Examination of Witnesses (Questions 440
- 459)
WEDNESDAY 27 JANUARY 2010 (morning)
MR BRIAN
SEABOURNE, MR
PAUL SPENCE,
MR SIMON
WELLS AND
MR DAVID
PORTER
Q440 Charles Hendry:
By step by step, you mean finish one before you start the next?
Mr Spence: There is a gap between
the commissioning of each. Because they would take five years
for the full construction to complete, it will not be a five-year
gap between the commissioning of each. We would expect all four
reactors to be on stream before 2025 on our current plans—
Q441 Charles Hendry:
Does that apply to the other companies as well?
Mr Seabourne: Horizon Nuclear
Power, which is the joint venture set up by E.ON and RWE, would
probably have a similar phased approach.
Q442 Colin Challen:
When you are building a new nuclear power station on an existing
site, is it envisaged that that will be of a greater generating
capacity than the existing plant and, if so, by how much, generally
speaking?
Mr Spence: The design that we
have selected for our sites is a 1650 MW design, which is larger
than the capacity of the existing stations and so the four reactors
that we would propose to build replace a substantial component
of the existing capacity from a larger number of reactors at the
moment.
Q443 Colin Challen:
If that was replicated across the industry, on the existing sites
you would be generating, you would assume, more electricity than
they are at the moment?
Mr Spence: It depends and the
other consortia have still to decide which reactors they wish
to build. The other design is a smaller design.
Colin Challen: If that is the case, you
would have to look for new sites in addition to the ones that
have already been listed?
Q444 Sir Robert Smith:
You have just answered the Chair on the market interaction with
the planning process. Given how much we are using market mechanisms
to drive our energy and our low carbon, surely if a private investor
is sitting there with a planning application before the IPC, it
is almost a demonstration of need, the very fact that they had
decided to put that money at risk?
Mr Wells: Putting the application
before the IPC is not putting any money at risk at all other than
the cost of the application. What the applicant is looking to
do at that time is as much as anything to develop options which
it may or may not choose to pursue subsequent to the grant of
planning permission.
Paddy Tipping: One of the issues that
people talk to us about is how far the IPC should take carbon
emissions into account?
Q445 Mr Weir:
I think Npower has some criticism of the timeframe in the NPS
for looking at the need. What timeframe do you consider they should
be looking at for new investment? Should they be looking beyond
2025?
Mr Wells: I think what we said
was that we felt that the NPSs themselves did not go much beyond
2020 or 2025. We feel that maybe that is a short-term view, given
the nature of these investments and the financial size of these
investments and given the carbon targets going forward. I think
we felt that maybe the NPS should be looking to go beyond 2020/2025
and looking towards 2050 in line with climate change requirements.
Q446 Mr Weir:
One of the things that some witnesses have said to us is that
the IPC should look at the carbon role of the new stations for
which they are giving permission. What is your view on that? Do
you think they should have a role in considering the carbon emissions?
Mr Wells: No, it has nothing to
do with a planning application going forward. The carbon impact
of that particular application in terms of overall climate targets
is not an issue for the IPC. Clearly to some extent the carbon
impact is something that is reflected in the environmental statement
and the environmental analysis that support the planning application
but it is not the IPC's role to monitor carbon impact and carbon
targets. That is the role of the Government and probably the Climate
Change Committee.
Mr Seabourne: The most effective
contribution the IPC can make to delivering low carbon targets
is to provide an efficient and timely process for progressing
applications for development consent and maybe investors will
have more confidence in the process and they will face less risks
in bringing forward projects. Perhaps the other point is that
the IPC obviously needs to have a very clear understanding of
the need for low carbon investments. I agree with the point about
going up to 2050. Perhaps that case would be strengthened if the
Government more formally accepted the recommendation of the Climate
Change Committee that the electricity sector should be largely
decarbonised by 2030 and reflect that in the national policy statement.
That would provide a clearer framework within which the IPC could
consider projects.
Q447 Mr Weir:
In your view the IPC should look purely at planning matters and
not at the carbon intensity of any developments before that?
