Examination of Witnesses (Questions 40-59)
DEPARTMENT OF
TRADE AND
INDUSTRY
21 FEBRUARY 2005
Q40 Mrs Browning: But PPS22 clearly—clearly—restricts
local input into where these land-based turbines go.
Sir Robin Young: Several planning
applications are still turned down, as MPs are well placed to
know, so it is not the case that this imposes automatic approval
of applications. Certainly the change to the planning policy guidelines
note was only made after full consultation. You are right to the
extent that it is increasing the number of projects which are
approved from where it was before. It is also getting a more consistent
approach to these applications in different regions of the country.
Q41 Mrs Browning: Against the wishes
of the local population because they have now restricted input
into the decision-making process.
Sir Robin Young: Paragraph 2.10
points out that the NAO "Surveys show that the general public
are in favour of renewable energy, with, for example, two thirds
of those surveyed in England being happy to have an onshore wind
farm in their area". That is what the report says.
Q42 Mrs Browning: It has been put
to the test in Devon on many occasions; I have to tell you that
I am surprised at those statistics.
Sir Robin Young: These are the
Report's statistics, not mine.
Q43 Mrs Browning: Are you concerned
at all that going down this route of focusing purely on wind power
is actually going to create a backlash in the general public against
renewables, against the concept of renewables in general and that
that might not be such a good thing?
Sir Robin Young: We are asked
to find ways of achieving the 2010 target. We are doing so in
a way which fits in with what the market tells us is the most
likely mix of renewable arrangements which will help us hit that.
At the moment wind is what the market says is the best option,
the most likely way in which we will hit our 2010 target and the
huge increase is indeed in offshore wind not onshore wind, where
we are hoping to have the private sector produce almost half of
the contribution which renewables needs to make to their obligation.
Q44 Mrs Browning: How do you defend
keeping energy policy with the DTI when in fact it is divorced
from that very important department DEFRA, which has responsibility
for global warming? Does it not logically make sense to put the
two things together?
Sir Robin Young: There is a variety
of approaches in different countries. Other Member States, the
United States of America, have different mixes. Parts of energy
have shifted around in my recent memory: energy efficiency was
in DTI when I was young; it has now gone across to DEFRA. Various
models have been tried. For what it is worth, the energy sector,
whenever asked, will always prefer to stay within DTI, where they
see us as proactive champions of the sector and the opportunity
for innovation, etcetera, which they have in DTI, with
more of that commercial focus. Their fear is that if they were
moved to DEFRA it would be rather as you first suggested that
energy policy would be rather subsumed beneath environment policy.
These are difficult machinery of government changes and my job
would be to carry out whatever any future government decided.
Q45 Mrs Browning: As that proactive
champion of industry what representations have you in the DTI
made to other government departments about replacing the old Magnox
nuclear reactors?
Sir Robin Young: We have had a
lot of discussion about the future of the existing nuclear reactors,
just as we have a lot of discussion about the potential for nuclear
new build. For some existing reactors there is talk already of
extending their lives and we have frequent discussions, both with
the regulators and with other departments around that topic. We
have something called the sustainable energy policy network which
was set up after the publication of the Energy White Paper, which
allows for cross-departmental discussion of exactly issues like
that.
Q46 Mrs Browning: Is your position
at the DTI in favour or not?
Sir Robin Young: It is neither.
We are having a good cross-departmental discussion about the options.
Q47 Mrs Browning: You are sitting
on the fence; most uncharacteristic of you.
Sir Robin Young: I shall try to
avoid that habit. For the moment we are having cross-departmental
discussions about that and no Government decision has been announced
about the extension of the life of existing nuclear plants or,
beyond what I read, about new nuclear build.
Mrs Browning: I shall need my candles
then. Thank you very much.
Q48 Mr Davidson: The Government's
target is to supply 10% of Britain's electricity from renewable
resources, subject to the costs being acceptable to the consumer.
How is this "acceptable to the consumer" judged?
Sir Robin Young: What we do is
calculate the total cost, which in this case, as we discussed
earlier, is a 0.5% increase in energy prices as a result of the
renewables, which is mentioned in paragraph 5 of the summary,
so a 5.7% increase between 1999-2010. Ministers collectively adjudged
a 0.5% premium for renewables worth paying for the benefits we
have just been discussing.
Q49 Mr Davidson: So ministers decided
that was a price worth paying by consumers.
Sir Robin Young: Yes.
Q50 Mr Davidson: Is there a stage
at which it would not be a price worth paying?
Sir Robin Young: I think there
would be. In all cases we have calculated the cost and who is
going to pay that; indeed that will come to other energy sources
as well.
Q51 Mr Davidson: What sort of level
is deemed to be unacceptable to the consumer?
Sir Robin Young: We have not got
as far as deciding that. What we have said so far is that this
is acceptable, that 0.5% per annum looks about right as acceptable.
Q52 Mr Davidson: How much above that
would it have to be before it becomes unacceptable? If it doubled,
would it be unacceptable?
Sir Robin Young: That is hypothetical.
I just do not know the answer to that question. We have not tested
it yet.
Q53 Mr Davidson: You are running
this. I expect you to have thought on these things.
Sir Robin Young: We certainly
have thought.
Q54 Mr Davidson: What have you been
thinking then?
Sir Robin Young: We have shown
ministers a variety of options and they have plumped for this
one, which is 0.5%. Ministers chose acceptability.
Q55 Mr Davidson: What was the range
of options then?
Sir Robin Young: I do not have
them in my head and I am not even sure I am allowed to tell you
them. Obviously there are loads of options with consumer price
results from new nuclear build at certain—
Q56 Mr Davidson: I understand that.
It says here in the Report ". . . subject to the costs being
acceptable to the consumer". That is not quite the same thing
as being acceptable to ministers as an imposition upon the consumers.
I am just seeking clarification as to whether or not any judgment
has actually been made as to what might be acceptable to this
mythical consumer?
Sir Robin Young: Yes, ministers
made the judgment that 0.5% per annum should be and is acceptable
to the consumer. They were not asked to take judgments on any
higher price for the consumer since this is the product of our
discussions.
Q57 Mr Davidson: You just came forward
with a load of assumptions and said if 10% is acceptable to the
consumer then you get this and if such and such is acceptable
to the consumer you get that and if 0.5% is acceptable then this
is what you get.
Sir Robin Young: More or less.
Remember that we had to put forward propositions which would deliver
a target by 2010, so there is only a certain number of options
which, in our view—and in this case the report's consultants
confirm our view—
Q58 Mr Davidson: Okay, I can recognise
when I am being stonewalled. Why did the Department miss its target
for 5% of electricity generated from renewables by 2003?
Sir Robin Young: Because the previous
non-fossil fuel policy was not bringing forward plans and proposals
quickly enough, which is why it had to be replaced by the renewables
obligation.
Q59 Mr Davidson: When did you realise
that the target was not going to be met?
Sir Robin Young: It was shortly
after 1997-98, when the new government came in with some high
aspirations for the contribution by the renewables obligation.
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