Examination of Witnesses (Questions 199
- 219)
WEDNESDAY 13 JANUARY 2010 (afternoon)
MR SIMON
BULLOCK, MR
BEN AYLIFFE,
MS JEAN
MCSORLEY,
MR KEITH
ALLOTT AND
PROFESSOR ANDREW
BLOWERS
Q199 Chairman:
Good afternoon and welcome to our third session of hearings on
the Energy National Policy Statements. This morning we discussed
with a number of witnesses from organisations which are represented
here this afternoon. This is related to planning participation
and environment assessment. We are particularly concentrating
this afternoon on looking at energy strategy and technology specific
issues, but of course that does not preclude you from venturing
into those other areas if you consider it is important for your
answers, so the terms of reference are loose rather than tight.
Welcome to this hearing and thank you for attending this afternoon.
I would be grateful if you could give your names and titles for
the record before we proceed.
Mr Bullock: I am Simon Bullock,
campaigner for Friends of the Earth.
Mr Allott: I am Keith Allott.
I am Head of Climate Change at WWF UK.
Mr Ayliffe: I am Ben Ayliffe.
I am Senior Climate and Energy Campaigner at Greenpeace.
Ms McSorley: I am Jean McSorley.
I am a consultant for Greenpeace.
Professor Blowers: I am Andrew
Blowers, this afternoon representing the Nuclear Consultation
Group.
Q200 Chairman:
I should declare for the record that I am a contributing member
of Friends of the Earth, but that does not mean I am going to
ask easy questions! Thank you very much everybody. I would like
to specifically start with a question to the Greenpeace witnesses,
who were not present this morning, and essentially that is a standard
question, which your colleagues have mentioned this morning. Do
you think, as they stand at the moment, the Government should
formally approve the draft energy National Policy Statements?
Mr Ayliffe: As they stand at the
minute, Greenpeace do not think they should, and I say that for
three reasons really. Firstly, specifically thinking about nuclear,
which is an area that certainly Jean and myself have looked at
in some detail, the problem with the NPS is that it is sort of
ongoing at the same time as there is a whole host of other regulatory
issues around new nuclear. So you have EU issues such as the justification
of new nuclear power, which is ongoing at the same time. You have
things like the generic design assessment process for new nuclear
power. You will have licensing, possibly, of new reactor design.
You have issues around the funded decommissioning programme for
sorting out back-end costs of new nuclear. All this is still up
in the air. So as it stands currently, the principle of allowing
new reactors to be put up and built is not justified. There is
no sort of official sign off that the reactor designs are safe.
So it is very difficult to say there is a need for all this while
these issues are still up in the air. The second reason is that
there seems to be a disconnect really between the UK's ambitious
climate change target for 80 per cent by 2050 and the fact that
the NPS does not really allow the IPC to consider infrastructure
projects in terms of their lifetime greenhouse gas emissions.
It seems a very strange state of affairs. Then finally, we do
not think they should be given sign off because, again a specifically
nuclear related issue, there is an awful lot of confusion and
a certain lack of evidence regarding the management of spent nuclear
fuel from new reactors. So for those three reasons we think that
as it currently stands it should not be signed off.
Q201 Sir Robert Smith:
I just want to ask a question because I share your concerns about
nuclear probably, but surely even if the planning side of it sees
that a nuclear power station is suited there, if it does not get
the safety case it is not going to be there anyway, whether the
national planning takes into account the safety side or not, because
that safety is dealt with by another body?
Ms McSorley: One of the problems
is that you might argue there is a need but you cannot even prove
that that need can be met. You do not know the timelines by which
it might be met. You do not know the scale of the proposed programme
and the environmental and the waste parts of that. You do not
know the impact that will have on transmission, which is another
area which has to be taken into account with nuclear power across
the grid as a whole, what is the holistic overview across the
country and the timeline for transmission in connection with all
of this, and to say now that you can just sign off—if it
is not going to meet the planning target without all those other
pieces of the jigsaw in place, it is just not possible to do it.
