Why electricity pylons in Essex are the front line in the battle to hit net zero
In the narrow lanes around Aldham in Essex the countryside is close to the English ideal.
On an unseasonably warm mid-October day the fields recede to a low horizon, broken only by hedgerows and the spire of the parish church, the tallest landmark this side of Suffolk.
If National Grid has its way it won’t stay that way for long.
Aldham is on the route of a new pylon line that will run more than 110 miles, from Norwich to Tilbury on the Thames Estuary, carrying electricity generated on wind farms in the North Sea via high voltage cables suspended from 50-metre tall towers.
National Grid, the listed company that owns and runs the UK’s electricity network, says it’s crucial to a massive grid upgrade without which the transition from fossil fuels to low carbon power cannot happen.
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For locals and campaigners it’s an unnecessary intrusion that will bring steel giants marching through some of the most scenic countryside in the east of England.
This is more than just a local planning dispute.
It’s a story about the most important national infrastructure project you have probably never heard of; about a glacial planning system that fails communities and builders; and the balance between local and national interests as the UK strives to hit its climate goals.
The great grid upgrade
On the road to net zero Britain is like a traveller who remembered their laptop and adapter but forgot to pack the plug cable.
For years we have been preparing for a low-carbon future by focusing on supply and demand, without thinking enough about the bit in between.
While supply has focused on phasing out fossil fuels, chiefly using offshore wind power, consumer and business demand has begun shifting to lower carbon options like electric vehicles and heat pumps.
This has transformed not just where we get our power, but how much we will need.
Demand for electricity will double in the coming decade as natural gas, petrol and diesel are phased out and a world reliant on digital data consumes vastly more power.
The expansion of offshore wind and, in time, nuclear, will meet demand, but those new power sources need to be connected to a grid originally built for the fossil fuel age.
The bones of the national grid were built in the 1960s and 70s, connecting power stations largely clustered around the coalfields of the north and midlands to cities and towns using ‘motorways’ of high-voltage pylons.
With most of our power coming from the coast in the future that has to change.
National Grid has identified 17 new or upgraded lines required, including undersea cables to link Scotland and the east of England and several onshore pylon routes, the largest of which is Norwich-Tilbury.
It will cost up to £19bn and most of it has to happen in seven years to meet the government’s target of decarbonising the grid by 2030.
Carl Trowell, President of strategic infrastructure at the National Grid
“There’s no energy transition without a massive upgrade to the transmission system. It’s an enabler for everything we want to do,” said the man in charge of delivering it, Carl Trowell, National Grid’s president of strategic infrastructure.
“Over the next seven to eight years we’ve got to build five times more infrastructure than has been built in the last 30, so it’s quite an upgrade.”
Fight the power
For Adam Scott, owner of Church House Farm in Aldham, the great grid upgrade means three 50-metre pylons planted on his land, and £6,000 each in compensation.
“You would happily pay £6,000 not to have them,” he said.
“There are many impacts. You’ve got to go round them with machines, you can’t irrigate land near them, if we want to grow trees to help climate change we wouldn’t be allowed to, so there’s a lot of separate impacts the pylons will have if they arrive in our village.”
Sky’s Business correspondent, Paul Kelso with farmer Adam Scott in East Anglia
Mr Scott and residents along the entire route have been galvanised by perhaps the most effective local campaign group in the country, the Community Planning Alliance, founded and run by Rosie Pearson.
Dubbed the “Queen of the Nimbys”, a term she loathes, Ms Pearson has been hugely successful in helping community groups maximise their influence to oppose infrastructure projects, primarily housing.
She believes the pylons are unnecessary and should go under the sea, referring to rough drawings of an alternative offshore plan she says would be cheaper.
“We don’t see why the pylons should be built across East Anglia when the wind farms are offshore and the power is needed down south. It’s offshore, keep it offshore,” she said.
National Grid utterly rejects this, saying campaigners have misrepresented their figures and insisting an offshore route would cost £4bn as opposed to £1bn for the pylons, with consumers ultimately paying the difference.
“The first thing to say is that Norwich to Tilbury is part of a wider system, some of which is offshore and some onshore. Going offshore is four to five times more expensive, and it comes with its own environmental issues,” said Mr Trowell.
“And you can’t put all your infrastructure offshore. It takes hours to repair a pylon but it can take months to years to try and fix a problem or a fault offshore. Ultimately we have to strike a balance, and that’s what we’ve done.”
