Appendix: Government
Response
Introduction:
The Department broadly welcomes the Committee's report
on "The Future of Marine Renewables in the UK" (HC 1624),
published on 19th February 2012. It is encouraging
that the Committee shares the Department's view that the emerging
wave and tidal sector has the potential to benefit the UK in terms
of creating an increasing level of secure, renewable energy generation
in the period to 2030 and beyond.
The Government has clearly set out its vision for
the wave and tidal energy sectors as part of its overall renewables
policy in the UK Renewable Energy Roadmap, published in July 2011.
As noted in the Government's evidence to the select Committee,
the UK now has the most advanced marine energy testing and deployment
infrastructure and the world's most comprehensive support regime.
This has been further underlined by the Government's proposals
to offer support to wave and tidal stream energy at 5 ROCs/MWh
under the Renewables Obligation through its banding review and
by the recent launch for applications of DECC's £20m Marine
Energy Array Demonstrator (MEAD). The development of the Feed-in-Tariff
with Contract for Difference under the Government's Electricity
Markets Reform and the creation of the Green Investment Bank will
ensure that the appropriate levels of support are in place in
good time to provide the long-term investment certainty needed
to commercialise the industry.
The Government is committed to continuing to work
with partners across the public sector and with the industry to
ensure the success of marine energy in the UK. The ministerially-chaired
Marine Energy Programme Board and its various working groups form
the main instruments for this activity and the Low Carbon Innovation
Coordination Group (LCICG) ensures that various support initiatives
across the public sector innovation funding bodies and Devolved
Administrations operate in a complementary manner.
In its report the Committee raised a number of detailed
comments on a range of issues. These are dealt with separately
below.
Responses to conclusions, recommendations and
comments:
29. While we recognise that funding is limited
in the current economic climate, we nevertheless feel that the
Government's funding for marine renewables represents a modest
investment for what is a world leading industry with the potential
to bring significant benefits to the UK.
It is necessary for Government to fund a number of
innovative low carbon technologies in order to meet our 2050 targets,
ensure secure future energy supplies at the lowest possible cost
to the consumer and create new commercial opportunities. The LCICG
Technology Innovation Needs Assessment (TINA) project has worked
to identify those technologies likely to be important in delivering
our energy and climate change targets while also generating economic
benefit for the UK. Marine energy is one technology family covered
by the TINA process although there are other technologies, such
as offshore wind, that are likely to generate greater low carbon
and long-term growth benefits for the UK. Government investment
in these low-carbon technologies needs to be proportionate to
their potential benefits.
Although, as noted above there is a need to ensure
that Government resources are shared appropriately across a range
of policy priorities, the Government believes that it has created
both the world's most comprehensive and most generous support
environment for the development and deployment of marine energy.
In addition to the grant support measures which were outlined
in Annex B to the Government's evidence paper to the Committee
a number of additional support measures have been launched. Over
the last two years, the sector has benefitted from innovation
support from DECC's Marine Renewables Proving Fund (total £22m),
the Energy Technologies Institute, the Scottish Government and
the Technology Strategy Board. In addition, since the beginning
of the year, DECC has launched the call for applications for its
£20m MEAD fund, the Technology Strategy Board, Scottish Enterprise
and Natural Environment Research Council (NERC) have announced
a £10.5m research fund, the Scottish Government have launched
the £103m Renewable Energy Investment Fund (REIF) and the
Scottish Government are continuing the development of their £18m
Marine Renewables Commercialisation Fund (MRCF) to be launched
later in the year. In addition, under the current Renewables Obligations
(RO) banding review proposal, marine energy will receive 5 ROCs/MWh
with a 30MW cap over the life of the RO scheme for capacity deployed
up to 2017.
We believe that, cumulatively, these schemes represent
an appropriate level of funding to assist the sector's development
towards commercialisation.
33. There may be a case for the LCIG to adopt
a more specific cost reduction goal. The Technology Strategy Board
(TSB) explained that if the Government set out clearly the extent
of cost reductions that it expected the industry to achieve over
a set timescale, it would be easier to assess the prospects for
the sector and to make decisions and funding in the future.
35. The Low Carbon Innovation Group is right to
focus on reducing the cost of energy, but it should be more specific
about the progress it would like to see. Without setting out its
expectations clearly, it will be difficult to assess the efficacy
of policies and to make decisions on the future funding for the
marine energy sector. We recommend that DECC and the LCIG adopt
a formal cost of energy target of 14p/kWh by 2020. This will give
a clear indication of Government expectations to the industry.
The LCICG's TINA project has looked into the potential
cost reduction innovation can deliver for low carbon technologies.
