CBI demands end to planning uncertainty, warns of risk to low-carbon investment

Industry leaders have warned that £150bn of private sector investment in low-carbon infrastructure will not be made unless the government sorts out uncertainty in the planning system and energy markets.

The CBI said the investment would be essential to achieving a secure, sustainable and cost-effective energy mix including renewables, nuclear power and fossil fuels.

In a report No time to lose: Deciding Britain’s energy future, the organisation said uncertainty about the planning regime was making investors wary of committing to new energy projects.

The previous government set up the Infrastructure Planning Commission to decide on major projects, bypassing the system of local planning decisions and public inquires.

But the coalition is to abolish the IPC and replace it with a Major Infrastructure Unit, which will advise planning inspectors. The IPC’s decision-making powers would revert to ministers.

The CBI fears this will see the return of lengthy delays in planning permission for major energy projects that the IPC had been designed to avoid.

It called on the government to make sure that by next February it had tackled planning delays, speeded up the development of carbon capture and storage technology, and provided more detail on electricity market reform, renewable energy policy, and the implications of the emissions performance standard.

Deputy director-general John Cridland said: “Energy companies are unable to get the ball rolling on new infrastructure projects when it is unclear how the future planning regime will work.

“Uncertainty on plans for electricity market reform, slow progress on clean coal and nuclear power, as well as the cost of renewable energy are adding to the mood of caution among investors. We need investment from companies, not delays from government.”

The CBI said the promised Decentralisation and Localism Bill should “contain a coherent structure for major energy infrastructure planning, including requiring ministers to stick to decision making timescales set out in the Planning Act”.

It also wanted to see the second consultation completed rapidly on energy national policy statements on energy infrastructure, with the revised statements ready to be approved by Parliament by February.

On other energy matters it called for rapid action to name the first winner of carbon capture and storage demonstration project status, preparation for new nuclear power stations (including details on funding decommissioning of existing ones and waste disposal), and tax reforms for North Sea oil and gas.