The proposals for national policy statements on energy - Energy and Climate Change Contents

CONCLUSIONS AND RECOMMENDATIONS

Our inquiry
1.	This Report makes a number of recommendations, which we expect the Government to take account of before designating the energy NPSs. Given the importance of the Statements in delivering our energy and climate change objectives, we recommend that they be subject to a debate in the main Chamber on an amendable motion, offering the possibility of a vote. If there is not time to schedule a debate before the dissolution, it is imperative that this take place at the earliest opportunity in the next Parliament. (Paragraph 5)
2.	Because of the short timescale for our work, we have not been able to consider in detail each of the sites proposed for new nuclear development. It would, therefore, be inappropriate for us to form a judgement on their suitability. However, our inquiry has accumulated a significant body of evidence, particularly in relation to individual sites, which we hope the Department will take account of in addition to its own consultation responses. (Paragraph 6)
Government policy on energy and climate change
3.	The Government's energy and climate change targets and objectives influence crucially the level of need for new energy infrastructure. It is therefore vital that the overarching energy NPS states clearly what those objectives are, especially with regard to carbon emission reductions, energy security and affordability; how performance against those objectives is to be measured; and that it sets out more explicitly the link between those objectives and the need for new infrastructure. We recommend the Government reconsiders the current expression of policy in the draft NPS with this concern in mind. It would be wholly undesirable for sloppy or unclear drafting to result in unintended outcomes. (Paragraph 12)
4.	The Government's draft overarching energy NPS focuses primarily on power generation and does not take a sufficiently holistic view of the energy sector. We believe the statement of policy in EN-1 should make more explicit reference to transport and heating, especially as the electrification of these sectors will be crucial in achieving a low-carbon economy and will impact on the need for new generating capacity. Furthermore, although this would constitute an addition to Government policy, we recommend the incorporation of the Committee on Climate Change's proposal that the electricity sector should be fully decarbonised by 2030 if the UK is to be on course to meet its 2050 target for greenhouse gas emissions. This would provide a long-term view of the UK's energy requirements that would better inform the IPC's decision-making on new generating capacity. (Paragraph 15)
Establishing the need for new energy infrastructure
5.	The 2020 target for renewable energy means there is a clear and unambiguous need for new large-scale renewable generating capacity in the next decade, regardless of the level of expansion in small-scale renewables. The Department should examine whether this need is expressed adequately in EN-1. Moreover, we are concerned that there are perceived doubts over the credibility of the target for renewable generation. In the next Parliament the Government should evaluate whether its policy levers are commensurate with its stated objectives. A lack of buy-in to the achievability of the Government's targets will otherwise undermine the role of the NPS. (Paragraph 21)
6.	The draft overarching energy NPS states: "there is a significant need for new major energy infrastructure". However, the Government's own analysis for non-renewable generating capacity suggests the anticipated need over the next decade could be largely met already through projects that are either under construction or have received planning consent under the existing regime. If the Government accepts this, but maintains there is still a need for significant levels of non-renewable capacity, the implication is that it either believes its targets for renewable energy will be missed, or that nuclear or CCS infrastructure will not come forward in sufficient quantities to meet requirements. The Department should look again at the evidence put forward in EN-1. Furthermore, the current assertion of the need for new conventional generating capacity reduces the likelihood that the renewables target will be met. (Paragraph 26)
7.	National Grid believes gas imports will be much greater in the next 10 years than the Department's own analysis in EN-1 suggests. We recommend the Government looks again at its predictions for gas demand and adjusts its assessment of the need for new gas supply infrastructure accordingly. If it remains content with its assessment, it should explain why it differs so substantially to National Grid's analysis. (Paragraph 29)
Cumulative carbon emissions
8.	There is significant concern that decision-making by the IPC could give rise to an energy infrastructure that risks breaching the UK's carbon budgets, making it more difficult to decarbonise the electricity sector in the longer term. In the first instance, the Government must look again at the policy levers that give rise to this concern—particularly its reliance on the EU Emissions Trading Scheme as the main means of delivering low-carbon infrastructure. The Government's policy must ensure that projects would not come forward that threatened the achievability of its carbon reduction targets—otherwise this undermines the credibility of these targets. (Paragraph 36)
9.	In the event that planning applications may still come forward that threaten a breach of the carbon budgets, we believe there should be a role for the IPC in acting as a safeguard by considering the life-cycle carbon emissions of proposed new plant. However, we accept it is not the role of the IPC to monitor whether its decisions are in accordance with the carbon budgets. Accordingly, we recommend: (Paragraph 37)
	The inclusion of a specific requirement within the overarching energy NPS on applicants to conduct a full life-cycle carbon assessment of their proposals, including that of the supply chain;
	The Committee on Climate Change be made a statutory consultee for planning applications. To avoid delaying the application process, we would expect it to take a risk-based approach in determining which applications to comment on—for example, further new gas-fired power stations. The CCC and the IPC should then agree a memorandum of understanding that would set out a protocol covering the sharing of information on applicants' carbon assessments;
	The IPC should take account of any evidence the CCC chooses to submit with respect to particular applications; and
	The CCC should be required to report annually on the cumulative emissions arising from developments consented by the IPC as part of its overall monitoring of progress against the carbon budgets, which would flag up to Ministers the need for action if the Commission was at risk of locking the UK into a high-carbon energy mix.