The issues surrounding the setting of any meaningful cost reduction
trajectories are complex, especially given the still early stage
of development of the marine energy sector and the large uncertainties
around future costs. Because of these uncertainties, the Department
does not agree with the Committee's recommendation that we should
adopt a formal cost of energy target at this point in time. However,
DECC will continue to review whether the development of cost reduction
trajectories for the sector would be helpful, and over what timescales.
40. As things stand, both the industry and the
Department view the 200-300MW figure as a "soft target",
which they hope will be exceeded. The Minister said that setting
a target for the longer term (beyond 2020) "may be something
that we will want to revisit".
The Department does not view the 200-300MW figure
set out in the Roadmap as a "soft target". In publishing
the Renewable Energy Roadmap in July 2011, we set ranges for all
technologies to recognise the uncertainty in projections to 2020,
but made clear that the ranges were not limits to our ambition.
If sectors are able to reduce costs and, therefore, achieve higher
levels of deployment then this is welcome.
We also undertook to publish an annual update on
the Roadmap in which we will provide an update on progress on
deployment of key renewable technologies and actions to accelerate
additional deployment, such as those carried out under the Marine
Energy Programme.
41. We recognise the Department's concerns about
introducing a deployment target to soon in the development of
the technology. However, we also recognise the value that targets
can have in demonstrating political commitment to the sector.
A more visionary approach from Government could help to boost
confidence and to drive the pace of development of the sector.
The Government should not rule out setting an ambitious deployment
target for marine renewables in the future and should consider
introducing such a target if cost reductions to 2020 remain on
track.
Given the considerable uncertainty over which technologies
will emerge as the most economically efficient and appropriate
to deliver the necessary carbon reductions and energy security
over the coming decades, we need to ensure that we retain the
maximum possible flexibility in delivering these goals. Through
the Electricity Market Reform and supporting policies, the UK's
aim is to provide the framework for competition between all low
carbon technologies - renewables, nuclear power and carbon capture
and storage - to drive innovation and cost reduction, and to hedge
against the risk of one technology failing to reduce costs or
to maintain public acceptability. Setting targets for specific
renewables technologies could lead to a situation where the UK
might be foregoing the most cost-effective carbon savings.
44. A key risk associated with an overly complex
funding landscape is that money may be wasted. As well as the
potential for duplication and overlap between schemes, there are
also inefficiencies associated with projects having to apply to
multiple schemes and the administrative costs associated with
running multiple organisations.
The Low Carbon Innovation Coordination Group (LCICG)
has recently expanded its remit and membership - and now includes
all of the key UK public-sector backed funders of low carbon innovation
- including Scotland and other Devolved Administrations. The
strengthened LCICG will facilitate closer working across government
departments and other publicly funded organisations, to ensure
public support is focused on key technology areas and value for
money is optimised. The close partnership working approach adopted
by LCICG members should ensure scheme overlap is avoided and that
it achieves better outcomes than a single organisation could deliver.
A single body focused on low carbon innovation would
find it challenging to absorb and manage the broad remits of the
existing organisations in the landscape. The existing innovation
landscape allows for synergies to be drawn on and captured from
sectors beyond low carbon, such as the Research Councils focus
on the highest quality academic research; Technology Strategy
Board focus of driving innovation through wealth creation, especially
supply chain collaboration and knowledge transfer; and the Department
of Energy and Climate Change, delivering secure energy on the
way to a low carbon future.
46. However, the current membership of the LCIG
excludes one of the UK's major funders of marine renewables: the
Scottish Government.
In late 2011 the Low Carbon Innovation Coordination
Group (LCICG) was expanded to include the Scottish Government
and Scottish Enterprise. Other parties with a direct interest
in innovation in low carbon technologies have also joined the
group, including Ofgem, Welsh Assembly and the Department for
Transport.
50. At a time when resources are limited, it is
essential that money is spent wisely and efficiently. The complicated
funding landscape for marine renewables creates a risk of overlaps
and inefficiencies in the way the programmes are funded. We are
pleased that the Minister acknowledged that the funding landscape
is too complex and recommend that DECC take steps (beyond the
creation of the Low Carbon Innovation Group) to address this problem.
The Government's Low Carbon Innovation Delivery Review
recently looked closely at the landscape for the support of low
carbon innovation in the UK. The review concluded that, whilst
the landscape has been more complex than ideal, there are compelling
reasons for the continued involvement of a range of organisations
in providing innovation support - including for marine energy.
The technology development needs of marine energy are diverse
with innovation important at all stages of technology development.