Local campaign groups oppose National Grid’s Norwich to Tilbury proposals
If the pylons are built, Ms Pearson says communities should be compensated for hosting in the same way as if Norwich to TIlbury was a train line.
Currently the grid, and the government’s electricity commissioner have said only that they should receive “benefits” from hosting infrastructure, such as cheaper bills.
“That’s patronising,” she said. “Full compensation needs to be paid to any farmer that’s having his business disrupted, any homeowner who can’t sell, any business that can’t run in the same way, not sweeteners.”
Planning problems
Where she and the grid agree is that the planning system is not working.
It can take a decade for major projects to pass through a system ill-designed to cope with the net zero infrastructure boom.
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De-carbonising Britain’s electricity grid
Rosie Pearson may have helped around 600 local groups challenge various building projects, but she rejects the accusation that they stand in the way of progress.
“I think people look at it the wrong way.
“The system creates the objector, the planning system even calls us ‘objectors’. If the system involved communities right from the beginning, presented them with options or alternatives, with facts and pros and cons, then you’d end up with decisions being made much faster.
“I can certainly say with this pylons campaign, if we’d all been consulted at the beginning we’d probably be working towards a better solution for everybody.”
For National Grid and other infrastructure developers the problem is a lack of clarity. Major planning decisions are guided by National Policy Statements, many of which are out of date and leave many decisions open to interpretation.
Sir John Armitt, chair of the National Infrastructure Committee and the government’s senior adviser, told Sky News they need urgent rewriting and regular updating.
“The process gets bogged down partly because there isn’t clarity of direction from the outset that enables an inspector to judge a project against the importance of the project to the nation, much more than to a locality,” he said.
“What we have to do over the next 20 years does require boldness, it requires clarity, it requires a sense of leadership and a sense that this is very important for our country in terms of the economy, our ability to grow jobs to spread that wealth around the country, our ability to compete.
“If we don’t make the changes to our infrastructure that’s necessary, we risk being left behind.”
The UK’s benchmark stock index has reached another record high.
The FTSE 100 index of most valuable companies on the London Stock Exchange closed at 8,505.69, breaking the record set last May.
It had already broken its intraday high at 8532.58 on Friday afternoon, meaning it reached a high not seen before during trading hours.
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The weakened pound has boosted many of the 100 companies forming the top-flight index.
Why is this happening?
Most are not based in the UK, so a less valuable pound means their sterling-priced shares are cheaper to buy for people using other currencies, typically US dollars.
This makes the shares better value, prompting more to be bought. This greater demand has brought up the prices and the FTSE 100.
The pound has been hovering below $1.22 for much of Friday. It’s steadily fallen from being worth $1.34 in late September.
Also spurring the new record are market expectations for more interest rate cuts in 2025, something which would make borrowing cheaper and likely kickstart spending.
What is the FTSE 100?
The index is made up of many mining and international oil and gas companies, as well as household name UK banks and supermarkets.
Familiar to a UK audience are lenders such as Barclays, Natwest, HSBC and Lloyds and supermarket chains Tesco, Marks & Spencer and Sainsbury’s.
Other well-known names include Rolls-Royce, Unilever, easyJet, BT Group and Next.
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FTSE stands for Financial Times Stock Exchange.
If a company’s share price drops significantly it can slip outside of the FTSE 100 and into the larger and more UK-based FTSE 250 index.
The inverse works for the FTSE 250 companies, the 101st to 250th most valuable firms on the London Stock Exchange. If their share price rises significantly they could move into the FTSE 100.
A good close for markets
It’s a good end of the week for markets, entirely reversing the rise in borrowing costs that plagued Chancellor Rachel Reeves for the past ten days.
Fears of long-lasting high borrowing costs drove speculation she would have to cut spending to meet self-imposed fiscal rules to balance the budget and bring down debt by 2030.
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They Treasury tries to calm market nerves late last week
Long-term government borrowing had reached a high not seen since 1998 while the benchmark 10-year cost of government borrowing, as measured by 10-year gilt yields, was at levels last seen around the 2008 financial crisis.
The gilt yield is effectively the interest rate investors demand to lend money to the UK government.
Only the pound has yet to recover the losses incurred during the market turbulence. Without that dropped price, however, the FTSE 100 record may not have happened.
Also acting to reduce sterling value is the chance of more interest rates. Currencies tend to weaken when interest rates are cut.
The International Monetary Fund (IMF) has warned against the prospects of a renewed US-led trade war, just days before Donald Trump prepares to begin his second term in the White House.