It is just not a logical or progressive process in which to address
something so big as a nuclear programme, and in fact the industry
does not have a lot of answers to this either, so to be signing
off on an NPS now and giving directions to the IPC not to consider
major issues subsequent to signing off on an NPS is quite disturbing,
particularly for local communities as well as national groups.
Q202 Chairman:
You have made that statement relating to the nuclear NPS. What
is your view on the totality of the energy statements, particularly
on the Overarching Energy NPS? Do you consider that the documents,
taken as a whole, would give the Infrastructure Planning Commission
the information and the material it needs to be able to reach
decisions on individual applications, and do you also think that
the information which is in particularly the Overarching Policy
Statement gives sufficient guidance on the Government's energy
and climate change policy generally?
Mr Ayliffe: Well, I think it explains
what the Government policy is, with 80 per cent cuts. We have
really concentrated on the nuclear ones, but the impression we
get is that whilst on the one hand the NPS is saying, "This
is the Government policy. We have a need to decarbonise by 2030/2050,"
we still do not see how the NPS is going to be used effectively
to get us there with big infrastructure projects when the IPC
will not be able to consider the overall lifetime emissions of
a power station. There seems to be a disconnect between the two
of them. You have these very ambitious targets over here, but
then you have an IPC which, on the basis of the NPS, is allowing
big energy projects to go ahead which will have a significant
impact on whether or not we actually meet these targets, but the
IPC is not allowed to say, "Well, we shouldn't allow this
to go ahead," or, "We should allow this to go ahead
because we can see exactly what the emissions will be over the
lifetime of, say, a power station."
Q203 Chairman:
So are you suggesting that additional framework or protocols should
be in place, perhaps, to talk about energy mix or how the targets
relate to particular applications? How would you see that criticism
working in practice?
Mr Ayliffe: That is an interesting
question and, as I have said, I do not see how that is going to
happen. I think one of the issues is that the Government suggested
that although we have a need for new capacity, it all ought to
be left up to the industry to decide how we get there and that,
in the past, has led to, well, a little bit of this and a little
bit of that. I do not see how that is going to change anything
when you have an IPC which, as I have said before, cannot consider
the fact that we could have hundreds and hundreds of gas-fired
power stations. You have got something like the Committee on Climate
Change looking at carbon budgets. Maybe there is a role somewhere
for them to say, "Well, okay, we're five, ten years down
the line. This has been green lighted by the IPC. What effect
is that having? What do we then need the IPC to do to get it back
on track to a decarbonised economy?" but I do not see how
that is going to happen at the minute.
Chairman: Can we now turn to what you
have already mentioned, which is the question of assessing carbon
impacts of new electricity generation plants and how that may
work into considerations of the IPC, and indeed how those are
set out in the NPS document? I turn to Mike Weir.
Q204 Mr Weir:
We have heard a lot from witnesses about the lack of the ability
of the IPC to take into account the carbon emissions. What is
your response to the Government's argument that the IPC does not
have to do this as it is covered by the existing policy, such
as the EU Emissions Trading Scheme?
