Examination of Witnesses (Questions 202
- 219)
WEDNESDAY 30 JANUARY 2008
MR NICK
HARRINGTON, MR
JEFF ALEXANDER,
MR RAVI
BAGA AND
MR KEVIN
MCCULLOUGH
Q202 Chairman: We welcome our second
panel this morning and our apologies for starting a little later
than anticipated. We have Nick Harrington, the Manager of the
Wave Hub Project from the South West RDA, on behalf of the Marine
Institute for Innovation; Jeff Alexander, the Executive Director
of Global Competitiveness, SEEDA, on behalf of the Regional Development
Agencies; Ravi Baga, the Director of Environment and Market Regulation
at EDF Energy; and Kevin McCullough, the Chief Operating Officer
of Innogyis that right?
Mr McCullough: That is correct,
RWE Innogy.
Q203 Chairman: Thank you very much
indeed. I wonder if I could start with you, Jeff. Currently, the
installed capacity of onshore wind is considerably greater than
any other technology. I think we have established that. Is that
likely to change between now and 2020 or is there something else
coming along that might start to move wind technology out of the
way as our dominant technology in renewables?
Mr Alexander: I think what we
are seeing is a spread, a greater variety, so I suspect there
will be a basket of technologies. If you just look at wind, for
example, certainly the Thames Estuary has been mentioned in the
development of offshore wind energy technology deployment. Whether
onshore gets displaced I do not know, but I think it will be part
of a wider mix.
Q204 Chairman: Would you say that
onshore wind will dominate by 2020?
Mr Alexander: I could not say,
to be honest with you. I would be guessing would be my answer
to that.
Q205 Chairman: Would anybody else
like to guess?
Mr McCullough: I think what you
have seen in the last few years is clearly an acceleration of
onshore schemes because of the onset of technology. The RO was
designed to bring the closest technologies to market first and
they happen to be the onshore schemes that have been in various
stages of planning for many years. What you are now seeing since
the onset of the RO are the various rounds of technologies facing
us in terms of round one, two and ultimately three for offshore
in the UK. The challenge with these schemes, and indeed the opportunity
with these schemes is that they are much bigger and therefore
much more binary in effect. If you take things like the Thames
Array, already mentioned, a couple of our sites are of the order
of 500 megawatts plus and some are as high as one gigawatt each,
so one of those projects being built within that timescale alone
will skew the proportion of onshore to offshore very, very quickly.
It will only take one or two of those big schemes for us to see
large volumes of offshore megawatts being created, but still with
a very real needand this is the danger inherent in the
questionfor many of those onshore schemes still to come
through if you have any hope of getting close to the target.
Q206 Chairman: Are there any technologies
which you foresee actually moving us forward in this? We are staggered
as a Committee at what we have to achieve by 2020 in terms of
generating electricity and we are questioning whether it is possible,
given the current technologies, to actually reach those targets,
and we are wondering where new capacity will come from. Are we
likely to see massive breakthroughs in wave technology or marine
technologies?
Mr Harrington: By 2020 that will
be a challenge, recognising where these technologies are now and
the stages they will have to complete before they will be accepted
environmentally and proven technologically so that they can attract
finance, and then the improvements that will be needed to the
electricity transmission and distribution network, I am not sure
you will see a significant contribution from these by 2020; possibly
by 2025 or 2030.
Q207 Mr Boswell: I just wondered
following that question if you could indicate to us if governments
decided to put a crash programme into this could they accelerate
it? Is it just the evolution of knowledge and the drawing together
of the various partners for development which would really constrain
it or is it a financial constraint?
Mr Harrington: The first stage
is to prove whether these technologies work or not. They are still
at, you could say, demonstration stage if you like, so we have
to prove they work. We should know that within the next five or
six years, but a large part of the resource in the United Kingdom
is in the remote areas, so it is off the north and west of Scotland,
the south west of Wales, and the south west of the UK, and most
of our transmission network is in the centre of the country because
traditionally the generation was in the centre. The investment
that will be needed to open up some of those potential sources
is quite significant, and simply by utilising the current ways
in which we invest in infrastructure, in other words a developer
has to effectively requisition a line and then guarantee payment,
probably would not achieve it very quickly.
Q208 Mr Boswell: So there are regulatory,
administrative and commercial issues as well in terms of access
to grid?
Mr Harrington: Absolutely, yes.
