Reforms designed to speed up energy grid connections and public investment in the manufacturing and space sectors have been announced by Chancellor Jeremy Hunt in his Autumn Statement.
Energy grid reforms
The government said it is “removing barriers” to investment in critical infrastructure by reforming the planning system to speed up approvals and reduce the time it takes for new projects to connect to the grid.
This includes freeing up over 100GW of capacity so that “the significant majority” of projects will get their requested connection date with no wait and, for viable projects, reduce overall connection delays from five years to six months.
The hope is the reforms will drive outside investment in energy projects in a bid to hasten the UK’s shift to net zero energy, as well as improve energy security.
“Once embedded, the grid reforms announced could increase investment temporarily by an average of £10bn per year over the next 10 years, speeding up the transition to net zero,” the Treasury said.
The government is also setting out an Action Plan to halve the time to build new grid infrastructure to seven years, in response to the review by Nick Winser, the UK’s Electricity Networks Commissioner.
Key elements of this action plan include new proposals for community benefits with up to £10,000 off electricity bills; consulting on reforms to energy consenting rules in Scotland; commissioning the Electricity System Operator to work on a new Strategic Spatial Energy Plan; and introducing competition into onshore electricity networks in 2024.
These actions will help to lower electricity prices, but the Treasury admitted they are only likely to deliver net annual savings of £15-25 for the average household by 2035.
John Pettigrew, chief executive of National Grid, said: “We welcome the bold plans set out by the government today.
“A spatial energy plan and accelerated planning consent will bring clarity, authority and urgency to what needs to be built and where, while new community benefit proposals will ensure local people remain at the heart of the energy transition. The connections action plan will deliver fundamental reforms needed to enable us to plug clean energy projects in faster, and build on the progress already being made.”
Manufacturing
The government also announced funding for the manufacturing sector to help the UK “remain at the forefront of the global transition to net zero”. The funding could support an average of £2bn of additional business investment per year in UK manufacturing for 10 years, the Treasury said.
Last week, a £4.5bn package designed to bolster the UK’s manufacturing sector was announced, which included £960m to develop clean energy that could be used by the sector.
Stephen Phipson, chief executive of Make UK, said: “This was a bold statement by the Chancellor, who has worked hard to understand the industry’s needs and deliver a transformational strategy designed to turbocharge investment.
“Industry will also welcome measures to boost engineering apprenticeships and stimulate advanced manufacturing, which will be vital in boosting high-value growth and high-skill employment in the economy of the future.”
But Chris Barlow, partner at accountancy firm MHA, said the continued lack of an industrial strategy would undermine today’s package for manufacturers.
“The Chancellor’s £4.5bn support for strategic manufacturing industries is eye-catching; however, the devil is in the details. How and when these funds will be delivered are key questions that must be addressed, particularly with next year’s likely change in government. As it stands, many will remain sceptical whether the new investment will reach the sector in time,” he said.
“The government cannot keep providing short-term solutions in an attempt to distract from the glaring lack of long-term vision. This budget should have given manufacturing the one thing it didn’t have – room to plan.”
Stuart Lemmon, CEO of EcoAct, said: “The UK’s approach to achieving net zero remains unconvincing. While the £4.5bn investment into strategic manufacturing sectors to spur net zero and the maintenance of the tax break for capital investment are most welcome, there remains an overreliance on unproven technology solutions. Meanwhile, properly addressing domestic high-carbon activities directly has once again been missed, undermining the country’s position as a leader on climate change.”
Space
The statement also announced an additional £121m for the UK space sector. The investment is designed to boost new space clusters and infrastructure and make progress towards climate goals by supporting the Earth observation industry with £47m in taxpayer money.
Up to £59m was awarded to 15 projects, which the Treasury said would help bring an expected £100m of new private/public investment in space research and development infrastructure.
It also said it would open £15m of calls to “nurture innovation” for satellite communications, which will be delivered as part of the £60m European Space Agency Advanced Research in Telecommunications Systems (ARTES) programme.
Quantum computing
A set of quantum missions were announced as part of the £2.5bn, 10-year National Quantum Strategy. This includes a mission to have accessible, UK-based quantum computers capable of running 1 trillion operations by 2035. Other missions focus on quantum networks, medical applications, navigation and sensors for infrastructure.
Dr Chris Ballance, CEO of quantum start-up Oxford Ionics, said: “With a heritage of research and a growing pool of world-leading talent, the UK has a quantum ecosystem unlike any in the world. The timely and ongoing government support outlined in today’s Statement further cements this status. It also gives us a deeper look at the timelines of the government’s ambitious plans.
“This is because the announcement is so much more than the headline pledges – it’s a call to arms. The government is sending a clear signal of the UK’s unwavering commitment to becoming the leader in the quantum revolution. It represents both a strategic investment in our nation’s future and a profound vote of confidence in our ability to lead, innovate and compete on the world stage.”
Offshore wind
To further accelerate offshore wind deployment, legislation to provide the Crown Estate with borrowing and wider investment powers will be brought forward.
The plan should help to unlock a further 20-30GW of new offshore wind seabed rights by 2030, the Treasury said. It plans to work more closely with the Crown Estate to bring forward additional floating wind in the Celtic Sea through the 2030s, which could see an additional 12GW of generation deployed, alongside the 4.5GW round due to open soon.
Minor announcements
The Autumn Statement also announced plans to remove “unnecessary” planning constraints around the deployment of electric vehicle (EV) charging infrastructure and will consult on amending the National Planning Policy Framework to ensure the planning system prioritises the rollout of EV chargepoints, including EV charging hubs.
It will also consult on introducing new permitted development rights to end the blanket restriction on heat pumps one metre from a property boundary in England, and will allow water companies to increase investment by £6bn per year compared to the previous price review period.