Mr Bullock: The Government is
saying that the IPC does not need to bother assessing carbon because
it believes that the policies underlying the NPS are consistent
with the budgets for the low carbon. To my mind there are two
problems with that. The first is that there is a loophole in how
the Government assesses progress on the carbon budgets. The electricity
generation sector is completely within the EU Emissions Trading
Scheme and how the Government measures progress on those emissions
is not to say, "We will measure what the actual emissions
are in that sector," but to say, "We will measure the
allocated emissions," the number of permits it has given
in the ETS. For example, if the UK is allocated 100 million permits,
that is what gets recorded, irrespective of whether we actually
make 150 million or 50 million. The quantity that gets recorded
as assessed against progress against the budgets is the allocated
emissions. That means that in practical terms it does not matter
for the purpose of meeting the budgets whether you build coal-fired
power stations, wind, nuclear. It makes no odds. Because of this
loophole, anything is compatible with meeting the carbon budgets
from the electricity generation sector, so to my mind that makes
a mockery of the idea that saying "This system is in line
with the carbon budgets" will mean that low carbon infrastructure
will get those. It does not provide that guarantee at all. I mentioned
there were two points. The second one is that we strongly believe,
obviously, that this loophole should be closed and that the Government
should measure actual emissions, what actually happens on the
ground, but even if they did that the NPS are still just expressing
a hope that as a result of its policies the applications coming
through to the IPC would be low carbon applications that would
be consistent with the budgets. There is no guarantee and that
is the real concern for us because the Climate Change Committee
in its October report were saying very clearly that they believed
the Government's policies on bringing low carbon infrastructure
on board were not strong enough. There is a real danger of lock-in
to high carbon infrastructure and there is a real danger of more
gas getting the interest(?) of the renewables and that the Government's
policies need to be strengthened. In that context we believe it
is really important that the IPC and the NPS, which are very strong
legally binding settings in those documents, have a safeguard
in them to ensure that if the Government's policies are not strong
enough then the IPC does have a role, a mechanism of sorts—which
we can come on to—to make sure that we do not get locked
into high carbon infrastructure.
Q205 Mr Weir:
Is there not a danger in that, though, of building up an alternative
bureaucracy? You are going to have the Climate Change Committee
and the IPC all looking at the same thing. Is it not more sensible
to perhaps strengthen the role of the Climate Change Committee
to deal with that rather than the IPC?
Mr Bullock: That is absolutely
right. Nobody wants there to be huge levels of bureaucracy in
this at all. Friends of the Earth does not believe that it is
appropriate for the IPC to assess individual decisions against
the carbon budgets because clearly the carbon budgets are about
the whole economy and this is just about electricity generation.
You are right, the Climate Change Committee should have a bigger
role, and what we suggest is that the IPC has an annual report
to Parliament and in that annual report it should set out for
the Climate Change Committee the sum total of the carbon profile
of the applications coming forward and the applications that have
been approved. The CCC then has to report back after six months
or so to say either, "Look, this is in line with the carbon
budgets," in which case continue as planned, there is nothing
to worry about, or it could say, "There's clearly a problem
here. We are getting too much high carbon stuff through. You need
to implement measures X and Y to ensure that the carbon budgets
are kept to." So there has to be a stronger role in the NPS
to create a link between the IPC and the Climate Change Committee,
but just to do that job you need to be able to assess carbon emissions
and currently the NPS applicants are not even required to set
out the full life cycle carbon emissions of any application, so
the IPC and the CCC could not do that job. So there are two things
that need to happen: measure the carbon and then create a mechanism
whereby the IPC gets expert advice from the Climate Change Committee
to make sure we have a safeguard to prevent high carbon lock-in.
Mr Allott: If I could just come
in on the issue around the EU Emissions Trading Scheme. This is
not an ideological thing about carbon trading, it is about what
works and about the need to transform our economy and avoid high
carbon lock-in at a time when we are going through a generational
investment cycle which would lock us into an alternative pathway,
depending on which choice we take. Unfortunately, that is coinciding
with a very weak carbon price and a very weak cap under the ETS.
The cap as currently envisaged, as it declines, will decline towards
zero by about 2070, but that zero could be met by essentially
almost unlimited use of offsets. Now, this is not a mechanism
which is, as currently constituted, enough to ensure the transformation
that we need to see and would lock us into a high carbon future,
which could be very expensive and costly to reverse. I think the
Climate Change Committee recognises very clearly, certainly people
like Nick Stern and many of the people are now recognising that
this is actually about making the right decisions about transforming
your economy and the fundamental choices that you make, not just
relying on a silver bullet ETS mechanism. The Climate Change Committee
recommended very clearly that the power sector in particular should
be the prime candidate for rapid decarbonisation. Most of that
should be achieved by 2030, essentially almost complete decarbonisation
of the power sector by 2030, because it is the biggest polluter
in the economy at the moment. It is also the sector which is one
which can be decarbonised but which also could be re-carbonised
through a high carbon investment cycle, which would have lock-in
problems. It is also the sector which can potentially provide
a pathway for decarbonising, along with all the other measures
we need, the heat sector and the transport sector. So this is
a strategic choice and it cannot be left purely to some market
mechanism which, frankly, so far has failed to save much in the
way of carbon. This is actually about the national interest and
about creating new industries, new jobs and new technologies.
