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Memorandum submitted by Centrica (NPS 92)
Introduction
Centrica welcomes the opportunity to give evidence to the Energy and Climate Change Select Committee on National Policy Statements (NPSs).
We
have been supportive of the planning reforms introduced in the Planning Act
2008. Our support has been driven by the urgency to bring forward the
construction in new energy infrastructure to secure
We believe that it is essential that the planning reforms take effect as soon as possible and consequently want to see minimum disruption to the plans agreed under the Planning Act. We also recognise there is a delicate balance between offering sufficient opportunity to the public to express their views and ensuring timely but fair planning decisions. Sizewell B took six years to secure Section 36 consent following a public inquiry that cost £300million and during which only 30 of the 340 inquiry days were devoted to local issues. To avoid a recurrence of such a prolonged planning process, it is essential that public views on national issues such as strategic need and safety should be addressed in the National Policy Statements and in the case of nuclear, the Generic Design Assessment. We also believe it is important to the effectiveness of the new planning regime that alongside the introduction of the NPSs, central Government or the IPC should embark on an awareness-raising campaign amongst key stakeholders, particularly Local Authorities, about the workings of the new planning regime and context that NPSs provide, so that projects are considered in the most effective manner possible.
Whilst
the planning reforms are vital, they will not be sufficient alone to bring
forward new low carbon investment in renewables, carbon capture and storage and
nuclear. A robust, long term carbon price
is required as a minimum to provide the right incentives to investors. Centrica
is supporting an amendment to the Energy Bill which would enable the Secretary
of State to introduce a mechanism to produce a floor in the price of carbon. We
believe such a measure has the potential to offer confidence in the carbon
price, improving the viability of low carbon investments in the
Our views on the technology specific National Policy Statements are outlined below:
Overarching (EN-1) and Gas Infrastructure and Oil & Gas Pipelines (EN-4)
Centrica fully supports the planning reforms and the need for a clear policy framework on consenting nationally significant infrastructure, which is generally provided by the National Policy Statements. Designation of the National Policy Statements is vital to deliver the energy infrastructure the country needs and avoid unnecessary planning delays. If the National Policy Statements are not designated, the questions of national need could be re-opened at each individual planning application introducing unnecessary delays. The National Policy Statements clearly set out the need for significant new infrastructure but could be strengthened to express the criticality of this need in the following areas: · A
diverse mix of energy supply sources, of all sizes, is needed for the · With existing power generating plant due to be decommissioned within the next 10 years, conventional generating plant will continue to be needed to ensure supply security whilst low carbon infrastructure is developed; this will include building new gas-fired power generating plant to meet energy demand in the transition period and provide flexibility in the longer term. · The forecast mix of annual gas production and imports in 2020 - Figure 3.3 needs to be clarified to show a breakdown of the supply sources, ie interconnector imports and LNG. · The role of the various gas supply sources in meeting peak daily winter demand in 2010 and 2020, expressed in graphical form. · The reliance on imported gas in the future and the role of gas storage infrastructure in meeting daily and seasonal swing demand, and helping to reduce associated price shocks. We believe the role of gas infrastructure in meeting other Government energy objectives and their other benefits to the economy could be better emphasised. Gas will still have an important role in future security of supply. We fully support the need for thorough environmental assessment, but more emphasis on a cradle-to-grave approach is needed for any project in the consideration of environmental impacts. We consider that carbon emissions and climate change are reasonably well considered in the NPSs. Industry understands the benefits of holistic consideration of any project, but needs the flexibility to submit more than one application to the IPC where commercial or practical reasons dictate (eg generating plant and overhead power lines) although the detailed submission should provide an understanding of the totality of the project. We fully support the non-spatial approach for gas infrastructure to allow the market to determine the best site from a commercial, environmental and strategic perspective.
Nuclear (EN-6) and associated documents
Centrica fully supports the arguments in the nuclear NPSs
setting out the clear need for nuclear power in the
New nuclear power stations will play a vitally important
role in the decarbonisation of electricity. It is important that new nuclear
power stations are constructed and start generating from 2018 with increasing
numbers over the following years. Nuclear power needs to be part of the
Nuclear power should be free to contribute as much as possible to the 25GW capacity gap left following 60GW of planned closures and a target 35GW new wind by 2025.
In the case of nuclear, we agree that it is necessary to
identify specific sites which are suitable for nuclear deployment. Due to the
unique siting requirements and the problems inherent with deploying nuclear
technology at sites that have not previously hosted nuclear facilities, the
number of potential nuclear sites in the
We believe Dungeness should have been included in the list of suitable sites. Of the 11 sites nominated, 10 have been included in the draft NPS. We believed that the only site to be excluded, Dungeness, should also have been included on the grounds of imperative reasons of overwhelming public interest. We believe all 11 sites are required to meet the 25GW capacity set out in the statement of need.
