Yesterday was 19 January 2017 and the last application for a nationally significant infrastructure project (NSIP) was made on 19 July 2016, exactly six months earlier. This is the longest gap between applications since the first application was made in August 2010.

There was a gap of 4 1/2 months between May and October 2015, but this gap exceeded that one at the start of December.

The big question is why? Here are some theories.

Electricity market reform taking time or not working

The last application for an electricity generation project was for the Wrexham Energy Centre on 18 March 2016, just over 10 months ago, and its examination closed yesterday. That means that no-one has sought to build something that will generate electricity of more than 50 megawatts of any type for getting on for a year – whether a gas-fired power station, nuclear power station, onshore or offshore wind farm, tidal lagoon, solar farm, energy from waste, biomass, nuh-uh. The only ‘new’ generation consists of things that were applied for before March 2010 and then granted, and are being reanimated, which can include varying them.

Only one new power station was allocated capacity in the December 2016 capacity auction, the repowering of an existing power station near King’s Lynn at 333MW, whereas 8GW-worth of new projects tried to get capacity. On the plus side, around 500MW of new battery storage won out.

Political events causing uncertainty

The three main political events of the last two years were the general election of May 2015, which arguably (at the time) ended uncertainty rather than causing it, the EU referendum of June 2016 and the US presidential election of November 2016, both of which certainly caused more uncertainty after them than before. The last gap of over four months was around the 2015 election, and only one application has been made since the EU referendum, for improvements to the M20 in Kent.

Uncertainty affects investment decisions and tends to make them more cautious, and this is undoubtedly one of the factors causing the slowdown. But people still need electricity, existing plants are getting older, and technology will only increase demand. Transport projects are more directly enabled by the government. It is all the more up to government policy to counteract the political uncertainty.

Changes to thresholds reducing the number of affected projects

Highway, railway and overhead line projects have had their Planning Act 2008 thresholds raised over the years and onshore wind has been removed altogether. The regime has been optionally extended to business and commercial projects and an element of housing but no applications have yet been made (and the housing provision has yet to be brought into force).

The net result is that fewer projects are required to use the regime, another factor leading to fewer applications than a few years ago.

Larger projects taking longer

The projects I am working on seem to be fewer but larger ones, which generally take longer in their pre-application stages. This is related to the next point.

Developers avoiding the regime with smaller projects

It could be possible that smaller projects, where their size is hovering around the threshold requiring use of the Planning Act regime, could be being deliberately designed to avoid the regime. This could be why only the largest projects, which cannot avoid the regime, are left.

There may be some truth in this but probably not for electricity generation. Gas-fired power stations are all well over the 50MW threshold, nuclear power stations even more so. Onshore wind is smaller but has been killed off by the government. Offshore wind tends to be larger. Solar is smaller (except in at least one case) and hydrolelectric power is rare in England (although there is one live NSIP hydroelectric storage application in Wales).

I would be interested in others’ views on why there are fewer applications. Something for (the government to get) the National Infrastructure Commission to think about, perhaps.