Mr Seabourne: I can only say that
it is important that the energy policy framework incentivises
low carbon investment and it is already doing that. We already
have a 30 per cent renewable electricity cut target for 2020.
There is support for CCS demonstration projects for new coal.
New coal plants cannot go ahead without a CCS to demonstrate it
so that there is no risk of unabated coal beyond 2025 and there
is active support for new nuclear development. So I do not think
there is a concern that there would be too much high carbon investment.
Q448 Mr Weir:
Mr Porter, your organisation also said that the Government should
attempt to determine the energy mix. What is your assessment of
the risk of us getting locked into high carbon infrastructure
if the Government does not give the IPC further guidance on the
desired energy mix?
Mr Porter: It is a fairly low
risk provided that the other drivers that surround the industry
in the hands of government are used properly to direct the industry
in the low carbon direction.
Q449 Mr Weir:
So you would be fairly confident then that the companies will
react to that and only put forward those plans to the IPC, just
picking up on what Mr Seabourne was saying?
Mr Porter: I do not think we should
lose track of the reason why we are going to have a new planning
system. If you imagine the number of applications of different
types that are going to come forward in the industry in order
to keep the lights on and green the generating industry and you
put that against the old system that we had, I think hardly anything
would happen. I can imagine things such as the nature of the last
Sizewell inquiry happening all over again and there would be endless
debates about the level of carbon emissions and so on. Paul will
correct me if I am wrong but I think that took six years. That
would be completely intolerable. We would get into quite a mess
energy-wise.
Mr Weir: I have one final point. You
have raised also some concerns about the Government's position
on carbon capture readiness as set out in the NPS. Can you elaborate
on these concerns?
Paddy Tipping: I suspend the sitting.
The Committee suspended from 9.40 am to 9.42
am
Paddy Tipping: For the record, we are
hearing objectors from all the sites this afternoon, including
Sizewell.
Q450 Mr Weir:
I was asking about carbon capture readiness. As Npower, you have
had some concerns about the Government's position on CCR in the
draft NPS. Would you tell us more about that?
Mr Wells: We did express concern
and that is consistent with some of the concern we had expressed
previously in response to the consultation responses last autumn.
We support CCS's potential technology. RWE is investing quite
a lot of money in demonstration plants to try and prove that CCS
can work and indeed we have the largest demonstration plant in
the UK at Aberthaw, a 3 MW scheme. That in itself helps to demonstrate
why we have concerns about the carbon capture readiness element.
That is a 3 MW scheme and it is the largest scheme in the UK at
the moment. That helps to show that CCS is a long way from becoming
technically viable and commercially viable on anything like the
scale on which it is needed. Although we support the concept of
carbon capture readiness, we do have a concern that the NPS may
need to be strengthened to be consistent with the ongoing light
touch to demonstrate a no barriers approach to CCR, which has
been the Government's line so far. I think we just need to ensure
that CCR does not effectively constrain development in anticipation
of CCS development, which may or may not happen. That is the basis
of our concern; it is to ensure that the CCR requirements do not
end up effectively anticipating something which may not happen
or which will happen in a different form to that which is currently
thought.
Q451 Mr Weir:
How does that sit with what you were saying earlier about how
the market will move forward with low carbon generation if the
signals are correct? The NPS sets out that any fossil fuel, gas
or whatever must demonstrate the technology and that CCS can be
fitted to before they can get planning permission, if I have read
that correctly. I think there is some concern about gas because
there is not enough research into that. It would seem to me that
there could not be any new coal or gas unless CSS was demonstrated.
Is that correct? Is that your interpretation of it?
Mr Wells: It is not necessarily
as absolute as that but clearly to develop new coal with that
potential uncertain CCS uncertain requirement is not something
that is going to be necessarily attractive to investors. It is
that element of uncertainty which just cannot be made any more
certain at the moment simply because the technology is a long
way away from being proven on a commercially viable or technically
viable scale. Indeed, the NPS itself it reiterates the position
of Government report in 2018 and they want CCS requirements kicking
in from 2020. We do not know what will be in the CCS report yet;
it is a long way away and there is a lot of work to be done to
get there.
