Supplementary Memorandum from British
Wind Energy Association
Dear Mr Hennessy,
Thank you for your letter of the 4th of July
addressed to Michael Hay. He has asked me to answer the questions
contained in that letter, which it is my pleasure to do. Before
I address them directly, it is worth saying that we believe the
consultation has generally addressed the right issues, leading
us to be cautiously optimistic about the progress of the Bill.
However, there are some key questions that are not addressed,
some of which the Committee's follow-up questions have accurately
identified.
What developers want most of all is regulatory
certainty. However, this Bill is unlikely to deliver certainty
in the way that the authors might envisage. The prime problem
is the possible wholesale shake up of the way renewable projects
are consented. If this happens it will leave developers unsure
as to how to proceed, and they will have to get to know the consenting
system all over again, leading to delay and cost. This is not
an issue that the emerging offshore wind and fledging wave and
tidal industries should have to deal with it, especially when
they are key in helping Government meet its renewable energy and
carbon emission targets. If consenting power over them is given
to an MMO this will lead to further delay whilst the organisation
finds its feet.
If this sounds cautious, it is because offshore
renewables have a consenting system which, while not perfect,
works and is understood by all parties. The issues we have with
the process are due to the time taken for consulting stakeholders
and slow progress in conflict resolution within Government departments,
which do not stem from the basic legislation. On the principle
of "if it ain't broke don't fix it", BWEA is reluctant
to support a move away from the current system unless it is unambiguously
clear that there will be benefits in doing so, and a radical overhaul
could do more harm than good. For this reason it would be sensible
to keep renewables out of an integrated consents system were one
to be implemented, because it will allow development without delay.
This argument also applies to Marine Spatial
Planning. This has the potential to work well and create sensible
approaches to development in the marine environment. However,
were a binding system immediately imposed on all users of the
sea, MSP could potentially be very damaging (including for the
marine environment) if it is based on poor data and thus unworkable.
At the least there needs to be a transition period to allow problems
in the system to be ironed out and enough data to be collected,
hence allowing the plans to be proved accurate. Once this is done,
the plans can be come binding. This was the approach taken in
land use planning where plans only became binding in 1990.
Turning to the questions:
1. Having devolved MMOs does not necessarily
result in paralysis of the system, but what it does ensure would
be duplication of effort in different administrative centres,
and possible inconsistency in application of the legislation.
At the points where jurisdictions meet, there may be unnecessary
disputes over which MMO has precedence over plans and projects.
Also, developers of schemes such as the Robin Rigg offshore wind
farm, which straddles the English/Scots border, would likely have
to provide two sets of identical, or near-identical, data and
paperwork, at considerable cost of effort and money. The sea knows
no borders, and BWEA would much prefer if such confusion was eliminated
through having a single MMO for the UK. This would be facilitated
if consenting was devolved but the overall planning and data gathering
was kept within a UK-wide MMO, as is BWEA's preference for the
structure of the Marine Bill bodies.
2. BWEA's main concern around financing
is that sufficient funds are devoted to the key issue of baseline
data gathering. Any marine plan will only be as good as the data
upon which it is based, and currently the knowledge base on the
marine environment is sketchy at best. Binding plans can only
be developed after considerable effort has been devoted to this
data gathering effort. Offshore renewable developers expend considerable
amounts on environmental surveys of their sites, but they cannot
be expected to fund work over the wider areas within which they
sit. BWEA is concerned that Treasury will not sanction the spending
required for the comprehensive surveying that must be undertaken
before meaningful plans are created. The consultation paper does
not deal with such issues, which is of concern to BWEA.
3. BWEA has not made quantitative estimates
of the possible costs and benefits of the Marine Bill proposals.
Qualitatively, the are possible benefits in streamlining consents
procedures, which would reduce development costs, and improved
site screening through MSP could eliminate detailed (and expensive)
examination of sites which ultimately prove to be unsuitable.
Through reducing the regulatory risk at the site development stage,
required returns could be lower, thus resulting in lower-cost
power from these projects. On the downside, there is a risk of
delay in implementing the Marine Bill provisions, resulting in
a higher-risk regulatory environment and difficulty in securing
development capital unless projects secure higher returns. If
the Bill results in greater administrative burdens, then of course
that would result in higher costs, though it is to be hoped that
this can be avoided through careful design of the new law. BWEA
is hopeful that on balance the Marine Bill will be beneficial,
though it is difficult to be sure when so many details of the
new legislation are yet to be settled.
4. BWEA's concern about further delay to
the Marine Bill is that it will result in delays in development
of the renewable energy potential of our seas, just when the urgency
of exploiting all our indigenous, carbon-free power sources is
rising. With a prospective Royal Assent in late 2008/early 2009,
followed by a period while the new bodies set up and new processes
are implemented, it is unlikely that MSP will be meaningfully
in place before 2010. Given the long development cycle for offshore
wind of five years or more, it will be necessary to allocate new
sites well before 2010 if there is not to be a hiatus around 2015
as the Round Two sites complete construction; if the UK is to
be seen as the prime country for offshore wind development, then
it is vital that there is continuity in such work. Additionally,
if the UK is to capitalise upon its current lead in the new technologies
of wave and tidal stream power, it will need to be allocating
significant sites well before 2010, which will require a Strategic
Environmental Assessment and therefore a decision on where such
generation projects should go. It is to BWEA's considerable concern,
therefore, that recent statements by Energy Minister Malcolm Wicks
indicate that he thinks that such processes can wait until after
the Marine Bill has passed and MSP implemented. If the Bill is
further delayed, and DTI continues to use the prospect of the
Bill as a reason to delay SEA for wave and tidal, then this nascent
industry may be stifled at birth for lack of sites.
I hope these answers are helpful. Please don't
hesitate to contact me or Michael should you need any further
information in the course of the Committee's enquiry.
Yours sincerely,
Dr Gordon Edge
Head of Offshore
BWEA
July 2006
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