So the ETS should not be a silver bullet, basically. I agree there
is a role for thinking carefully about the interaction between
the Climate Change Committee and the IPC. The Climate Change Committee
is now a statutory consultee for the NPSs, but I think there is
clearly also a role for the IPC to be able to look at these big,
lumpy, high carbon projects which might be going forward and decide
on a project by project level, subject to advice from the Climate
Change Committee, whether or not that project is itself a threat
to the trajectory we need to be getting onto.
Q206 Sir Robert Smith:
Can I just hear a bit more? Simon Bullock was talking about the
permits being a fiction in terms of the carbon emissions from
the electricity generation. Does the generator not need the permits
to actually operate the plant?
Mr Bullock: Yes, that is correct.
The point is that the Government is saying, "You do not need
to concern yourself with carbon because the NPSs are in line with
the carbon budgets." So the judge of success is whether the
carbon budgets are met or not, but the judge of success on the
carbon budgets in that sector is simply the allocation of permits.
Of course, the EU ETS does have an effect, a price effect, on
whether developers will come forward with a gas or coal or a new
plan, but at the moment, as Keith says, that is a very weak effect.
Q207 Sir Robert Smith:
Is there a danger that if you start controlling it through other
mechanisms you are interfering with the whole idea of the optimal
solution, because in theory by the trading of the permits you
should be finding what is in the UK's financial best interests
to produce a low carbon future? If you then say, "Well, we
are going to actually regulate this part of the market,"
are you not distorting the idea of an optimal solution for the
UK?
Mr Allott: I think you need to
take a view as to what the UK's best economic interests are. A
future where we build high carbon on the basis that at the moment
it seems to be cheaper to send lots of money abroad buying offset
credits and hoping that there is a bottomless supply of cheap
offset credits for ever and ever—if we are getting serious
about climate change as a world, which I hope we will be, that
is certainly not the case. So it might look an attractive proposition
for a couple of years, but we would then lock ourselves into a
very expensive route forward. We would also foreclose the opportunity
to generate new industries and new technologies because we would
carry on business as usual, and this is not really a model for
creating new jobs and new economies of the twenty-first century.
Q208 Sir Robert Smith:
The only other thing is, in terms of them looking at the sort
of carbon effect of the generation side, will not a lot of the
low carbon actually be from smaller schemes below the 50 megawatts
that they do not actually deal with? Would you expect them to
take them into account?
Mr Bullock: I think that is why
it is important that the Climate Change Committee has a role,
because they do understand the totality of all of the sectors,
not just electricity generation. Just to come back very quickly
on your EU ETS point and economic efficiency, of course the EU
ETS is potentially a very powerful mechanism, but even if it was
substantially strengthened the Government and governments in other
European countries still have long-term other policies. It is
not that the EU ETS is the sole policy. The Government has a climate
change levy, a renewables obligation, all sorts of regulations
throughout the economy on carbon capture and storage. So it is
the balance of those policies which will, in combination, deliver
on the carbon budgets, not just the EU ETS.
Q209 Sir Robert Smith:
No, but there is the nagging doubt from some economists that if
you, as a member of an open market EU ETS scheme, do your own
thing you are subsidising the whole of Europe?
Mr Bullock: There is an issue
about cost, but I think Keith is right, there is a very real danger
that if the UK just took the idea that it does not really matter
if our emissions are high because we will just buy cheap permits
from Poland, that might make short-term economic sense but in
a world where it is very, very likely that we will have much tougher
carbon budgets in future we will get locked in and it will cost
us a lot more.
