The second national infrastructure assessment (NIA2): A resilience roadmap for the UK’s economic infrastructure
The Second National Infrastructure Assessment (NIA2)1 was published by the National Infrastructure Commission (NIC) on 18th October. In the five years since the publication of the first assessment2 it would be difficult to overstate the significant disruption and shocks to the economy that we have faced in the UK – not least the global pandemic, global conflict and on-going cost of living crisis. As such, the second assessment is both timely and needed; but it is not groundbreaking – and nor should it be. It rightly builds on its predecessor and provides some key policy directions considering recent occurrences.
The assessment covers all economic infrastructure sectors, setting out recommendations for transport, energy, water and wastewater, flood resilience, digital connectivity, and solid waste. While some significant progress in the last five years is noted with respect to energy (the shift to renewables and electric vehicles) and digital connectivity (gigabit capable broadband rollout), the UK continues to fall behind our competitors for transport connectivity (particularly urban transit) and is failing to reduce emissions in the solid waste sector.
The climate crisis and decarbonisation sit at the heart of the assessment, and one of the key messages underlying it is the need for urgency and a pace of change. To deliver future-ready infrastructure to support our prosperity the UK needs to act now – make some big decisions and deliver against them. Our Futures commitment – sitting across Energy, Water and Communities – is fully aligned with this thinking and the three strategic opportunities identified in the assessment.
In terms of future energy and the transition roadmap, the assessment is focused on energy transition, security, and market stability – influenced by the ongoing cost of living crisis. Alongside setting out targets for generation to enable viable technologies to have a route to market, and for large scale hydrogen storage by 2035, two recommendations stand out.
Firstly, the development of a strategic energy reserve sufficient to generate 25TWh of electricity to support resilience to economic shocks. Initially this will likely be in the form of natural gas but transitioning to hydrogen storage in the long run. While adding two per cent to the average energy bill, the resilience will remove the potential for major spikes in cost and maintain more control within the UK’s hands. Alongside this the role of hydrogen in decarbonising heat is rejected by the commission.
Secondly, the development of new hydrogen and carbon capture and storage networks to support the economy. This is a major recommendation connecting the UK’s main industrial hubs and supporting their energy transition plans, balancing economic prosperity with promoting their net zero roadmaps. The energy transition required by the UK will impact all parts of society and it is important that this transformation is facilitated in a just and fair way, particularly when it relates to major industrial hubs.
The key challenges outlined by the assessment with regards to water are resilience to flooding and managing drought. Tackling the future of water in the UK involves building resiliency outcomes into the regulatory framework now, targeting the reduction of households at risk of flooding, delivering additional water supply, and improving demand management while also maximising the resilience of existing critical infrastructure.
Water risk, namely flooding, drought and storms, is estimated to cost the UK approximately $153 billion USD over the next two decades.3 Given that the investment needed to protect against this risk sits with the private sector, the importance of establishing the right regulatory framework is paramount. To co-manage the resiliency and sustainability of the water sector, what is also clear is that Nature-based Solutions (NbS) needs to be at the heart of plans today and into the future to help the water sector transition towards net zero and nature positivity.
As EMEA Future Communities lead, I was encouraged to see that the assessment also takes into consideration the impacts on communities and how it sees the recommendations help improve quality of life for UK citizens now and in the future. The roadmap to decarbonisation and better infrastructure involves significant investment, and particularly given the recent cost of living crisis issues, the question of affordability and social inclusion loom large. Whilst there is no single policy area – including infrastructure policy – that can singlehandedly ‘level up’ a place, the assessment’s focus, and advice regarding not only support, but the more immediate acceleration of economic productivity in areas within the UK government’s competence, is positive.
What is clear is this investment is needed to improve UK growth and productivity which has been stagnant for too long – a trend likely to continue without necessary investment now to prepare us for the future. However, what underpins the potential benefits is improved resiliency of our economic infrastructure and protecting consumers from external shocks. In the longer term this translates into lower household costs, although the implication is household costs will remain high in the short term.
The final message left is one of urgency. We need to act now to prepare the UK’s future economic infrastructure. As a leading professional services company operating across global water, energy, property and buildings, and transportation markets, GHD is well positioned to help the public and private sector in navigating the outcomes of the NIC’s assessment and supporting the development of more productive economic and physical infrastructure in the UK. What the next five years holds for UK communities, businesses and government is yet to be seen, however bold decisions are needed, and leadership needs to be shown across the infrastructure sector at all levels to support communities now and for the next generation.