Centrica agrees with the government's conclusion that
effective arrangements will exist to manage and dispose of the waste that will
be produced by new nuclear power station in the
Fossil Fuels (EN-2)
Centrica supports the fossil fuel NPS. We believe the NPS sufficiently supports the development of CCS in line with previous legislation and guidance on the application of CCS to new, and later existing, coal-fired power stations. It is right that development of CCS is aimed at coal-fired stations given their high level of emissions in comparison to cleaner gas-fired stations. With regards to Carbon Capture Readiness (CCR) at all new power generation stations, the NPS is generally consistent with previous guidance and this is welcome. However one area where there appears to be a slight difference in emphasis is with respect to demonstrating the economic feasibility of CCS technology during the lifetime of any new proposed station. Section 4.7.1 of EN-1 states
".....In order to assure the Infrastructure Planning Commission that a proposed development is CCR, applicants will need to demonstrate:
· that sufficient space is available on or near the site to accommodate carbon capture equipment in the future;
· the technical feasibility of retrofitting their chosen carbon capture technology;
· that a suitable area of deep geological storage offshore exists for the storage of captured CO2 from the proposed combustion station;
· the technical feasibility of transporting the captured CO2 to the proposed storage area; and
· the economic feasibility within the combustion station's lifetime of the full CCS chain, covering retrofitting, transport and storage.
We believe the final bullet point may need clarification as to how applicants are expected to demonstrate future economic feasibility, in line with the previous guidance on CCR[1], which includes the following
65. Applicants should provide evidence of reasonable scenarios, taking into account the cost of the capture technology and transport option chosen for the technical CCR assessments and the estimated costs of CO2 storage, which make operational CCS economically feasible for the proposed development. As mentioned previously, Government will not consent any power station whose developers cannot envisage any reasonable scenarios under which operational CCS would be economically feasible.
66. The preparation of such economic assessments will involve a wide range of assumptions on each of a number of factors, and Government recognises the inherent uncertainties about each of these factors. There can be no guarantee that an assessment which is carried out now will predict with complete accuracy either in what circumstances it will be feasible to fit CCS to a proposed power station nor when those circumstances will arise, but it can indicate the circumstances which would need to be the case to allow operational CCS to be economically feasible during the lifetime of the proposed new station.
We also support the general concept that CHP should be properly considered for proposed developments, however there is some concern in the industry that without some accompanying qualification recognising the wide range of circumstances where CHP is not necessarily appropriate, the emphasis on the requirement for CHP may be overstated. It should be made clear that discounting CHP where it is technically or economically infeasible is a legitimate course for applicants to pursue.
It has been raised by some interested parties that perhaps the NPS with regards fossil fuels could or should be more specific with regards to locations for new developments as the nuclear NPS is. We do not agree with this and believe the non-spatial nature of the remaining NPS is the correct position. There are a great many factors involved in determining potentially suitable locations for fossil fuel development, and these cannot be assessed in the same way at the outset that they can for potential new nuclear developments.
Renewables (EN-3)
Overall, Centrica supports the Renewables National Policy Statement and believes it is generally of good standard, but notes that it lacks key opening statements on why new offshore wind infrastucture is required, and has inconsistencies in the level of detail given throughout the document.
The new reforms under the Planning Act should drive better consultation with local communities and the NPS consultation allows everyone to comment on the IPC framework for decision-making, which Centrica welcomes.
The Renewables NPS lacks a clear
opening statement on why the
For example, the Nuclear NPS starts with a clear statement of the need for that technology; background on the Government's policy in this area and key reasons why the named nuclear sites are important (page 6, from Nuclear NPS):
"The Government believes that, it is in the public interest for sites that can have new nuclear power stations constructed on them significantly earlier than 2025 to make a contribution in displacing CO2 as soon as possible." All ten sites in this NPS are needed. The IPC should start its examination of development consent applications for new nuclear power stations on the basis that need has been demonstrated and should give this need, and the benefits of meeting it, substantial weight in determining the applications."
Renewables NPS needs supporting statements such as the above to help promote investment and outline the key reasons why Round 3 and other future renewable projects are required, i.e. CO2 emissions, security of supply, EU Renewable targets.
The Renewables NPS is loosely worded in certain areas, and then too prescriptive in other areas. For example, statements such as the below can leave wind farm developers too exposed to unlimited surveys for the entire lifetime of the site, at considerable cost to developers:
"2.6.51 - Owing to the relatively new and complex nature of offshore wind development, the IPC should consider requiring the applicant to undertake monitoring prior to and during construction and during its operation in order to measure and document the effects of the development. This enables an assessment of the accuracy of the original predictions and may inform the scope of future EIAs."
Whereas in other sections, the NPS goes into specific detail so far as to describe minimum cable burial depths, something which would be site-specific and following detailed surveys. In both cases, Centrica suggests the wording should be revisited and emphasise the site-specific nature of offshore wind farm development.
January 2010 [1] Guidance on Carbon Capture Readiness and Applications under Section 36 of the Electricity Act 1989 is available on the DECC website via http://www.decc.gov.uk/en/content/cms/what_we_do/uk_supply/consents_planning/guidance.aspx |