Q210 Colin Challen:
I am just wondering how serious you would actually rate this danger
that the NPS might not be cognisant of the long-term carbon impacts
of applications that it deals with. Surely this is going to be
a well-informed body and even if they do not have a duty they
will still have to—because this is the culture that is developing—take
into account those impacts?
Mr Bullock: At the moment the
NPS is very explicit that the IPC should not look at carbon at
all.
Mr Allott: I agree. It is directed
not to consider this.
Q211 Colin Challen:
It seems to be something that may not last for very long, though,
such a requirement not to consider. How would you explain, if
you can, the origins of that particular requirement? I would suspect
it is the Government's commitment of not picking winners which
seems to seep through all these energy policies and not try to
determine the size of any particular sector. Would that be your
view, or is it some sort of oversight, some mistake?
Mr Bullock: I think maybe the
culture within Government is changing. Certainly, though, in the
low carbon transition part they talk about what is an acceptable
electricity scenario for 2030 and they do take the view of pretty
much a wide range of different scenarios. Very different carbon
intensities are acceptable to 2030 and the argument runs that
that is because all roads lead to Rome, all these paths are compatible
with an 80 per cent cut by 2050. I think what is changing about
that is that the Government is moving away slowly from a culture
that it is the 2050 target, the end point, that is important to
a view that it is the overall carbon budget over a 50 year period
that is important. With that new carbon budgeting approach, it
is much more important what happens in 2030, that we are significantly
on the way to decarbonising. So, hopefully, as time progresses
the Government's approach will change on that.
Mr Allott: I would agree with
that and I think the Climate Change Committee itself agrees with
that, the reference to recommendations specifically about the
power sector, about the real decarbonisation trajectory for that
sector, not the notional cap under the ETS but actually what really
happens on the ground, because what happens on the ground actually
matters and influencing real investment decisions in that sector
actually matters. Unfortunately, the Government has not yet fully
accepted that recommendation, but we know they are considering
it and we hope that they do accept it. If they do, we think that
would help to provide some of the guidance and would ease some
of our concerns about the lack of clarity around the IPC's role,
but actually at the moment there is a worrying lack of clarity
on what governments can and cannot do to shift the power sector
onto a pathway through real investment decisions, be it coal or
gas. We are seeing elements of policies emerging which we think
are moving in the right direction. Things have moved on coal,
so there is a requirement for partial CCS for new coal-fired power
stations, but not full CCS and no clarity that that would ever
lead to a full retrofit. Nothing yet on gas. On renewables things
are moving. So this is a policy under construction which is moving
away from the world of a year and a half ago when we heard from
John Hutton and others that all that mattered was the ETS and
nothing else. In a way this feels like a little bit of a throw
back to a previous era and we would like this to catch up with
the emerging thinking.
Chairman: We have begun to discuss possible
responses to take account of carbon impacts and Friends of the
Earth in their original evidence proposed a number of broad solutions
to the issue of assessing carbon impacts, such as clearer guidance
and safeguards to prevent lock-in, and so on.
Q212 Colin Challen:
If I can carry that forward a bit more, what should the energy
NPSs do then to take account of carbon, re-write the whole rule
book or are there some ways in which it could be tweaked to address
the concerns we have already heard this afternoon?
Mr Bullock: I would say four things.
I think it is important to have clear trajectories—at the
moment, as I say, it is based on a low carbon transition but it
only goes up to 2022—to set out to 2025, 2030, 2040, what
the carbon trajectory should be as a guide. I think the second
big tweak is that the NPSs have got to give a requirement for
applicants to set out the full lifecycle of carbon greenhouse
gas emissions. It is a prerequisite to the other things that need
to happen. We have got to be able to know more about the carbon
practice because currently there is no requirement. Then there
are two ways in which that carbon information should be used.