Q452 Mr Weir:
Is the reality not that no-one is likely to invest in a new coal
station until the four demonstrators are up and running and showing
it can be done?
Mr Wells: I could not say that
in reality but certainly greater confidence is required.
Q453 Sir Robert Smith:
How tough is this planning guide? Is it just really meaning that
if you do build a power station, there has to be enough space
available for the equipment to go in?
Mr Wells: It is a little bit more
precise than that. The concern was raised in the sense that we
read into the NPSs that maybe that the IPC can move into position
where they can put other requirements or constraints on which
may or may not be appropriate, but we do not know whether they
are appropriate until the technology has been developed.
Mr Seabourne: If I can just add
to that, I think in our view the key priority is to demonstrate
CCS at scale. We are very pleased that the Government is going
to support four demonstration projects between now and 2020 and
we are part of the first CCS competition. So the priority is to
demonstrate the technology. What is lacking is an investment framework
for an investor in a new coal plant, which, in addition to funding
the demonstration phase, will provide some sort of assurance that
the further CCS retrofit required under government policy will
in fact be funded either by the market or by government policy
intervention. That is the uncertainty we have at the moment. The
CCS levy which is being introduced through the Energy Bill is
a very helpful development but we do not think the policy is quite
complete yet in terms of incentivising coal and CCS.
Paddy Tipping: Of course we know the
nuclear NPS is site-specific. We will discuss that now.
Q454 Dr Whitehead:
Particularly E.ON have welcomed the non-spatial nature of non-nuclear
NPSs and equally strongly welcomed the spatial nature of the nuclear
NPS. Is there any contradiction do you think between those?
Mr Seabourne: I think in the case
of nuclear there was clearly a need for a national debate on the
identification of those sites because clearly nuclear is a controversial
issue, as we have seen earlier this morning. In the case of other
developments, such as renewables, I think the technologies vary
significantly; the means of mitigating them can vary significantly;
and so you cannot really have a black and white approach which
designates particular parts of the country as suitable and other
parts as unsuitable. I think what is important is that the IPC
is given guidance on how it should view applications for development
in environmentally sensitive areas, or indeed in areas which impact
on other issues like radar or military installations and so on,
and that they have the right guidance to make a judgment in that
particular case. There are quite a lot of statements in the overarching
NPS which do give them guidance on how they should view developments,
say in sensitive parts of the country.
Q455 Dr Whitehead:
Is that the view of everybody this morning?
Mr Spence: We would certainly
agree with Brian. I think the overall approach that has been taken
on the policy statements and the non-spatial nature of the majority
and then the spatial consideration of nuclear is a practical response
to the reality of the differences between the different technologies
and in the case of nuclear the fact that there is a relatively
small number of sites and that there is a viable process that
the Government could go through to examine and to identify the
candidate sites in a sensible timescale. To try and do that for
the other technologies would risk introducing the delay that would
take us in the wrong direction. So it is a sensible and practical
set of guidance for the IPC.
Mr Wells: We would endorse everything
that has been said. We do strongly support the criteria based
approach. There is also the practical element. It is an element
of spatial planning and the resource intensity and time involved
in undertaking that exercise, both in central and local government,
in some fairly complex investigations will only serve to delay
the NPSs and have a knock-on effect in terms of bringing new projects
forward.
Q456 Dr Whitehead:
The implication of course of that position is that any sites in
England and Wales would therefore be suitable for any new construction
development, subject obviously to the maintenance in the overarching
document of sensitive sites. Others have argued that that implication
flies in the face of what a number of people reckon is the reality
as far as sites are concerned and that you may well impede public
involvement to buy in to the process of infrastructure development.