10.	These measures would exist as safeguards, though we believe an intervention by the CCC would constitute a failure of Government policy. In this instance the Government should consider revising the NPS better to enable the achievement of its long-term targets. A potential future option could be the introduction of a hierarchy of preferred generation technologies to guide more directly the IPC's decision-making. (Paragraph 38)
Weighing need against impacts
11.	The IPC's decision-making will be informed by weighing the assessment of need set out in the NPSs against the potential impacts of developments. It is important, therefore, that the NPSs provide sufficient guidance to inform this balancing of factors. We recommend the Department reviews the draft NPSs to ensure consistency of language throughout the six main Statements and their supporting documents. We note too that, although a key role of the overarching energy NPS is to establish the case for need, the IPC should still expect to receive evidence on this issue in particular cases, for example when a proposal presents significant potential adverse impacts. (Paragraph 42)
Carbon capture and storage
12.	We recommend the Department looks again at its criteria for assessing carbon capture readiness (CCR) as set out in the draft NPS to examine whether they reflect sufficiently the EU Directive on the Geological Storage of Carbon Dioxide. The IPC's interpretation of the criteria will be crucial in determining the success of applications before it. We therefore also recommend the Government provides further clarification in the NPS on how it expects the IPC to assess applicants against the CCR requirements, having regard to the risks this might pose for the Government's carbon reduction targets. Clarity is also required about the necessity for the IPC to assess the economic feasibility of CCR, given the Commission's assertion to us that it is primarily a matter for the developer. This appears to contradict the draft NPS and the Government should settle the matter conclusively. We also recommend that the Government looks again at the wording of the NPS in relation to gas CCS, as concerns have been raised that the need to demonstrate economic feasibility could prevent its development. (Paragraph 48)
13.	The development of a future carbon dioxide network will be integral to the future deployment of carbon capture and storage. It is at present a glaring omission from the draft energy NPSs, which we recommend the Department rectifies. (Paragraph 51)
Biofuels and energy from waste
14.	The current draft NPS on renewables, EN-3, reflects the Government's current policy on the fuel sources for biomass and energy from waste power plant. However, we are concerned that the IPC is directed not to consider the sustainability of biomass fuel. Although to do this would require a change of policy, we believe the existing draft guidance would mean the IPC would not be able to examine fully all adverse environmental, social and economic impacts as it is required to do in paragraph 4.1.1 of EN-1. We therefore recommend the Department revises EN-3 to require all biomass power station applicants to make a full assessment of the sustainability of their fuel sources. We also recommend that the Department re-assesses whether its current guidance on energy from waste ensures that only waste that cannot otherwise be economically recycled or reused is sourced as feedstock for energy from waste production. (Paragraph 55)
Other renewables
15.	We agree that at this stage there is no urgency to include technologies such as wave and tidal in the renewables NPS. Nevertheless, EN-3 should set out the Government's intentions for how these technologies will be dealt with in future versions of the NPS. We note too that a decision over whether to pursue one of the proposed Severn tidal projects will require a substantial revision of EN-3, if not a new NPS in its own right. (Paragraph 57)
Combined heat and power
16.	We accept that, in the absence of a targeted policy to encourage combined heat and power, it is difficult for the NPSs to indicate a greater preference for CHP than that which is already present in the current draft. If in the future, the Government decides to introduce a more spatial approach to the non-site specific NPSs, we recommend it considers whether it could use this to promote further deployment of CHP where it is cost-effective to do so. (Paragraph 60)
Nuclear new build
17.	Planning consent from the IPC for new nuclear power stations will entail the storage of high-level radioactive waste on-site for up to 160 years. From the perspective of the community affected, it is a misnomer to describe this as interim storage as it will be several lifetimes between the commencement of a power station's operation and the eventual removal of waste from that site. A key objective of the new NPS framework is to focus discussion on planning applications on site-specific issues. As such, we believe on-site storage cannot be ruled out from the IPC's deliberations and that the nuclear NPS should contain significantly more detail on what interim storage will entail for local communities and for the integrity of any site chosen. (Paragraph 70)
