Examination of Witnesses (Questions 180
WEDNESDAY 6 FEBRUARY 2002
180. So that is your real solution?
(Dr Count) That is my real solution.
181. A proper emissions trading system worldwide?
(Dr Count) Yes, and then it may be more efficient
for us to invest in insulation at the retail end rather than expensive
production, so that may be a much better use of our capital. That
cannot happen overnight but ultimately if you are treating sustainability
as a cost burden on the industry rather than an opportunity for
smart people to do well out of it, it does not have the centre
stage that it deserves.
182. Can I move on to the relationship that
you have with the different government departments? There has
been a reorganisation within governance. I understand that whoever
it was who was in charge of energy policy at the DTI has now moved
on. Would you tell us a little bit about the quality of the relationship
that you have with DTI, with DEFRA? You mentioned in your evidence
about the importance of having targets regionally. I am linking
that to planning targets as well, relationships with the regional
development agencies. You have mentioned joined-up government
a few times; how you see the different government departments
(Dr Count) Mike will deal with the planning issues.
I believe we have good relationships. Anna Walker, who was very
influential in the DTI, has moved to DEFRA. That obviously means
a little bit of dislocation. Whilst we have the relationships
we are confused about how some parts of energy policy rest with
DEFRA and some parts of energy policy
183. But which parts, in respect of sustainability?
(Dr Count) CHP, sustainability, and ultimately the
environmental regulation rests with the Environment Agency.
184. Why are you unsure about
(Dr Count) No. Ultimately they rest with DEFRA and
ultimately DTI has coal policy. We are a little confused about
where the driver is for the PIU. Now we are at number ten on the
energy review and we would like to see a single one-stop shop
for the energy industry. That would be a much simpler process
185. Greenpeace have recommended that there
should be a sustainable development unit. Would you go along with
(Dr Count) I think creating another unit then means
we have three stops. I would like to see a single energy base
which has in the heart of it the basic policy issue of sustainability,
economics and everything. I am probably against creating another
unit because we cannot sort out the
186. But you would not be in favour of amalgamating
what there is already?
(Dr Count) I would be in favour of amalgamating the
187. Across departments.
(Dr Count) The two departments span the energy industry.
Let us have one of those departments having the energy industry
there in the entirety of it.
188. What about DTLR in respect of planning
and targets and measurement of and how those targets are met?
(Dr Count) I think the policing of it can be outside
but planning is a difficulty we have.
(Mr Bowden) You mentioned planning.
189. You have mentioned it in your submission.
(Mr Bowden) Yes. National Wind Power is a wholly owned
subsidiary of ours. It is the largest wind generator in the UK.
Their experience on the planning front is most informative. Their
experience is that generally they get positive planning feedback
and decisions from local communities. It is when the issue goes
beyond the local to the regional and beyond that it gets difficult.
It is the time that is taken to get through the process. We fully
understand and acknowledge that due process has to be gone through
and there is no one right answer to what amounts to due process.
I will just point out one example and, given the pronunciation
problem that is just about to confront me, I am glad that Mr Thomas
has left us. I believe the wind farm, which is known as Gelligaer
in Wales, is a 20-megawatt site. The application for planning
was submitted in July 1999. There was a substantial majority in
favour of the application at the Merthyr Tydfil Borough Council,
March 2001. I do not think we would have too much to say about
that gap. The issue was called in by the Welsh Assembly. We were
told last month, January 2002, some 20 months after the initial
application, that a public inquiry would be called and we would
estimate that that is another one to two year delay. That is an
astonishingly long time and the sort of length of process that
is bound to impact on a developer's initial decision as to whether
to approach an application in the first place.
190. Are you therefore adding a further dimension
to this issue about joined-up government, saying that it applies
as much to the Scottish and Welsh Parliaments?
(Mr Bowden) It is across the patch. It is due process
but also the efficiency of process and the joined-upness of process.
(Dr Count) It is much quicker for us to get planning
in Scotland than it is in England and Wales, considerably so,
and especially as we read a policy document in which the Government
said it was for the local community to decide. We have had two
or three occasions where the local community has definitively
decided they want something and yet the Government authority have
said, "We will have a public inquiry". Why? It is not
counter to Government policy here. I thought we were trying to
push on an open door.