The first one I have mentioned already, which is to say that the
IPC should be reporting to the Climate Change Committee on the
breakdown of the applications that are coming forward, what is
the likely impact of that if it is approved, a breakdown of the
applications it has already approved for the CCC to make a judgment
on whether that is compatible with the budget, and then there
is a requirement within the NPS for the IPC to take note of the
CCC's recommendations, whether that is, "Please don't build
any more gas-fired stations," or, "Everything's fine
as it is. Keep going." The last thing is that in section
4 of the Overarching Energy NPS it requires the IPC to do a full
cost benefit analysis of all the economic, social and environmental
costs and benefits and as currently set out the IPC is not able
to do that job properly because it will not have any carbon information
to use. So that is another reason why you have got to have the
carbon requirement of applicants so that they can properly assess
whether the carbon costs of a proposal, when weighed against everything
else, the good and bad about the proposal, mean it should go ahead.
Q213 Dr Turner:
Would it be helpful if the NPSs were to make it clear that in
order for a generating station or facility to gain approval it
should meet current emissions performance standards as set by
the Government if there were one?
Mr Allott: As many of you may
know, WWF and many other NGOs have been pushing hard for an emissions
performance standard to be introduced for all new power facilities
to be technology neutral, covering coal, gas, everything, setting
out a clear pathway to actually implement the Climate Change Committee's
recommendations and provide some confidence for investors and
confidence on outcomes. Unfortunately, that has not yet been fully
accepted. The Government is looking at a version of an emissions
performance standard in its responses on coal regulation, but
we think this is a broader issue in terms of guiding investment.
We think it would help. It would provide greater clarity as to
what the overall carbon impact of a development would be over
time, especially if you had a total emissions performance standard
requiring full CCS for coal, or indeed for gas over time. It would
also help to inform and guide the location aspects of investment,
which we think is something which the NPSs are remarkably silent
upon, because location aspects are very important for energy infrastructure,
not just for nuclear, which I think is one of the only technologies
in the NPSs where sites are addressed, but just in terms of identifying
issue where, for instance, offshore wind, or renewable, or onshore
wind maybe most suitable, but also where any fossil fuel development
reliant upon CCS should be located, because there are real issues
there about building coal or gas in places which may be actually
sensibly located in clusters to allow more efficient capture and
transport of any CO2 if the technology is to be rolled out, and
also to be near to storage sites. At the moment there is no kind
of strategic perspective on that. If you are applying an emissions
performance standard up front, also with a clear horizon as to
a tighter standard that would apply requiring full CCS, then any
developer would take that very seriously. The other location aspect
I forgot to mention, of course, is that an emissions performance
standard could drive highly efficient use of gas through CHP and
clearly you need to be locating any new CHP facility near to the
heat demand. So this is a tool which we think is actually very
important, not just in its own right in terms of the emissions
but also in enforcing more strategic location decisions and therefore
would tie in very nicely with the NPS.
Q214 Dr Turner:
Do you think it would be reasonable to say that if we did have
emission performance standards and they were made a requirement
in the NPS it would resolve most of the problems that we have
been discussing for the last half hour?
Mr Allott: I do not think it is
a silver bullet. Not many things are in this complex world that
we are in, but I am sure it would help a lot. It would certainly
ease a lot of, but not all, our concerns about the failure of
the NPS to really grapple with the carbon risks attached to giving
to the go ahead to a new development.
Mr Bullock: I think with that
as well all of us are campaigning for a stronger energy policy
and indeed, yes, we do want to see emissions performance standards,
but what we are talking about with this is ensuring that the National
Policy Statements have a safeguard in there. The NPSs are very
strong, unprecedented legally powerful documents which, when adopted,
do not get reviewed for five years, so if we could have a safeguard
in there in case the policies we are all hoping come forward do
not come forward, then that will help prevent the carbon lock-in
that everybody seems to want to have.
Q215 Dr Turner:
Do you think it is reasonable to expect the IPC to monitor the
Government's performance on emissions when that is the job of
the Climate Change Committee? Do you think it is stretching the
use of NPSs too far?
