‘Significant issues’ with government’s major energy schemes

The government has been told to address “significant issues” with the majority of its major energy-related projects.

In total, the Department for Energy Security and Net Zero (DESNZ) is responsible for delivering 19 major projects. Of those, the Infrastructure and Project Authority (IPA) has ruled that 13 have “significant issues [which require] management attention”, in its annual report.

Those include the smart meter rollout, the low cost nuclear programme and various home upgrade and green heating schemes (see full breakdown below).

The Replacement Analytical Project to provide essential services to operations on the Sellafield Site is the only DESNZ scheme to be given a red rating, meaning the IPA believes the “successful delivery of the project appears to be unachievable” and “there are major issues with project definition, schedule, budget, quality and/or benefits delivery, which at this stage do not appear to be manageable or resolvable”.

In the Sellafield context, “analytical services” refers to the “statutory and regulatory requirement to assess and subsequently categorise the chemical and/or radiological properties of hazardous material across the site”. Once correctly categorised, this waste material can be safely and efficiently prepared for long-term disposal and storage in a future geological disposal facility.

While the analytical replacement scheme has been given a red rating, the IPA deemed the ongoing nuclear waste storage scheme as green.

It is one of only three DESNZ schemes to have been given a green rating, meaning “delivery of the project [is] on time, budget and quality appears highly likely and there are no major outstanding issues that at this stage appear to threaten delivery significantly”.

The other two schemes include the SIXEP Community Plant project and phase three of the Local Authority Delivery scheme to provide low-carbon upgrades to households.

An additional two projects – Sizewell C and the development of carbon capture and storage – are exempt from assessment due to commercial sensitivities.

The assessment of DESNZ’s projects is in line with the IPA’s assessment of all major projects being delivered by government departments.

In total, the IPA assessed 244 projects with a total whole life cost of £805 billion. Out of the 244 projects assessed as part of the 2022-23 annual report, 25 projects were rated green, 23 projects were assigned red, while 183 projects were rated amber.

Among other projects assessed by the IPA, the National Underground Asset Register (NUAR) was also given an amber rating.

Writing in the foreword to the IPA report, Cabinet Office minister Baroness Neville-Rolfe says: “The scale and impact of inflation has been significant on the construction sector and wider industries. It has undoubtedly brought about challenges in terms of delivering to plan and to budget, for both government and industry.”

IPA chief executive Nick Smallwood adds: “We must maintain a strong delivery record that demonstrates real value through benefits realisation. So, it is essential that both government and industry are aligned to a shared vision.

“At a time of rising prices, particularly in construction, innovation is key to saving money in the long term, and part of the wider government ambition to drive economic recovery.”

IPA assessment of DESNZ major projects: