Reform’s very expensive pylon plan

Why forcing transmission lines underground would leave households paying more

Nigel Farage’s Reform are neck and neck with Labour in the polls. Some pollsters (YouGov and FindOutNow) even have Reform top. The next election is a long way away, but there is now a serious possibility that Reform could form the next Government. So it’s time to take their policies seriously.

In a major speech last week, Reform’s Deputy Leader Richard Tice set out the party’s plan to ‘scrap net stupid zero’. Highlights included a plan to ‘tax a subsidy’, selectively apply inheritance tax to farmers who have ‘taken the renewable pound’, and a ban on grid-scale batteries ‘until we can prove they are safe’.

The latter two policies are ironic because Rupert Lowe (one fifth of their parliamentary contingent) both owns a battery company and has installed solar panels on his farm. One wonders if they consulted him or if it was a deliberate attempt to clip his wings after Elon Musk briefly touted him for leadership. If it’s the latter, expect future policies to include a £10,000 tax on asking Parliamentary Questions (Lowe asks more than anyone else) and an amendment to the Football Governance Bill to bring in the death penalty for mismanagement of Southampton FC.

The most significant policy announced by Tice was a requirement that all new transmission lines built by the National Grid be buried underground. In essence, they want to ban pylons. Reform’s powerbase is in the East of England (Essex, East Anglia, and Lincolnshire) and also happens to be where the largest transmission projects will be built over the next five years.

Reform isn't the first to call for pylons to be buried underground, but what sets their policy apart is their plan to force National Grid to tear down existing recently-built pylons and bury the cable underground. And if they don’t, they’ll be banned from paying out dividends. Put simply, it’s a threat to the National Grid. Stop what you’re doing now, or we’ll take a hammer to your balance sheet in five years time when we’re in power.

Many opposition parties are often criticised for announcing unfunded policies. To be fair to Tice, Reform aren’t guilty of that. Their pylon policy has a clear funding mechanism. Like all grid spending, it’ll appear on household energy bills. It is, in essence, a poll tax on every household in Britain.

And let’s be clear. This is an extremely expensive policy. In the next five years, National Grid has been tasked by the National Energy Systems Operator with building roughly 620 miles (1000km) of new transmission lines onshore. And for those who ask “Why can’t they do it offshore?” The answer is: they are. National Grid will build 4,500km of transmission offshore. In fact, they’re building as much offshore as possible. The issue is we need to take the power to where people live and, with a few exceptions (e.g. North Sea oil riggers), most of us live on land.

How much does it cost to add 620 miles to the network? It depends. If you build it above ground using overhead wires and pylons, the Institution of Engineering and Technology (IET) estimates it costs between £2.2m-£4.2m per km. In other words, the onshore grid built to hit the Government’s 2030 Clean Power target could cost between £2.2bn to £4.4bn. That’s a lot of money – paid for by our energy bills – but there’s a benefit too. At the moment, our lack of grid infrastructure means wind farms are paid to switch off when it’s windy because the grid can’t take enough power from where it’s produced to where people live. Last year, British bill payers paid over £1bn to do this and with more renewables coming online in places like the North Sea this figure is only going to rise (unless we fix the grid).

So what if we adopted Tice’s plan today. Well, the IET estimates the cost of burying cable underground is around five times higher at between £10.2m to £24.1m per km. So for the 620 miles or so of new onshore transmission in National Grid’s pipeline, we are looking at a cost of between £10.2bn and £24.1bn.

In other words, the best case scenario for Reform’s plan (i.e. the upper estimate for pylons and lower estimate for underground cables) is one where households collectively end up paying £5.8bn more. That’s £200 for each and every other household in the country.

That’s the best case scenario, the worst case scenario (i.e. lower estimate for pylons and higher estimate for burying cables) would cost a whopping £21.9bn (£782 for every household in the land).

That’s the extremes. More recent briefings from the IET suggest the lower-bounds for both may be a more realistic estimate (i.e. £2.2m per km for overground and £10.2m per km for underground). This would mean Reform’s plan would add £8bn to household bills. That’s £280 for every household in Britain.

In his speech Reform’s Richard Tice asserted that there, in fact, wasn't a trade-off. He claimed that the National Grid itself admits that burying cables costs the same as putting up pylons. This is, to be frank, misleading.

Tice is referring to a report from the now-nationalised Energy Systems Operator. Their East Anglia Network Study found that any delay to delivering grid infrastructure in East Anglia before 2034 would lead to consumers paying £1bn for their energy bills. The cost comes from paying the offshore wind farms off the coast of East Anglia to switch off when it's too windy because the grid is at capacity. This figure itself is now out of date with more offshore projects now coming online to meet the Clean Power 2030 target.

The East Anglia Network Study covered a number of options. Pylon opponents point to the fact that option three (overground) and option eight (underground) would cost roughly the same amount. But that’s not an apples-for-apples comparison. The underground option only delivers 4GW of grid capacity, while the overground option delivers 6.9GW of capacity.

And a major reason why pylons and undergrounding cost the same in the East Anglia study is that National Grid assume that planning delays mean that it will take four years longer to deliver pylons than undergrounding. If reforms to the planning system mean that pylons can be delivered in 2030, then pylons are indisputably cheaper.

Regardless, National Grid have since done a more detailed analysis of the capital cost of their Norwich to Tilbury project and found that burying the cables would cost almost £6bn while using pylons would bring the cost down to under £1bn.

I’ve been talking as if Reform were able to implement their policy tomorrow, but of course they aren’t. National Grid, with a strong steer from the Government, will go overground in the vast majority of cases. If Reform enters office at the next election (a serious possibility), then most of the infrastructure will be built already.

Reform would then order National Grid to tear down all the pylons put up in the last five years and bury the cable underground. In other words, Reform would insist on a £10.2bn (not taking into account the cost of demolition) infrastructure splurge. Yet unlike most infrastructure projects, there would be no actual benefits for the vast majority of Brits. Some farmers in Lincolnshire and East Anglia admittedly would get a slightly nicer view, but it’s not all good for them. In the short-term, they’d have to put up with extensive building work near them to tear down the pylons and dig up the earth to bury the cables.

Richard Nixon once remarked “We are all Keynesians now.” Tice seems to be a particular fan of the passage arguing that in a recession, the Government should pay people to dig holes and fill them up again.

Reform, to their credit, are not opposed to all low-carbon forms of energy generation. In the post-speech Q and A, Nigel Farage declared that nuclear power was the future, while party chair Zia Yusuf appears serious about removing the regulatory barriers that SMR developers face. Yusuf has even referenced Britain Remade’s nuclear cost comparison.

Yet while nuclear requires less grid infrastructure than decentralised and intermittent renewables, the level of nuclear buildout Britain needs to meet growing electricity demand from EVs and data centres will require new powerlines. Forcing them to be buried underground will push up costs for new nuclear plants and new data centres. Likewise, more than anything, nuclear needs a political environment where spurious safety concerns can’t be used to load on regulation after regulation. Can you really square deregulation of nuclear with banning batteries of safety grounds?

Reform’s pylons policy would push up the bills of every household in Britain by hundreds of pounds to benefit a very small number of homeowners in rural East Anglia. This isn’t the vote-winner they think it is.