This piece is by our managing director Tom Lees.
The National Infrastructure Commission (NIC) has published its second National Infrastructure Assessment (202 pages - found here). This important document provides the government with independent expert advice about infrastructure over the next decade or so.
The NIC is set a 'fiscal remit' (total % of GDP to be spend on infrastructure) of 1.3% of GDP. They say their plans fit within that remit. The NIC doesn't set policy but advises. Ministers are obliged to publish a written response (no timescales).
Having read through the whole assessment, it has a tonne of great analysis, modelling and recommendations. There are a few key takeaways to flag:
Interesting points of context
No reservoirs have been built in England in the last 30 years.
Over the last 40 years investment in the UK averaged 19% of GDP, the lowest in the G7.
Electric car sales have increased from 1% in 2015 to 16% in 2022.
Since 2010 the UK has deployed over 13GW of offshore wind and now has the second largest offshore wind fleet in the world.
Since 2012 time to get a DCO has increased by 65% (from 2.6 to 4.2 years on average) and the rate of judicial review has reached 60% from a long-term average of 10%.
Currently around 80% of the energy demand (electricity, heating, driving etc) is met by fossil fuels (petrol, gas, oil), although our electricity generation now produces 75% less emissions that in 1990.
The government will have spent around £30bn on subsidising household energy bills by the time the energy price guarantees wind down fully.
One of the key reasons this is so high and our energy was so badly 'shocked' was because we had no gas storage.
By 2035, modelling suggests that around 60GW of offshore wind and 70GW of solar generation will be needed.
Policy recommendations
A BIG no to hydrogen heating homes. Full support for heat pumps and getting on with their deployment where we have fallen behind. Want subsidies for those on low incomes.
The NIC want massive spending on (up to £4.5bn per year) insulation/energy efficiency.
Prioritising funding on maintenance and repairs of current assets.
Want a 'core network' to transmit and store hydrogen and carbon with hubs in Grangemouth and North East Scotland, Teesside, Humberside, Merseyside, the Peak District and Southampton
There should be a real focus (£22bn) on improving transport infrastructure in England's largest cities: Birmingham, Bristol, Leeds and Manchester
Government should develop a new 25TWh 'strategic energy reserve' (i.e. gas/hydrogen storage) to support resilience to economic shocks.
They want a 'national integrated strategy for interurban transport', including a pipeline of strategic improvements to the road and rail networks over the next 30 years.
Major planning needs to be radically reformed and sped up (recommendations about guidance, sharing environmental data, standard community benefits).
National Policy Statements need to be updated at least every 5 years (an put that in law).
We need a strategic spatial energy plan (that needs to be regularly updated.)
Onshore wind should be added to the NSIP regime.
They think cities need to reduce car journeys by introducing more congestion charges/workplace parking levies.
Their 'house view' is still sceptical on large nuclear power. Remain open-minded on SMRs etc.
The NIC want the energy system largely run on wind/solar with 60GW of 'short-term flexible capacity' (gas/hydrogen) to smooth out when the sun doesn't shine/wind doesn't blow.
How closely the government listen to the NIC’s recommendations or indeed how closely a potential incoming Labour government listen is yet to be seen.