Chancellor Rachel Reeves wants to overhaul the process involved in pushing through major energy projects. But there could be other consequences.
As the war in Iran drags on without a ceasefire, and the Strait of Hormuz remains closed, Britain is bracing itself for a potentially seismic economic impact. Crude oil is now at an all-time high. Sanctions on Russian fuel stocks are being eased in a bid to alleviate some pressure on airlines ahead of the peak summer months, when jet fuel use soars. Supermarkets have — allegedly — been asked to consider applying price caps to basic goods.
There is currently little end to the stalemate in sight. So far, US President Donald Trump’s attempts to strong-arm negotiations with the leadership in Tehran have been nothing short of weak. A leaked Washington intelligence report shows the Iranian Revolutionary Guard has restored access and operational capabilities to much of its ballistic missile network, raising the threat to any vessel that dares brave the world’s busiest fossil fuel maritime shipping route unless they are offered — and pay substantially for — safe passage by the regime.
Analysts have already criticised a recent JP Morgan assessment for its overly-optimistic view that June will see the route reopen simply because of global market pressures. There has never been louder or more determined talk of energy independence across many parts of the world, and in some ways there’s a delicious irony that marks infamous climate sceptic and pro-polluter Trump as an accidental catalyst in expediting transition from oil and gas to renewables in countless countries.
Nevertheless, there’s a long way to go before this really begins to be felt, and overcoming local opposition to things like onshore wind farms and solar parks is always going to be a challenge. Hence the Chancellor of the Exchequer, Rachel Reeves, announcing today that the most important clean energy projects will soon be categorised as Critical National Infrastructure. This means that exposure to judicial review will be almost non-existent, apart from when a development is deemed to be infringing on human rights.
At the same time, a new ‘fixed legal window’ will be introduced for all other national signifiant infrastructure projects. This covers things like the newly resurrected HS2 rail line and forthcoming, urgently-needed overhauls to the UK’s ageing (and crumbling) water network. Examples which, combined, could point to a mid-term future of increased low carbon public transport capacity, fewer sewage spills and storm drain overflows, and big strides on the path to a net zero carbon emissions national grid.
‘This is a welcome and pragmatic evolution of judicial review reform. Speaking from experience, well-consented infrastructure projects can be exposed to legal challenges that add months of delay, increase costs and undermine investor confidence, without always materially improving the quality of decision-making,’ explained Nimoy Kher, Managing Associate in the energy team at law firm Sharpe Pritchard. ‘The reforms already introduced by the Government sought to rebalance the system towards genuine legal scrutiny rather than tactical obstruction.
‘These proposed next steps go further by recognising that, for a narrow category of nationally critical energy projects, certainty is itself a public good. Parliamentary authorisation and a structured challenge window could help surface legitimate issues earlier, protect democratic accountability and give developers and funders greater confidence to commit capital once consent is granted,’ he continued. ‘But the detail will matter, particularly in ensuring that communities still have a meaningful opportunity to raise legitimate concerns.’
Among those concerns is likely to be what the proposed fixed legal window, and reduction of judicial review, will mean for new data centres. The technology campuses are proving controversial due to their high energy and water consumption, with horror stories emerging from the US — home to more of these facilities than any other country on the planet — about entire communities losing pressure in their taps, resorting to building wells, and even being entirely displaced due to predicted power shortages.
The UK Government changed the framework for Nationally Significant Infrastructure in 2024, meaning data centres would be eligible for this status, circumventing traditional planning processes for industrial and commercial developments. Then earlier this year, these sites were given Critical National Infrastructure status, alongside energy, water, chemical manufacturing, defence, emergency services, food production, governance, healthcare, and transportation. A number of other communication technologies are also included, such wireless, wired and satellite telecoms, TV and radio broadcast systems, and the postal service.
‘It would be no surprise if these changes applied to Data Centres as well as energy projects, given the enthusiasm Government has shown for their approval,’ said Oliver Hayes, Head of Policy & Campaigns at Global Action Plan. ‘But it is entirely legitimate to challenge data centre approvals when they are pushed through with zero consideration of their enormous environmental harm. The fact that the UK’s first data centre Judicial Review resulted in Government admitting their own ‘serious logical error’ and suggesting planning permission — which they granted — should be quashed, only goes to show how essential it is to have proper scrutiny of these plans.’
Image: Domaintechnik Ledl.net / Unsplash
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