18.	We do not dissent from the process adopted by the Government for identifying a site for the eventual storage of radioactive waste deep underground. However, we received conflicting evidence over whether this process would yield a suitable site and if the proposed approach of geological disposal was technically feasible. We are not convinced that the progress to date supports the Government's robust assertion that suitable arrangements will be in place to manage the UK's waste legacy. However, we note too that the Government has no choice but to find a solution, regardless of a decision on nuclear new build. Furthermore, we agree that the waste arising from new nuclear power stations will not pose a significant additional challenge in terms of finding a permanent storage solution. Therefore, as this is an issue of national policy, the political and ethical elements of which have been debated widely over the past five years, we agree that this should not be a consideration for the IPC with regard to individual applications. (Paragraph 71)
19.	Nevertheless, we believe the Government must continue to demonstrate progress in delivering a geological disposal facility for radioactive waste. Accordingly, we recommend the Department now sets out key milestones in EN-6 and reports progress against these to Parliament on an annual basis. This should include establishing which body will be responsible for consenting the site. (Paragraph 72)
20.	We believe it is not the role of the IPC to concern itself with the regulatory processes relating to new nuclear build that may be conducted in parallel to its own decision-making on planning consents, and which might otherwise lead to confusion and a duplication of efforts. However, the Commission should at least have cognisance of the wider regulatory framework as it is likely that it will receive submissions on issues outside of its remit when considering applications. We would therefore expect regular and open communication between the IPC, the Environment Agency, the Health and Safety Executive and other relevant bodies on these matters. (Paragraph 74)
21.	We note the reasons for the Government's exclusion of Dungeness from the draft nuclear NPS and the arguments against this decision put by the industry and the local community. We recommend the Department maintains an open mind throughout the current consultation, that it considers carefully the evidence submitted to the Committee by Shepway District Council and any other evidence submitted during the consultation and, if necessary, reconsiders its position. (Paragraph 78)
The NPSs as planning documents: the draft nuclear NPS
22.	We understand the necessity for making the nuclear NPS site-specific as to do otherwise would be less than open in a situation where there are so few alternatives. We are concerned, however, that the inclusion of 10 sites coupled with the statements that all are needed and the Government can find no alternatives that would better respect the integrity of designated European sites may place undue pressure on the IPC to permit developments on those sites. We are reassured by the IPC's statement that if local impacts did outweigh national benefits on these sites then it would refuse the application. However, we feel that the independence of the IPC could be more clearly expressed in the NPS in terms of its ability to refuse consent for any of the 10 nuclear sites. The Department should also clarify whether its opinion on Imperative Reasons of Overriding Public Interest (IROPI) refers to the nuclear NPS as a whole or to the selection of individual sites. (Paragraph 83)
The NPSs as planning documents: the non-nuclear NPSs
23.	Whilst we accept EN-1 to 5 should not be as specific on the location of energy infrastructure developments as the nuclear NPS, we believe there are ways in which the non-nuclear NPSs could take greater account of spatial issues. Possible examples include: those areas of the transmission network requiring reinforcement to meet the UK's renewable energy targets; the Welsh Assembly Government's strategic search areas; the DCLG/DECC work on regional capacities for renewable generation; and areas with suitable geology for gas storage. Such an approach would not constrain the choice of sites for developers but would provide valuable guidance and an incentive to bring applications forward in the most appropriate locations. Nor would it constrain the decision-making of the IPC, which should treat all applications on their merits. It could also facilitate greater public engagement in the NPS process. (Paragraph 90)
24.	We believe the Government has not fully explored the potential for some form of English national spatial strategy. Such a document could provide the means of drawing together the many spatial aspects and implications of not only the energy NPSs, but all the NPSs. It could also provide the means of relating policies in the NPSs more clearly to the range of existing national spatial policies and environmental designations. However, we do not believe such a strategy should be a pre-requisite of designation of the energy NPSs. (Paragraph 92)