Mr Bullock: I do not want to repeat
myself too much, but I think we would say that there is a linked
role for the IPC and the Climate Change Committee to work together,
that the IPC reports on what it is doing to the Climate Change
Committee, which advises it on whether its actions are compatible
with other measures.
Mr Allott: I would agree with
that. I think you could say that the IPC would ultimately have
the role for making a decision on a project or an application,
informed by the monitoring and the advice from the Climate Change
Committee. Precisely how it will work, I am sure it is not too
hard to work that out in detail.
Q216 John Robertson:
The figures you are talking of, the sort of targets set, would
this be yearly targets or ten yearly targets? You sort of went
through the years in tens. I do not know whether you meant to
go through the years in tens or whether that was just examples
you were giving. How do you see looking at these targets and hitting
them, in general?
Mr Bullock: The Climate Change
Committee sets a budget of three five year periods, which takes
us to 2022, and I think what we are hoping for is that it goes
up to 2050, a 50 year period, and we feel that we need to see
more clarity about what happens between 2020 and 2050 because
it is a big deal, because the decisions the IPC makes affect carbon
emissions for decades. So we are not talking about one or two
years here. If you build a coal-fired station it lasts for decades,
so we have to think of the full life cycle of it.
Q217 John Robertson:
I wonder if you would accept that with new technology, particularly
CCS in coal and then following on to gas, there has to be a certain
amount of flexibility built in here because what you started with
will not necessarily be where you end up. We expect things maybe
not to be so great at the beginning but will improve as the years
go on. Is there a flexibility built in there, or do you see the
gap to be rigid?
Mr Allott: I think there are smarter
ways. We are actually supportive of really trying to find out
how we can accelerate and learn whether CCS can do what its supporters
say it can. We are not saying no to the technology, but there
are different ways of bringing forward technology in a smart way
which has no environmental risks and no risks to the taxpayer,
and we are not convinced that the current package fully ticks
those boxes. There are ways of demonstrating CCS on a pretty large
scale without having to build a 2 gigawatts power station with
only 20 per cent of the emissions covered and then we are all
left with either an environmental liability or a taxpayer liability
to potentially bail out the utility in 20 years' time to ensre
full CCS.
Q218 John Robertson:
This is the flexibility I am talking about really. In that case
we still are receiving the electricity from these stations. There
is, of course, a problem of the need of the nation and the security
that we have to have, in particular our base load. Should there
not be some flexibility in there to allow for that to be met?
Mr Allott: I think the first thing
to say is that clearly security of supply is one of the key objectives
that we all have to make sure we meet, but this is not necessarily
having a policy which is driven by a projected demand. There is
an issue here about, I think, the way the NPSs deal with firstly
the overall need. It is getting more in terms of a predict and
provide approach rather than looking at alternative ways of managing
both overall need but also the need at peak times across the system
and the conclusion to that leads on to where you can just build
whatever you need on security of supply grounds. It does not give
very much assessment of options, for instance of different energy
mixes, and I think we would not want to be saying that the NPS
should be setting a sort of single shining path which has to be
complied with through very central plans, but this is all about
band width. Maybe this is talking about a narrower band width
as we move to guidelines for a new energy system for the twenty-first
century, because we are going through a need for a lot of new
investment, we believe mostly in renewables and energy efficiency,
which would certainly deal with security of supply problems for
the next decade at least if the Government just focuses on meeting
those targets. There are issues going forward beyond 2020 about
different choices that we face as a nation, but those are not
being dealt with in the NPS. It is kind of, "Just build anything."
Q219 John Robertson:
Okay, but you cannot include everything, can you?
Mr Allott: Well, its value as
a strategic document to guide the decisions of the IPC is rather
limited.
John Robertson: If you include everything,
the discussion never stops and nothing gets done.
Chairman: Can we move now to looking
at assessing need? On the one hand there have been suggestions
in NPSs concerning an open-ended increasing energy supply for
future years. On the other hand, an assessment of need has been
set out as a general gigawatt capacity, a new need has been set
out in the NPSs. We would like some views and thoughts on need
and new build and how that may work into the NPSs.
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