today’s Growth Plan, including moves to lift England’s fracking ban, grant more North Sea oil and gas exploration licenses and roll back green planning rules such as habitat protection rules in nearly 40 new low-tax, low-regulation ‘Investment’ Zones across the country in an attempt to stimulate investment from businesses and developers.
The plans come just a day after the government confirmed it plans to relax a proposed climate fit test for new oil and gas projects in the North Sea, angering environmental campaigners. The government has confirmed it is scrapping three of six proposed tests that new fossil fuel projects must meet, including requirements to consider the impact of so-called Scope 3 emissions from burning fossil fuels, whether new projects will add to global oil and gas production , which threatens the Paris Agreement, and whether companies are also investing in clean energy. Philip Evans of Greenpeace said the changes meant the climate compatibility checkpoint had become “a sham”. “It allows the government to certify oil and gas licenses as climate-friendly,” he added.
The planning reforms come on top of previously announced measures aimed at mitigating the effects of a sharp rise in electricity bills this autumn and beyond, including a freeze on average household bills of £2,500 a year from next month and an “equivalent” plan to cap bills for businesses for at least six months.
The government also confirmed plans for new 15-year contracts for power generators, such as nuclear and renewable projects, in a bid to lower energy costs – a proposal that has divided energy industry experts, with some predicting it could help curb bills. and others warn. may lock in higher-than-necessary prices for the long term.
Kwarteng told parliament today that he expects spending on the full energy support package to be around £60bn in the six months from October.
“The estimated cost of our energy plans is particularly uncertain given volatile energy prices, but based on recent prices, the total cost of the energy package for the six months from October is expected to be around £60bn,” he told parliament. “We expect the cost to come down as we enter into new long-term energy contracts with suppliers.”
The moves are part of Quarteng’s wider vision for low taxes and low regulation to tackle the UK’s troubling economic and cost of living problems, which he described as a “new era of growth” that would break the “vicious cycle of stagnation” that observed over the past decade or more.
Announcing a series of cuts to income tax, National Insurance and stamp duty, he argued that higher taxes on labor and capital had “strained further growth” and promised to produce a more detailed fiscal plan “in due course” along with a full independent economic forecast from the Office of of Budget Responsibility (OBR), the latter of which was absent from today’s statement.
“We are at the beginning of a new era,” Kwarteng told parliament. “As we look into this new era, we realize that our country has enormous potential. We have boundless entrepreneurial drive. We have highly qualified people. We have a huge global presence in sectors such as finance, life sciences, technology and clean energy. “
“But there are too many barriers to entrepreneurship,” he continued. “We need a new approach to break them down. That means reforming our economic proposition. In the coming weeks, my Cabinet colleagues will brief the House on all aspects of our ambitious agenda. These updates will cover: the planning system, business rules, childcare , immigration, agricultural productivity and digital infrastructure’.
But the speech sparked a fierce backlash from shadow chancellor Rachel Reeves and concerns about the current market, with the pound falling again to a 37-year low.
Reeves stressed that today’s plan was the government’s sixth growth strategy in 12 years, accusing the chancellor of effectively acknowledging more than a decade of Conservative economic failure.
https://www.businessgreen.com/news/4056803/britain-building-chancellor-unveils-growth-plan-lift-block-onshore-wind-accelerate-infrastructure-development ‘Build Britain’: Chancellor lifts blocks on offshore wind projects in new ‘growth plan’