UK's Planning and Infrastructure Act 2025: Infrastructure Aspects

What's the Background?

The English planning system has a two-tier approach to planning consents for infrastructure. NSIPs are designated by the government and are subject to a specific consenting regime, the DCO process, where the decision is taken by a government minister following a report by an independent examining authority. DCOs have a very high approval rate, but the process is often laborious; the government estimates that in 2024, it had taken on average 3.6 years for projects to secure a DCO.

The route for obtaining planning consent for infrastructure projects that do not fall within the NSIPs regime (whether because they are not within a class of designated infrastructure or because they do not meet a specified size threshold) is generally through a planning application. These applications are almost always determined at first instance by local planning authorities. Although that process is generally quicker than the DCO process, local opposition to infrastructure development can lead to more refusals being issued as compared to the DCO process.

The government aims to support infrastructure delivery and to increase the speed of that delivery.

What are the Key Changes Introduced by the Act?

Flexible consenting routes for NSIPs. From a date to be confirmed, the Act will allow the secretary of state to direct that a NSIP can be the subject of an alternative consenting regime rather than having to obtain a DCO. This can be done at the request of the developer. So, if a NSIP developer is confident that its project has the support of the local authority and is therefore likely to achieve planning permission more quickly than it could obtain a DCO, the developer may ask the secretary of state to proceed along the planning application route. Based on the current supportive stance of the government toward infrastructure, it is difficult to see the secretary of state refusing such a request if the local authority is also supportive. So infrastructure developers would gain flexibility to opt out of the DCO route.

Streamlining the DCO process: Removal of statutory requirement for pre-application consultation. For those NSIPs that will still require a DCO application, the DCO process will be amended (from a date to be confirmed) to remove the statutory requirement for developers to consult with stakeholders at the pre-application stage. This could save considerable time; the government's press release for the Act states that this reform, taken together with other reforms, will speed up NSIPs by 12 months on average—and cost from a developer's perspective.

The secretary of state will issue guidance (awaited) as to best practice on pre-application engagement with affected parties in the absence of this statutory requirement, and the government has stated that it "still expects[s] high-quality early, meaningful and constructive engagement and consultation with those affected by NSIP proposals". Developers will be required to have regard to that guidance but will not be legally required to follow it, though.

Long duration electricity storage is supported. Ofgem will establish and operate a scheme to encourage the development and use of long duration electricity storage ("LDES") installations—i.e., installations which: generate electricity from stored energy; have a minimum generating capacity of 50 MW; and can generate electricity at its full capacity for a continuous period of at least eight hours. These systems help balance the supply and demand of electricity, especially when using renewable energy sources like wind and solar, which can be unpredictable. 

Ofgem will be required to establish the scheme as soon as reasonably practicable after 18 February 2026. Ofgem has already confirmed that 77 projects have been selected for the final assessment stage of a process which will determine which projects will receive the "cap and floor" investment support from this scheme, with the decision on the successful projects due to be made in summer 2026. Ofgem's September 2025 press release states that the cap and floor regulatory scheme will support the chosen LDES projects in the following way:

Cap: The cap is a quid pro quo arrangement that sets a maximum revenue and will see projects pay money to consumers if they end up making more than is considered a fair rate of return on invested capital. 

Floor: This is the minimum revenue provided to the project. If the project's revenue falls below this floor, consumers will pay the LDES operator the difference up to the floor level.

Electricity infrastructure: Consumer benefits payment scheme. The Act gives the secretary of state the power to make regulations (awaited) establishing a scheme whereby local residents will be entitled to financial benefits provided (directly or indirectly) by electricity suppliers. This will apply where electrical plant or lines are constructed, expanded or improved above ground as part of the electricity transmission system in that locality (the government's press release for the Act refers to "within 500 metres of new pylons"). In effect, local people will be offered discounts on their electricity bills to make the presence of electricity infrastructure more palatable.

Electricity connections. As part of the government's Modern Industrial Strategy, a new "Connections Accelerator Service" was announced to prioritise earlier connection to the electricity transmission and distribution networks for strategic demand projects. Strategic demand examples include data centres in AI Growth Zones and other kinds of large-scale projects with high electricity demand, such as steel production, backed by inward investment which create high-quality jobs.

However, existing licences under the Electricity Act 1989 prohibit undue discrimination between users, so the Act allows for re-ordering of the connections queue to give priority to strategic demand. The secretary of state will have broad powers to direct Ofgem to modify electricity licences and other agreements (including specific connection agreements) to facilitate earlier connections to the electricity networks, including modifying the connection agreements of other parties—whose projects may have to be postponed, making room for the strategic demand projects to connect early. The powers will even allow for parties to be removed or added to (or for a party to be discharged from its obligations under) a connection agreement.

The Act establishes a consultation process for any proposed modifications to licences or agreements. It also requires NESO (as the Independent System Operator and Planner), in managing connections to the transmission grid, to have regard to strategic plans and documents designated by the secretary of state under regulations (awaited).

Looking Ahead

These changes will be welcomed by infrastructure developers, but some of the detail is yet to be published and will follow via guidance and regulations over the coming months. Strategic demand developers stand to benefit from the electricity connection provisions, though these create ongoing uncertainty around the connections date for projects which are not strategic demand and which are located near a strategic demand project.