The relationship between the energy NPSs and the overall planning system
25.	We are concerned that the current status of the NPSs within the wider planning system is, at best, ambiguous. Whilst the NPSs' role in relation to the IPC is embodied in statute, their important role in relation to Local Planning Authorities (LPAs) and other bodies has not been addressed with sufficient thoroughness. For example, it is not clear what weight LPAs should give to NPSs in their decision-making. Nor is it clear what happens in cases of conflict between an NPS and other Government statements of planning policy. This ambiguity risks creating perverse incentives for developers within the planning regime. (Paragraph 101)
26.	We note the Chief Planner has attempted to provide some clarity on the role of the NPSs within the planning system. However, this intervention has raised more questions than it has answers. We recommend the DCLG should first consult on, and then issue, definitive guidance on the role that all NPSs will play in the preparation of plans at the regional and local levels and in informing and guiding decision-makers other than the IPC in considering applications for relevant infrastructure projects. This guidance should clarify whether there is a hierarchy of planning documents, for example in relation to NPSs and Planning Policy Statements, and how decision-makers are to deal with conflicts between different policy statements when they arise. We do not believe the Government should designate the energy NPSs until this guidance is in place. (Paragraph 102)
Associated infrastructure
27.	We support the flexibility within the overarching NPS for applicants to decide whether to include associated development within an application to the IPC for consent for the main NSIP development or to apply for consent for it via other routes. However, we are concerned that there are potential risks of delay where associated infrastructure falls under a different planning regime. This opportunity for delay strengthens the case we have already made for a clearer statement of the relationship between an NPS and the rest of the planning system. (Paragraph 106)
The Department's consultation
28.	The energy NPSs will play a key role in determining our future energy mix. It is clear that the Government's consultation has not gone far enough in engaging the public. It is unfortunate too that the publication of the draft NPSs has come so late in the current Parliament, thus constraining the time available for consultation and parliamentary scrutiny. We recommend the Government learns from this experience and for future NPSs considers more innovative ways, particularly with regard to greenfield sites, in which it can engage the public in these important documents. We were particularly concerned that the late inclusion of greenfield sites into the consideration process leading towards the site-specific NPS effectively prevented either a clear comparison between possible greenfield sites or effective consultation on those sites proposed. The Government should also ensure it provides adequate time for Parliament to complete its scrutiny, preferably after its own consultation. The Government will also need to review the resources available to local authorities to ensure they are able fully to undertake their role in the planning process. (Paragraph 120)
Appraisal of sustainability
29.	The lack of guidance on the conduct of an appraisal of sustainability for an NPS means it is difficult to determine whether the Department has fulfilled its requirements under the Planning Act 2008. We recommend the Government produces such guidance to assist departments in the future production of NPSs. We note the concerns raised by the environmental NGOs over the lack of consideration of policy alternatives within the appraisals for EN-1 to 5, particularly regarding the possibility of energy demand reduction. This contrasts with the approach taken in EN-6, which considers explicitly the "realistic option" of a nuclear NPS that prohibits new build, despite this being counter to Government policy. The Government must ensure consistency of approach across its appraisals of sustainability. It should also make a better assessment of the cumulative environmental impacts of new generating capacity; provide more guidance for the IPC on the expectations on developers to monitor the environmental impacts of their developments; and link more explicitly the appraisals to the NPSs. (Paragraph 125)
The importance of good design
30.	We do not consider the issue of good design is treated with sufficient rigour in the draft NPSs. We would look for a much stronger message on design that is more in line with the Government's existing stated policies expressed, for example, in Planning Policy Statement 1 and, in this, we are heartened by the Minister's commitment to look again at the current wording in the NPSs. (Paragraph 128)

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Prepared 23 March 2010