Planning and regulatory delays can lead to jump in electricity prices and carbon dioxide (CO₂) emissions, according to a new study by the Economic and Social Research Institute (ESRI).
The think-tank published a new research bulletin on “the impact of planning and regulatory delays for energy infrastructure” on Tuesday. It analysed how regulatory delays impact electricity prices, system emissions, and costs.
It found that such delays can lead to a 10 per cent increase in electricity prices and a 4 per cent rise in CO₂.
The study stressed that these delays are separate from those associated with developers securing financing, or public opposition and planning appeals.
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The report recommended more frequent application windows for grid connection and subsidy support to reduce delays, as well as better co-ordination between regulatory bodies.
The think tank said recent reforms such as introducing biannual application windows and encouraging parallel regulatory processes “align with our recommendations”.
The group noted that “effective” planning and regulatory processes “ensure timely delivery of infrastructural projects”, such as electricity generation and transmission systems.
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However, it warned: “Decision delays can increase cost and, ultimately, reduce consumer welfare.”
The research asserted regulatory delays associated with the delivery of energy infrastructure have “substantial impacts” on electricity prices, system emissions, and system costs.
“We focus on how the organisation of the planning and regulatory processes affect these outcomes, as opposed to the content of the planning and regulatory scrutiny,” it said.
The group tracked hypothetical projects through the sequential steps of planning permission, grid connection, and the Renewable Electricity Support Scheme (RESS) as part of the study.
“This approach illustrates how the development time for energy projects is influenced by the organisational rules of the planning/regulatory processes,” it said.
The study found that extended decision times on the development of new renewable electricity generation leads to higher carbon emissions in the short term, as thermal power plants “must fill the gap”.
In terms of recommendations, it noted that many sequential processes are involved in the delivery of energy infrastructure, and so a delay in one process “can have a disproportionate impact on the overall timeline of delivery”.
“Until recently, applications for grid connection or subsidy support under the RESS scheme occurred annually, either in September or March,” it said.
“If developers missed one application window due to regulatory delay, a further year is potentially added to their project’s delivery time frame. More frequent application windows could reduce the incidence of such delays. We find that these gates should occur at least twice annually.”
In September, subsequent to the completion of the research, the Commission for Regulation of Utilities announced so-called gates for grid connection applications will occur every six months, beginning in 2025.
The ESRI said “enhanced co-ordination” between regulatory and planning authorities could aid project delivery, streamlining the entire regulatory process for large-scale energy developments.
“We recommend that applications for authorisations could occur in parallel, and better co-ordination between regulatory bodies could reduce the administrative burden on applicants and regulatory authorities,” the report said.
“Reforms enacted in September appear to better facilitate parallel application. This recommendation is consistent with earlier research calling for a one-stop-shop regulatory mechanism for large-scale energy project approval and the EU Commission’s recommendation under the REPowerEU plan to tackle slow and complex permitting for major renewable projects.”
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