Q209 Chairman: Just on this issue
of investment is a company like EDF only interested in large-scale
deployments? Could we actually be looking at technology within
niche markets that could be used first and then expanded or has
it got to be large scale for you to be even remotely interested
in it?
Mr Baga: To the contrary. As Kevin
has already outlined, you need to take all the opportunities that
are available. For example, in the North East we have been developing
some very small wind farms. We are looking at six different sites
with a total capacity of 26 megawatts, so that is an example where
the opportunity is available and we will take the smaller opportunities
as well. We have a commitment to invest over 1,000 megawatts in
renewables between now and 2012. If you take those smaller opportunities,
for example, we are looking at a 90 megawatt offshore scheme in
Teesside, and add to that financing roughly 400 megawatts of projects
that other developers have brought to us, so I think right through,
our messages on the Energy Review have been that you cannot ignore
any of the opportunities that are available to you and that you
really need to take all of them. I would echo some of the points.
It is not just about technology maturity; there are some other
issues associated with planning and transmission access which
are holding it up. There is a considerable queue of projects waiting
to connect to the UK Grid system and so the issue is not the availability
of capital or the technology; it is some of the other administrative
processes that need to be addressed. Certainly if you look at
the reforms proposed in the Planning Bill and the identification
of national policy statements, that should help projects. That
certainly is a step in the right direction.
Chairman: We will come on to planning
because it is obviously a big issue but I will move on to Brian.
Q210 Dr Iddon: We know that with
respect to both onshore and offshore wind the current planning
laws have caused huge problems. There is this statutory decision
limit of 16 weeks. We know it is a joke. Some planning decisions
have taken several years, particularly onshore wind. Can I ask
perhaps you two gentlemen whether apart from wind the current
planning laws have delayed any other renewable technologies being
deployed?
Mr McCullough: I will address
that first, if I may. The current plans in terms of the overall
planning position are not adversely affecting the minority technologies,
the emerging technologies, any more so than any other application.
We in RWE are currently looking at a number of smaller schemes,
a wave scheme in Siadar on the Outer Hebrides, a tidal scheme
on the north coast of Wales near Angleseyand those are
subject to exactly the same stipulations as any other planning
application. The challenge will be in the time even for those
pilot projects that local authorities become comfortable with
the technology, the environmental impact assessmentand
correctly soso that we can inform our stakeholders of the
overall total effect, against a balanced need to actually get
some of these projects in the sea or on land, wherever they may
be, to get them to a stage of maturity where we can then take
them forward. To go back to the last question about deployment
and will we see these technologies make a difference by 2020I
think we have to keep in mind that even when we get, let us assume,
a ten megawatt wave scheme as a pilot and we invest in that, without
government aid and assistance to bring that to market to prove
it, if we then want to take a 100 megawatt array offshore, to
do that from a wave position, my experience tells me that we will
be looking at a planning cycle at the moment of at least five
years to actually make that possible. I know you are going to
go on to planning issues but that really is one of the biggest
hurdles for many of these technologies to overcome. Yes, we have
to prove them, and the willingness and money is there from many
private investors to prove them, including our own, but then to
upscale that is a huge challenge.
Q211 Dr Iddon: You have seen the
Planning Bill that is before Parliament. There are some criticisms
of that. Have you two guys got any difficulties with the Planning
Bill and, if so, would you like to spell them out to the Committee?
Mr Baga: I think in its entirety
the Planning Bill is a definite step in the right direction. I
think if there was one criticism, then it would be that there
is not a time-bound limit on the application being lodged. I think
there is a legitimate debate to be had because on the one hand
you do not want people to abuse the planning rules by putting
inwhat is the wordapplications that are not properly
considered and expecting a decision to be made within a time-bound
limit, and yet you do not want applications that have been very
thoughtfully considered not being accepted because they are not
within the time-bound limit, so I think that is a real area of
debate and discussion, and any further assurance on ensuring that
there is perhaps some independent review of accepting applications
that then do enter the planning cycle with a firm limit would
be very helpful.