191. Why is it so much faster in Scotland?
(Mr Bowden) All I can say is that our experience is
that the Scottish Executive and the planning authorities are more
proactive. I do not think there is any suggestion that there is
not due process in Scotland. It is just a more streamlined process.
(Dr Count) Perhaps they are working off the same agenda.
(Mr Bowden) I cannot explain why that should be.
192. Have you spoken to the National Assembly
for Wales about their policy towards wind farms?
(Mr Bowden) I am sure our subsidiary has done in great
193. Are you aware of any particular difficulty
that exists for them? I think you have got a particular problem
(Mr Bowden) We are struggling to understand what the
issue is. Once one understands the issue there is a prospect of
management doing something about it. At the moment there is a
sense of frustration over the time period and I am not sure we
have any clear understanding as to what the underlying issues
(Dr Count) We can write a note. We do not have any
details of meetings but our wind power people have had prolonged
Ian Lucas: I represent a Welsh seat, Wrexham,
and I would be interested to know.
194. Can you do a note for us?
(Dr Count) We can do a note on that.
195. In the absence of our colleague, Mr Savage,
who has given his apologies to our meeting day, it would be very
helpful to have that comparative view of England, Scotland and
Wales. Finally, you mentioned in your submission public understanding
of the renewables agenda. Is there anything you would like to
recommend should be taken up by this Committee and pursued in
terms of helping to widen public understanding of this whole issue,
which is intimately related to the whole process of planning consents
and so on?
(Dr Count) Clearly communications of the benefits
of carbon reduction could be helped further. The second issue
is that consumers will buy into the concept as long as they can
see tangible things happening. I would only say from my evidence
that at my retail end, at the mass consumer end, there is less
understanding and certainly no willingness to pay differential
pricing. There is a much better understanding of the issue at
the industrial large user end. There is a willingness to have
tailored products, so from our retail experience there is a job
in communicating to the average consumer.
196. How would you do that?
(Dr Count) I have not really thought. I would like
to come back on that.
197. We would love to hear your views on that.
It is an important issue.
(Dr Count) My instinct is that if we are advertising
our wares we go on the TV and do national advertising primarily
in the visual media.
198. It is a big barrier, is it not?
(Dr Count) It is a big barrier and it is not cheap.
We spend £20 million a year in national media advertising
for our product out there.
199. Your latest memorandum is much more gloomy
about the prospects of exploiting the Non-Fossil Fuel Obligation
than you were earlier in the year. Is that because the whole thing
is grinding to a halt and is in effect sterilised, or what?
(Dr Count) Broadly speaking we are slightly more gloomy.
I would not say we were much more gloomy. Ultimately the old NFFO
sites hand their renewable certificates to the Non-Fossil Agency,
so we are really waiting to see whether there are better opportunities
if we can get comfortable with the political risk with the new
renewable certificates. From our end as a major supplier of some
25 per cent of the nation's electricity I am really keen on making
sure that I get the renewable certificates that meet my obligations
there. Lastly, some of the bids that were put in I think were
unrealistic in terms. It just comes into reality now that perhaps
returns are not attractive enough. It is those three issues.
(Mr Bowden) But there is no doubt that the Renewables
Obligation has had a major impact as well on the NFFO issues.
The NFFO contracts are tied to particular sites. If a site has
a NFFO contract it cannot be used for a Renewables Obligation
project. I think the market believes that the NFFO 4 and 5 projects
are unlikely to be developed. The portability of NFFO that some
have asked for, which theoretically frees the use of the site
from NFFO constraints, we do not think helps because at the end
of the day those NFFO contracts are probably priced lower than
the price expected under the Renewables Obligation and I think
one might see that an appropriate response might be to offer the
ability to rescind NFFO contracts by secondary legislation which
would free things up and allow industry to look more proactively
at projects under the Renewables Obligation.
Chairman: Thank you very much; that is very
good. Thank you very much indeed for coming this afternoon. It
has been a long session but a very interesting one. We look forward
to receiving your notes on the planning issues and on the England
and Scotland differentiation, and on the publicity issue. Thank