Mr Porter: I would like to come
back to the question of public involvement before the session
finishes, Mr Chairman. I think the companies have things to say
about that that you will be very pleased to hear. Coming back
to this spatial issue, I can only repeat what I think has been
said before that different technologies have different requirements;
a thermal power station may require a fuel supply of a particular
type and cooling water has to be available; a wind farm does not
have the same issues. I do not think we would want to get things
too bogged down because, as I think possibly Brian said, we would
become engaged in such a depth of work with local authorities
that we would never get this off the ground.
Mr Wells: The technical and environmental
siting constraints are such that in practice you could not say
that any site is potentially suitable. Maybe as developers we
should be saying "never say never". It obviously depends
on the technology, but each technology has different requirements
and there are some fairly basic requirements for a site to be
suitable—grid access, fuel import, transport, cooling water
access, et cetera. There are some fairly heavy constraints there
which of course obviously suggest that it is not the case that
any site would be suitable.
Q457 Dr Whitehead:
Could you conceive shall we say of a middle way position as far
as the non-nuclear NPSs are concerned? Without actually specifying
sites, it might specify likely areas and likely areas that should
not be considered for major infrastructure developments, perhaps
for precisely the reasons that Mr Wells has mentioned, that actually
everybody knows that there are clearly constraints on certain
sites and areas and indeed advantages to other sites and areas?
Mr Wells: Again, we do not believe
that works either because obviously there are potentially quite
large areas which might be suitable for some form of development,
depending on the technology and the constraints. I think there
is also quite an important issue there which is the potential
planning blight against those areas. You could be talking about
swathes of the country.
Mr Spence: Can I go back to the
point David made about local involvement? Before I came today,
I took the liberty of asking our team who are developing a project
at Hinkley to give me just some examples of the scale of local
engagement and local involvement in the new IPC process. That
started back at the stage when we were intending to identify the
site into the process. At that stage we consulted locally. We
ran a series of events. More recently we have just been through
our stage one consultation on the new proposals. That has been
a nine-week consultation; we have issued 36,000 newsletters to
the local residents; we have had nine exhibitions with about 1,100
visitors to those exhibitions; we have held 22 meetings and more
than 600 people came to those meetings; we had 400 questionnaires
filled in from the attendees at those meetings and had 150 other
submissions. Anyone who is saying that this is a process that
does not involve local communities being engaged in the project
is missing the fact that there is very intensive local engagement
alongside the scrutiny of the national policy statements.
Q458 Paddy Tipping:
Let us talk about scrutiny of the national policy statements because
some of the evidence we have received suggests that it is not
really engaging the public. In Hartlepool, for example, there
was very late notice of the meetings. Do you think that the consultation
that itself is taking on the NPS is satisfactory?
Mr Spence: It is always easy to
criticise the scale of consultation. Certainly at the absolute
level we think that DECC has made a lot of effort and has done
a lot to engage with the communities that are affected and to
engage on the policy statements. They have run a lot of events.
They have encouraged a lot of people to go to those events, so
again I think we would say they have done the job that is required.
Paddy Tipping: Let us turn now to another
issue that is quite interesting, which is the relationship between
the NPSs and the current planning system. I am not entirely clear
about the nature of that relationship.
Q459 Mr Anderson:
Are you happy that the draft NPSs provide sufficiently clear guidance
both to the IPC but also to local planning authorities?
Mr Wells: It certainly does provide
some guidance but clearly there is potential for inconsistency
between the IPC regime and the Town and Country Planning Act regime.
That is partly inherent in the nature of the IPC process. It is
major infrastructure we are talking about and the Town and Country
Planning regime is dealing with smaller developments. The smaller
developments equally play a big part cumulatively in helping achieve
government targets. We do believe that there should be greater
consistency between the NPSs and the TCPA, for example. At the
moment, I think I am right in saying that the NPSs may be used
by the LPAs as guidance; it is the guidance in the NPSs themselves.
The LPAs have a whole raft of guidance that they have to use.
They have their own development plans; they have planning policy
statements; they have the national policy statements. We need
to ensure that national policy statements are given sufficient
weight so that there is consistency between the IPC regime and
the TCPA regime.
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