The sector benefits from having a range of support programmes
that can address those different innovation needs in different
ways and a single organisation would have difficulty delivering
this range.
The funding landscape for marine renewables, as well
as other low carbon technologies, has been recently simplified
by the closure of the Regional Development Agencies (RDAs) and
the DECC's decision to no longer fund the Carbon Trust via a core
grant, from the end of March 2012.
With multiple programmes there is indeed a risk of
overlap or inefficiencies however that risk is being managed by
the Low Carbon Innovation Coordination Group (LCICG). The LCICG
is ensuring that the range of Marine support programmes are part
of a coordinated portfolio of support without unproductive overlaps
and will ensure that the portfolio is clear and accessible to
industry. The Scottish and Welsh Governments, who make their own
independent decisions on how to utilise their innovation funding,
have recently joined the LCICG which will further ensure
that all UK public sector backed innovation funders have clear
sight of each others' programmes and plans. With these and other
changes being implemented by the LCICG, the coordinated Marine
innovation programme will deliver the maximum impact from available
public sector innovation funding.
60. The Scottish fund will go some way to making
up the funding "shortfall" that is perceived by some
members of the industry, although this may be more through luck
than design; it is not clear to us whether DECC had any knowledge
of the Scottish Government's plans ahead of Mr Salmond's announcement.
DECC was not party to the internal discussions on
budget allocation within the Scottish Government or on the decisions
concerning the timing of their announcement. We would not, necessarily
expect to be included in such internal policy and political discussions
by a devolved government.
62. The £20m funding provided by DECC to
underpin a world-leading industry is not large, even when combined
with the additional funding provided by the Scottish Government.
DECC must ensure maximum value for money and must avoid duplication
and overlaps between the schemes. The Department should identify
how it will achieve this. We urge DECC to try to keep the industry
in mind when discussing options with the Scottish Government and
recommend that DECC minimises bureaucracy for applicants, for
example through running a joint pre-qualification process.
As already outlined above, the LCICG acts to ensure
that there is effective coordination between the various funding
bodies across Government and the Devolved Administrations. DECC
has ensured that the industry and the Devolved Administrations
have been closely involved in the work undertaken by the Marine
Energy Programme Board (MEPB) and its Finance Working Group in
supporting the design of the MEAD. Similarly DECC officials have
attended all the Scottish Marine Energy Group (MEG) meetings which
have brought together interested Scottish public sector bodies
and the marine energy sector to advise on the design of the Scottish
Government's funding for the sector. DECC and the Scottish Government
are actively working to ensure that any potential bureaucracy
related to the application processes to DECC's MEAD and the Scottish
Government's MRCF are minimised. However, the different timings
of the development and launch of the two schemes has precluded
a formal joint pre-qualification process.
66. The Minister told us that wave and tidal were
not within the initial key priority areas for the [Green Investment]
Bank but that he expected some of the 20% of the portfolio that
will be used outside of the priority areas to go to marine renewables.
He went on to tell us that large-scale marine renewable funding
opportunities were not likely to be available until "later
in this decade at least", when commercial scale projects
might start to appear.
67. We welcome the initial support from the Department
for accessing other sources of funding such as [...] and Green
Investment Bank.
As the Minister noted at the Select Committee evidence
session, given the current early stage of development of the marine
energy sector, it is not currently a priority area for the Green
Investment Bank (GIB). The selection of the GIB initial five
priority sectors was made against the criteria of:
- green impact;
- additionality;
- capacity for commercial investment in mature
infrastructure over the period to 2015;
- and the importance of complementing, and not
duplicating, other Government policies including financial support.
As a relatively early-stage technology compared with
other green sectors, marine energy displayed relatively low commercial
investability in mature infrastructure within the time-frame considered.
Other government policies and finance initiatives are focused
on prioritising financial support for marine energy at its current
stage of development. Government and the GIB Board will reconsider
priority sectors periodically.
While at least 80% of the funds committed by the
Bank over the Spending Review period will be invested in the priority
sectors, the intention is for the Bank to be given an overall
broad remit to focus on green infrastructure. This would include
the marine energy sector. All potential investments will be assessed
by the Bank against green impact, sound finances and additionality.
Once the sector has reached deployment at a commercial
scale, it will be able to seek funding for deployment projects
from the GIB alongside any other renewables developers. However,
as with the potential for discretionary investments outside current
priority areas, all decisions on funding will be taken in the
round and on a commercial basis by the Bank. Any marine project
applying for funding will need to compete with other eligible
applicants.
67. As the UK is a leader in the development of
wave and tidal energy, DECC should actively promote the potential
benefits of marine energy at the European level and maximise the
opportunities for UK-based marine renewable projects to benefit
from European funding schemes.