Mr McCullough: Clearly anything
that helps streamline the determination would be helpful. I use
the word "streamline" carefully because we are not in
support of bad schemes being consented. One of the worst things
that happens to investors and industry players is that we have
to continue to support applications through a very long and protracted
planning gestation period, if you like, before determination is
reached, and that costs a lot of money. Anything therefore that
actually moves the determination quicker is a welcome thing. There
are a couple of issues within the Planning Bill as proposed that
cause us some concern. Firstly, we are dealing with three administrationsthe
Scottish Executive, Welsh Assembly Government and indeed Westminsterso
the planning determination for England will no doubt be different
from that for Scotland and Wales. Also the scheme still has a
cut-off at a 50 megawatt rate and at least 30 to 40% of all of
the schemes that are being produced, especially those in emerging
technologies where you have to start with the small schemes first,
are way below that 50 megawatt hurdle, and therefore are still
in the jurisdiction of the local planning authority to determine.
One of the things that we expect to happenand it is a sad
reflection of experienceis when faced with difficult planning
decisions, or what are deemed to be in some cases controversial
planning applications and therefore determinations -is a selectivity
by developers to pick the actual area where they think their chance
of success with planning is greater, and those planning authorities
where determination is found more difficult often then just address
that up the chain, which has the added effect of final Secretary
of State determination but a very, very protracted period for
consent.
Q212 Chairman: Jeff, do you want
to comment on this?
Mr Alexander: Just to say from
the RDA point of view we are supportive of the new approach to
planning. There are issues that need to be addressed sometimes
at a greater than local level such as the supplies within the
field we are discussing today. There is the well-known example
in terms of the London Array where I have had more personal experience
where in terms of the main approval being offshore, I think that
went ahead more or less according to plan, and it was central
government's duty to approve or disapprove. Then we had a local
issue in terms of the joining up of the London Array to the grid
where the local planning authority felt that the disruption locally,
during the building stage at least, was not mitigated by the economic
benefit locally and they turned down that application. It has
since been overturned on appeal. I just quote it as an example
that you may be aware of where a broader view needs to be taken
sometimes with these large investments.
Q213 Dr Iddon: My final questionI
think we will come back to the question of capacity in a minuteis
will the new Planning Bill help us to hit the 20% by 2020 target
or are we going to miss that target?
Mr McCullough: It will assist
in the progress towards that but it is not the only thing that
is required. There are many other issues. One of my colleagues
on the panel has already mentioned other obstacles like grid capacity.
If you take central Wales, despite its regional work with the
Forestry Commission, most of central Wales (where a lot of these
wind farms would be positioned) relies at the moment on a wooden
pole distribution system, not sufficiently of the size and capacity
to deal with distributing power, even from some of the smallest
renewable energy projects, or indeed decentralised energy of any
other sort, so there are some very real and significant infrastructure
issues to challenge which have their own planning application
issues but are not directly associated with the immediate siting.
Mr Baga: I would echo that sentiment
very much and I would endorse that fully.
Q214 Dr Blackman-Woods: Do you think
that the cut-off of 50 megawatts is right for the independent
Infrastructure Planning Commission? None of you have really commented
on whether you think it is about the right level. Should the Government
have looked at perhaps a lower figure in terms of the requirements
of the IPC under the new Bill?
Mr Baga: I think certainly in
the development of renewables there is some doubt that the 50
megawatts threshold will assist the smaller projects. Particularly
when we are looking at onshore schemes which are likely to be
much smaller, and there is a fair degree of resistance, then the
Planning Bill may not be as helpful in opening up that bottleneck.
If you look towards the offshore schemes, which tend to be larger
and are more likely to meet the 50 megawatts threshold limit,
then clearly the Planning Bill will have an impact. I do not think
there is much point in my repeating Kevin's earlier comment about
the emerging technologies which are likely to be much smaller.
Again, those are areas where the Planning Bill is unlikely to
be helpful. I suppose the point on emerging technologies is when
you are taking a demonstration technology through to commercial
realisationand this was picked up in some of the questions
to the previous panelthen there is a lot more than just
getting the technology right. Certainly the question about the
Environment Agency saying you need to look at the environmental
impacts, that really needs to be brought into the overall package
of assessing projects, because if that work can be done in advance
so that the planners have confidence with the environmental impact
assessments that they are presented with and they feel they have
sufficient information to deal with it, then that would assist.
Q215 Mr Boswell: That is helpful
but I think the word on the street, if one is speaking as a constituency
Member, where there can be controversies about onshore wind farms
for example, is that a lot of these issues, perhaps in contrast
to highways issues as another part of the planning system, a technical
part, are seen as not sufficiently bottomed or discovered yet.
There will be assertions about dangers to aircraft movements or
to radio transmissions or indeed physical dangers from gear detaching.
