My Lords, my intention in tabling this amendment was to draw the Committee’s attention to the need to plan for very timely electricity distribution investment to supply the needs of the City of London, and indeed central London generally.
The amendment is backed by a considerable amount of research commissioned by the City of London Corporation on future power supplies for the capital. Some pretty high-level discussions have also taken place in an electricity regulation working party, which includes Westminster City Council, London First, the Greater London Authority, the Mayor of London’s working group, the City Property Association and Westminster Property Association—it is an impressive array of sources. The message that they have all delivered is that long-term strategic planning needs to be enhanced to ensure new electricity connections to key development sites in central London, and that this must be available as projects are completed.
To give that assertion a little context, some office developments in the City have extremely large electricity requirements, which can take the electricity network operator for London, UK Power Networks, up to three years to plan and build. The problem that my amendment is intended to address is that the City of London Corporation has been advised in discussions with Ofgem that the regulatory framework actually prevents strategic investment ahead of need; in other words, when it comes to electricity supply, it is very much a question of providing for what is currently required as opposed to what is going to be required.
It would be quite wrong for me to give the Committee the impression that I think that the need for forward planning is somehow not accepted by the Government; of course it is. There has been a very productive exchange of correspondence, of which I have seen all the copies, between the City’s policy chairman, Mark Boleat, and my noble friend Lord Deighton, Commercial Secretary to the Treasury. The City has a way of going to the top. I entirely accept that we must avoid a situation in which supply need is assessed by reference to purely speculative projects which do not come to fruition. But to have a situation in which forward planning is so legislatively constrained seems to lean too far in the opposite direction.
My Amendment 53ZA proposes that electricity capacity regulations under Clause 21 should include provision that takes account of projected as well as existing needs. It gives 10 years as the forward planning period, which is based on technical advice. It is a halfway point in the 20-year horizon that is generally adopted by the Mayor of London’s London Plan, which deals with planning and development as well as other high-level strategic matters, but it is certainly a timeframe that should enable the necessary electricity distribution facilities to be planned and built.
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In speaking to the amendment, I understand entirely that the solution is not straightforward. A sufficient and timely supply of electricity is, however, an important practical element in attracting new firms to the City and, indeed, to London’s business sector more widely. I hope that my noble friend will tell us how the issues
are to be addressed and will be able to indicate that there could be greater flexibility in the system. As things stand, it is clearly not satisfactory. That is the perception of those who have taken part both in the research to which I referred and in the consultations. Looking forward to my noble friend’s reply, I beg to move this amendment.