The world’s lender of last resort used the latest update to its World Economic Outlook (WEO) to lay out a series of consequences for the global outlook in the event Mr Trump carries out his threat to impose tariffs on all imports into the United States.
Canada, Mexico, and China have been singled out for steeper tariffs that could be announced within hours of Monday’s inauguration.
Mr Trump has been clear he plans to pick up where he left off in 2021 by taxing goods coming into the country, making them more expensive, in a bid to protect US industry and jobs.
He has denied reports that a plan for universal tariffs is set to be watered down, with bond markets recently reflecting higher domestic inflation risks this year as a result.
While not calling out Mr Trump explicitly, the key passage in the IMF’s report nevertheless cautioned: “An intensification of protectionist policies… in the form of a new wave of tariffs, could exacerbate trade tensions, lower investment, reduce market efficiency, distort trade flows, and again disrupt supply chains.
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“Growth could suffer in both the near and medium term, but at varying degrees across economies.”
In Europe, the EU has reason to be particularly worried about the prospect of tariffs, as the bulk of its trade with the US is in goods.
The majority of the UK’s exports are in services rather than physical products.
The IMF’s report also suggested that the US would likely suffer the least in the event that a new wave of tariffs was enacted due to underlying strengths in the world’s largest economy.
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The WEO contained a small upgrade to the UK growth forecast for 2025.
It saw output growth of 1.6% this year – an increase on the 1.5% figure it predicted in October.
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Economists see public sector investment by the Labour government providing a boost to growth but a more uncertain path for contributions from the private sector given the budget’s £25bn tax raid on businesses.
Business lobby groups have widely warned of a hit to investment, pay and jobs from April as a result, while major employers, such as retailers, have been most explicit on raising prices to recover some of the hit.
Chancellor Rachel Reeves said of the IMF’s update: “The UK is forecast to be the fastest growing major European economy over the next two years and the only G7 economy, apart from the US, to have its growth forecast upgraded for this year.
“I will go further and faster in my mission for growth through intelligent investment and relentless reform, and deliver on our promise to improve living standards in every part of the UK through the Plan for Change.”
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Run of bad economic data brings end to market turbulence and interest rate benefits as three Bank cuts expected for 2025
A week of news showing the UK economy is slowing has ironically yielded a positive for mortgage holders and the broader economy itself – borrowing is now expected to become cheaper faster this year.
Traders are now pricing in three interest rate cuts in 2025, according to data from the London Stock Exchange Group.
Earlier this week just two cuts were anticipated. But this changed with the release of new official statistics on contracting retail sales in the crucial Christmas trading month of December.
It firmed up the picture of a slowing economy as shrunken retail sales raise the risk of a small GDP fall during the quarter.
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That would mean six months of no economic growth in the second half of 2024, a period that coincides with the tenure of the Labour government, despite its number one priority being economic growth.
Clearer signs of a slackening economy mean an expectation the Bank of England will bring the borrowing cost down by reducing interest rates by 0.25 percentage points at three of their eight meetings in 2025.
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If expectations prove correct by the end of the year the interest rate will be 4%, down from the current 4.75%. Those cuts are forecast to come at the June and September meetings of the Bank’s interest rate-setting Monetary Policy Committee (MPC).
The benefits, however, will not take a year to kick in. Interest rate expectations can filter down to mortgage products on offer.
Despite the Bank of England bringing down the interest rate in November to below 5% the typical mortgage rate on offer for a two-year deal has been around 5.5% since December while the five-year hovered at about 5.3%, according to financial information company Moneyfacts.
The market has come more in line with statements from one of the Bank’s rate-setting MPC members. Professor Alan Taylor on Wednesday made the case for four cuts in 2025.
His comments came after news of lower-than-expected inflation but before GDP data – the standard measure of an economy’s value and everything it produces – came in below forecasts after two months of contraction.
News of more cuts has boosted markets.
The cost of government borrowing came down, ending a bad run for Chancellor Rachel Reeves and the government.
State borrowing costs had risen to decade-long highs putting their handling of the economy under the microscope.
The prospect of more interest rate cuts also contributed to the benchmark UK stock index the FTSE 100 reaching a new intraday high, meaning a level never before seen during trading hours. A depressed pound below $1.22, also contributed to this rise.
Similarly, falling US government borrowing has reduced UK borrowing costs after US inflation figures came in as anticipated.
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