Select Committee on Innovation, Universities, Science and Skills Minutes of Evidence

Examination of Witnesses (Questions 202 - 219)



  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 Innogy—is 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 need—and this is the danger inherent in the question—for 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 Anglesey—and 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 assessment—and correctly so—so 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 2020—I 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 in—what is the word—applications 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 administrations—the Scottish Executive, Welsh Assembly Government and indeed Westminster—so 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 happen—and it is a sad reflection of experience—is 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 question—I think we will come back to the question of capacity in a minute—is 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 realisation—and this was picked up in some of the questions to the previous panel—then 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 are—and it may be in the small-scale planning authority as well as the national schemes—are 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 guys—and I do not intend this to be flippant—some 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 see—and they have done some of this, BERR have been very active in this field, to be fair, in assisting organisations like our own—educating 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 authorities—is that your assessment—so 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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