The UK, through DECC, is already leading the development
of a European Member State Ocean Energy Interest Group. This
has the express purpose of securing an active partnership between
interested Member States, industry via the European Ocean Energy
Association and their members and the European Commission to help
develop the marine energy sector together as quickly as possible.
This includes pressing for increased funding for marine energy
through EU funding programmes.
The first product of the Interest Group was a Position
Paper, "Towards European industrial leadership in Ocean energy
in 2020", developed and supported by the UK, Denmark, France,
Ireland, Norway, Spain and Portugal, along with Belgium and the
Netherlands who have longer term interests. This was distributed
to all Member States and to the Commission by Charles Hendry during
the last EU Energy Council meeting in Brussels last November.
Follow-up meetings are now taking place involving the Commission
to discuss joint next steps. These meetings will also involve
the Management Board of the European Energy Research Alliance's
Ocean Energy initiative under the EU's Strategic Energy Technology
Plan. This in turn, has strong links with the Ocean Energy work
going on under the International Energy Agency.
The intention is to use this activity to move the
industry forward in a coherent way ,that builds the Commission's
and other partners' confidence to encourage them to invest in
the sector. UK leadership aims to ensure that our interests play
a central part in this development and our companies and researcher
community have access to increased EU level support.
72. This was despite the fact that the industry
itself had proposed a 300MW limit on the total volume of capacity
supported at this level in order to limit the total costs to the
consumer. Although witnesses told us that the likelihood of there
being considerably more than 300MW of capacity in the water before
2017 was very low, it nevertheless seems strange that DECC does
not intend to apply a cap, given the recent difficulties experienced
with feed-in tariffs for solar PV.
The Department has undertaken both modelling of the
potential for marine energy deployment and analysis of sector
plans for deployment to 2020. On the basis of this work DECC
is content that an overall deployment cap was not necessary and
that the proposed 30MW project cap provided sufficient protection
against significantly higher levels of deployment. This position
was endorsed by the Finance Working Group of the MEPB. Significantly
greater than anticipated deployment of marine energy will only
occur if previous deployment has considerably driven down the
cost of marine energy. Given the expected level of deployment
and timescale considered to 2017, this is extremely unlikely.
However, in this very improbable case, the Department would have
the powers to adjust the RO bands accordingly.
74. The Minister told us that he was not in a
position to say what the likely costs of marine energy would be
in 2017 and therefore did not know what level of support would
be offered beyond 2017. However, he also told us that the Government
planned to provide more clarity as plans for electricity market
reform were developed. He said "by 2013-14, the industry
will have absolute certainty about what the forward long-term
funding arrangements will be—well before we come to the
end of the ROC regime".
75. The industry needs clarity about the level
of revenue support it can expect to receive beyond 2017 as soon
as possible. We welcome the Minister's commitment to provide absolute
certainty on this issue by 2013-14. We will monitor whether DECC
keeps to this timetable and urge the Department to deliver its
decision in 2013 rather than 2014.
77. Revenue support should be reduced over time
as technologies mature and costs fall. The Government needs to
consider carefully how it will implement any changes to the level
of revenue support in future, including the rate at which reductions
are made and the criteria that are used to determine when reductions
are introduced. Government must communicate its intentions on
both these points clearly to industry at the same time as it announces
the level of support that will be provided beyond 2017. Above
all, the Government must avoid a repeat of the situation with
solar PV Feed-in Tariffs, where drastic reductions were made at
very short notice.
78. The Government has proposed increasing the
level of support to wave and tidal energy devices that are deployed
before 2017. Since very little deployment is expected before this
date, the overall cost to the consumer will be insignificant.
However, looking beyond 2017, the Government will need to balance
the interests of consumers against the needs of the industry.
The Government should consider capping the total volume of capacity
that can benefit from revenue support in any future support regime,
perhaps at the level of any deployment target.
The Feed-in Tariff with Contract for Difference (FiT
CfD) scheme is aimed at: providing revenue stability for low carbon
technologies; allowing industry the confidence to invest in these
technologies; and decarbonising UK electricity generation. To
achieve this we recognise that it is imperative that we allow
industry as much visibility of the scheme as possible, and will
therefore shortly be publishing a Draft Operational Framework
which will set out information on the CfD arrangements including
details of how strike prices will be set and FiT CfDs allocated.
Between the publication of the Draft Operational Framework and
its finalisation we will continue to work closely with industry
to ensure that the detail of how the FiT CfD scheme is to operate
is clear, ahead of the expected implementation date in 2014.