Would it be your view that there is a lot more work to be done
on preparing the planning dossier at a technical level so that
planners, wherever they areand it may be in the small-scale
planning authority as well as the national schemesare able
to address these sorts of issues on a principle basis?
Mr Baga: Looking at the very generic
level, any development will have certain tradeoffs, for example
visible impacts versus some of the other more direct environmental
impacts, and I think there is a role for bringing greater transparency
to these tradeoffs. It is communication that is the key rather
than some of technological work because most of the technological
research work on interference with radar or impacts on aircraft
has been done and it is about presenting the information and dispelling
the myths, as it were.
Mr Boswell: Thank you.
Q216 Dr Blackman-Woods: It does look
from what you have been saying as though a great many of the renewables
projects because they are going to be under 50 megawatts are going
to be determined in the normal planning process at local authority
level and probably using PPS22. I just wondered is it your assessment
that PPS22 is up to the job and is it being used properly by local
authorities?
Mr McCullough: If I may answer
that. I think PPS22 as written is a solid piece of policy that
if adopted is capable of providing the local planning authority
with the correct guidance to use that in conjunction with the
Government's targets of the day to achieve certain targets. In
relation to the last question as well, because I believe it is
related, the question about have we bottomed the dossier within
the IPC, the question that is more appropriate is what is the
level of knowledge and understanding of the national need and
desire for a governmental target to be deployed locally, and for
a local contingent to do their bit for the common good and to
meet the targets? Over the last two years my own business has
gone through a series of rolling workshops with various planning
authorities because, to be very fair to these guysand I
do not intend this to be flippantsome of these very small
authorities may be dealing with a house extension one day and
a small wind farm the next, and they are entirely different things
for them to consider. I think PPS22 as an instrument and a policy
guidance document is very sound, as is the amendment as tabled
for the improvement to the Planning Bill, but the weak point in
the system is, in my view, in the education and understanding
and the (so far as can be attained) equality of application across
the many, many authorities that have these planning applications
to deal with, because at the moment for sure there is a very definite
emerging inequality in how one scheme is treated in one authority
to the another. If I may just add a comment in terms of the overall
target, the previous panel was asked about the Renewables Advisory
Board, I served a term on the Renewables Advisory Board a couple
of years ago and I then presented to Malcolm Wicks the amount
of planning applications in the scheme, and two years ago we probably
had enough applications in the planning pipeline to meet easily
the 2015 target. The challenge is that they are in various stages
from complete dormancy to activity and lots and lots of them have
been referred up the chain of command and are increasingly going
to public inquiry. This is an issue where the Treasury has an
interest clearly because of the public money involved in seeing
many, many more schemes that are capable of local determination
being directed towards public inquiry with the added expense that
that brings and also the added delay that that brings. It is a
very real issue.
Q217 Dr Blackman-Woods: Does anybody
else want to comment on that? Is your assessment that the guidance
PPS22 is fine and there is no need for additional guidance; the
problem is interpretation at local authority level or understanding
planning applications? Should the Government intervene where local
authorities are constantly turning down these applications, constantly
sending them to public inquiry, and ask for a determination or
do it themselves?
Mr McCullough: Effectively they
have the means to intervene above 50 megawatts, which was your
other question.
Q218 Dr Blackman-Woods: I meant below.
Mr McCullough: Below 50 megawatts,
rather than intervene I would like to seeand they have
done some of this, BERR have been very active in this field, to
be fair, in assisting organisations like our owneducating
local planning authorities as to what documents exist as tools
for their use. Much more preferable to intervention is equality
of the use of the tools available. However, then the Government
has a question to answer because clearly that is already leading
to a significant delay in schemes being determined. The only way
to do that is probably to lower the threshold under the new IPC
Bill so that that the hurdle is lowered but then you have the
dilemma of local determination and the sense of local involvement
departing from the decision process, which is a fine balance with
any stakeholder.
Q219 Dr Blackman-Woods: Could I ask
one last question. Something is going to have to give, is it not,
and if there is not a need for more planning guidance there either
has to be intervention by lowering the level or there has to be
greater appreciation of the authoritiesis that your assessmentso
that they do determine favourably some of these applications?
Mr McCullough: Something definitely
has to give to break the backlog that we have at the moment. Industry
has definitely responded. There are many, many schemes out there.
Some of them will not deserve to be determined but there are enough
schemes out there to meet at least the 2015 targets already and
they are not being consented.
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