Residents living near new electrical pylons to receive up to £1,000 in bill reductions over the next decade
The Chancellor is set to announce the proposal in the upcoming autumn statement as part of the government’s push to accelerate infrastructure development.
Households living near new pylons and electricity substations will be eligible for up to £1,000 off their energy bills over a 10-year period in an effort to minimize local opposition to transmission infrastructure.
Chancellor Jeremy Hunt is anticipated to unveil the plan when he presents his autumn budget statement on Wednesday. The government aims to offer the discount to those residing closest to new pylons and electricity substations, but specific details on proximity requirements and funding sources for the discounts have not been clearly outlined.
The government is also expected to introduce measures to cut the approval and construction time for transmission infrastructure in half, reducing it from 14 years to 7 years. This includes a new premium planning service across England, guaranteeing faster pre-application services for major applications for a fee, with refunds available if the service standards are not met.
Low carbon energy infrastructure is set to be classified as a critical national priority, and the planning system is expected to prioritize the rollout of Electric Vehicle (EV) charge points.
A Treasury source stated, “Expanding the grid will unlock global investment for Britain and bring improvements for people across the country, with energy security that will keep energy costs down.”
Residential payments for individuals near overhead lines or other visible infrastructure were part of the proposals put forth by Electricity Networks Commissioner Nick Winser earlier this year. He also recommended a better visual design for visible infrastructure to make it more palatable to locals, as they are much more cost-effective compared to underground or offshore lines.
According to the report, new wind and nuclear power would be “wasted” unless the electrical grid has adequate capacity to transmit them.
However, smaller wind and solar farms require the national grid to connect multiple smaller cables to various power generation sites across the country, rather than using larger cables for a few large coal plants.
In Britain, “around four times as much new transmission network will be needed in the next seven years as was built since 1990,” according to Mr. Winser.
In his letter to the then-Secretary of State for Energy Security and Net Zero, Grant Shapps, Mr. Winser warned that if the grid isn’t upgraded in step with home-grown energy, not only would the power be “standing idle,” but customers would also face “very high” congestion costs.
The National Grid Electricity System Operator (ESO) manages electricity traffic by rewarding some energy generators with “constraints payment” to reduce their output when the grid becomes overloaded.
This approach is also intended to lower household bills. For example, when it’s “very windy,” the ESO can pay a gas power generator to reduce their output and make way for a wind farm, since it would be cheaper. However, this can’t be achieved if the wind farm isn’t connected to the part of the grid that requires energy.
Mr. Winser mentioned that the ESO anticipates that “even with optimal reinforcement of the grid, annual constraint costs could increase from around £0.5–1 billion per year in 2022 to a peak of £2–4 billion per year around 2030.”
