Britain is heading for an energy crisis with generating capacity only just matching peak demand according to the ICE’s latest State of the Nation report. Mark Hansford examines the detail.
The ICE this week urged the government to plug Britain’s energy gap and develop an effective planning system.
Speaking at the launch of the ICE’s annual State of the Nation report its steering group chairman David Orr said energy and planning were the top priorities for the new government.
“Our top line concerns are Britain’s energy gap and the planning of major projects,” said Orr.
Energy and local transport were awarded a grade “D”, the second-lowest possible score in the report. This indicates that below standard and poorly maintained infrastructure in these sectors could adversely affect the national economy.
Flooding rated “C”
Flood risk management and waste and resource management scored a “C”, indicating that current infrastructure is at capacity and that significant investment is needed to meet demand in the next five years.
Strategic transport networks and water and wastewater scored a “B”, suggesting that they are adequate for now, but that investment is still needed between now and 2015.
However, energy infrastructure came in for strongest criticism, with the report saying that the government had to take “urgent decisions on nuclear power, renewable energy and carbon capture and storage”.
With 11GW of coal and oil power capacity closing within five years, and a further 7GW of nuclear plant coming offline by 2018, maximum electricity supply is already very close to peak demand, said the report.
The ICE wants the government to create an energy delivery plan that sets out clear timelines for government action. It wants the plan to also include a programme of active engagement with asset owners, infrastructure suppliers and sources of finance.
Local transport was also slammed. “Local roads are generally in poor condition and are congested in town and city centres.”
“It’s no secret that some very tough choices are going to have to be made as we learn to live within our means”
Paul Morrell, chief construction adviser
“Finding two crucial sectors - energy and local transport - to be ‘at risk’ is very worrying for the nation’s future development and productivity,” said Orr.
He accepted that funds will be limited and that much of the investment will have to be provided by the private sector.
Government help sought
He called on ministers to help by giving confidence to investors through clear direction and leadership.
Chief construction adviser Paul Morrell, also speaking at the launch, agreed that balancing public and private investment was one of four major issues ahead.
“It is common ground that there is work to be done bridging the gap between what makes a good business case and what attracts funding.
“And that bridging has to come from government,” he said.
Morrell and Orr both stressed the key role that the government facilitating body Infrastructure UK (IUK) had to play.
It has been tasked with developing a long-term strategy for infrastructure investment and with facilitating private sector funding streams.
“It’s all very well us banging on about things like the energy gap, but we need a plan - which is why we so strongly support IUK,” said Orr.
“Let’s face it, if the government works in three year Comprehensive Spending Review cycles, that’s no good for infrastructure where it takes 10 years to get from the drawing board to the minister cutting the tape.”
ICE President Paul Jowitt also stressed the need for long-term planning.
“Infrastructure is vital to our way of life. It is vital to society. It is vital to economic growth in an increasingly competitive world. It is vital to the environment and it is vital to the very existence of a civilised society.
“We are currently going through a fragile recovery in the aftermath of the global financial crisis.
“So, in these austere times, can we afford the investment in the nation’s essential infrastructure?
“More to the point, can we afford not to?
“The consequences of infrastructure failure - both economically and socially - will be far more costly than making the necessary investment in infrastructure now,” he said.
“Infrastructure lifetimes are 25, 50, or even 100 years. We are living on these assets now, and now is the time to invest in the infrastructure we need for the future.
“Asset lifetimes of 50 years do not fit easily with electoral and financial cycles of five to 10 years, but we must find a way to reconcile these without cutting vital infrastructure investments.
“Now is the time to do that,” he said.
Morrell agreed with Jowitt, and added that there was a need for more “engineering advice” in government as it makes its “tough choices”.
These include getting the right balance between providing new infrastructure and maintaining existing public assets, identifying the difference between the obvious areas where investment is needed and those - like utilities - where the case for spending is harder to make.
It also involves addressing the low carbon agenda despite fiscal pressures.
“It is no secret that some very tough choices are going to have to be made as we learn to live within our means while maintaining growth and a proper level of public services,” said Morrell.
“One watchword over the coming months is therefore going to be “priorities”.
“The vital importance of physical infrastructure in keeping society energised and on the move, in providing less obvious (but no less important) public utilities, in managing risk, and in supporting economic growth and attracting inward investment is, I believe, fully recognised in government.
“What is more difficult is to identify priorities in a tough spending round.
“This has to start with engineering, and the State of the Nation series is a hugely valuable contribution to the thinking now required to confirm those priorities, making visible the state of systems that are often too invisible to proclaim their own importance,” he said.
How each sector is performing
Energy | ICE grade D
The energy sector (graded D) gave the most cause for concern, in light of the massive challenges it faces to ensure security of supply in future. In particular the report notes the need to urgently address the lack of spare capacity, with maximum supply currently very close to peak demand. It stresses that in the next five years the government must make crucial decisions on renewable energy sources, nuclear power stations and technologies that can make fossil fuel power generation cleaner if we are to keep the lights on. This includes carbon capture and storage.
Transport | ICE grade B
Local transport is deemed by the report to be “at risk”, with far too much dependence on private car travel, while local roads are in “poor condition”. An increasingly large maintenance backlog, worsened by the severe weather last winter, would make any funding cuts disastrous. The report called for local public transport networks to be improved, in terms of capacity and integration with national networks. This would encourage a shift from private cars to other transport modes while enabling local roads to be brought up to a satisfactory standard through adequate funding and better asset management.
Water | ICE grade B
Twenty years of regulator-driven investment means water infrastructure is generally working well. However, major reductions in demand are needed to bring it into line with long-term carbon emissions goals.
Strategic transport networks
ICE grade B
Generally good condition,
however some form of demand management is needed to manage limited road capacity.
Waste | ICE grade C
Our entire approach to waste must change. The waste industry should be looking to become a supplier - of fuel, compost and manufacturing materials. It is also imperative to reduce the waste going to landfill to avoid infraction fines from the European Union.
Flood risk management
ICE grade C
Current investment in flood risk management must continue although in the long-term our approach must change dramatically.
What the ICE grades mean
A FIT FOR THE FUTURE
Infrastructure is well maintained and in good condition. There is excess capacity. There is clear strategic leadership with good plans to develop the sector to meet the needs of the next five years.
B Adequate for now
Infrastructure is in acceptable condition with a reasonable maintenance regime. It can meet
current demand across the network. However, investment will be needed to meet needs in the next five years.
C REQUIRES ATTENTION
Infrastructure is infrequently maintained and requires attention.
There is no excess capacity resulting in deficiencies at peak periods. Significant investment is required to meet needs in the next five years.
D AT RISK
Infrastructure condition is below standard and poorly maintained. In the absence of significant investment there may be an impact on the national economy.
E UNFIT FOR PURPOSE
Infrastructure is in unacceptable condition with little maintenance.
There is insufficient capacity and resilience is of serious concern.
The state of the infrastructure is
impacting on the national economy.