Information on revenue support levels will be provided
in good time to allow investment decisions to be made. Government
is focused on ensuring that appropriate support is provided to
achieve decarbonisation in a manner which minimises the cost to
the consumer. As part of this, Government may adjust levels of
revenue support offered to reflect maturation of technologies
and falling costs. However the Government would ensure that it
has provided the industry with appropriate visibility of the changes
required, with sufficient notice, before implementing them.
82. The availability of grid connections will
be a critical factor in determining the future of wave and tidal
power in the UK. We welcome DECC's acknowledgement of this and
urge the Department to ensure that investment in new grid connections
keeps pace with development of the industry.
DECC has already improved grid access for new generators
by introducing an enduring 'Connect and Manage' grid access regime
in August 2010. The regime built on successful interim arrangements
introduced by Ofgem, and is enabling all types of new generation
to connect to the network much more quickly. This is particularly
the case with tidal power, where 14 projects (Islay Tidal Farm,
Duncansby Stages 1-3, Marwick Head Wave Farm Stages 1-3, Stromness
Wave Farm Stages 1-3, Meygen Stages 1-4) with a total capacity
of 438MW have benefitted from 'Connect and Manage' by having their
connection dates advanced by an average of over six years.
The long-term solution to connecting new generation
is investment in the network. It is for network transmission
owners to propose the scale, location and timing of new network
investment based on information such as generation project timescales.
The vast majority of wave and tidal projects planned so far would
connect to the Scottish Hydro Electric Transmission (SHETL) network
in Northern Scotland. SHETL has submitted publicly available plans
to Ofgem for approval for network development from 2013-21 which
include the network potentially required to accommodate marine
energy. DECC is maintaining a close interest in these plans given
their potential importance to meeting the Government's 2020 renewable
energy targets.
83. The transmission charging regime was also
highlighted as a concern. Under the current arrangements, higher
charges are levied for generators that are located further from
the main centres of demand. This means that wave and tidal generators
situated in remote areas like North Scotland will have to pay
some of the highest charges for using the national grid (in the
case of Orkney, this is compounded by the need to pay an additional
charge for a link to the mainland). Witnesses told
us that high transmission charges may impede the development of
the industry.
84. At the time of taking evidence, the regulator
Ofgem was in the process of assessing the current charging regime,
to consider whether it is still suitable given the changing nature
of the generation mix and the challenges of decarbonising the
electricity system. Witnesses to our inquiry were hopeful that
the outcome of this review would improve the situation for wave
and tidal. On 20 December 2011, Ofgem published its initial findings,
which recommended incrementally changing the current approach
rather than moving to a "socialised cost" model, where
all generators would pay a uniform charge, regardless of type
and location. Ofgem is due to conclude its consultation and make
a final recommendation in Spring 2012.
DECC has submitted a Government response to Project
TransmiT - Ofgem's consultation on the transmission charging regime.
The response welcomed Ofgem's review process to ensure that the
charging regime would deliver our shared goals of facilitating
low carbon electricity generation and maintaining security of
supply, whilst minimising consumer costs. The DECC response supported
Ofgem's recommendations to rule out the full socialisation option
because of significantly increased network costs and therefore
high additional costs to the consumer. DECC supported the development
of a charging regime based on the "Improved Investment Cost
Related Pricing (ICRP)" option on the basis that this approach
has the potential to better reflect the burden that generators
impose on the system. In supporting this approach, DECC stressed
the need for future development of the charging regime to take
full account of the impact of the "Improved ICRP" option
on overall network and generation costs as well the investment
decisions of new and existing generators across GB. The response
also encouraged Ofgem to consider the concerns raised by the developers
of renewable generation on the Scottish Islands to ensure that
the outcome of Project TransmiT treats the Scottish Islands fairly.
87. Requirements on the industry to underwrite
the cost of new grid connections place an excessive burden on
individual developers. DECC should use the Marine Energy Programme
Board to explore opportunities for establishing consortia that
could collectively underwrite new links. [...] If this approach
is unsuccessful, DECC may need to consider the case for Government
taking on this liability.
The requirement for industry to underwrite the cost
of new grid connections is well established practice that minimises
the risks of stranded or under-utilised assets, and therefore
unnecessary costs to the consumer. DECC is also aware of concerns
expressed by some generators that the arrangement can act a s
a barrier to entry. We therefore welcome the fact that Ofgem,
as the independent regulator, is currently consulting on a proposal
that would more accurately reflect the balance of risk between
the generator, the transmission network owner and the consumer.
The "Connection and Use of System Code Modification Proposal
192: Enduring User Commitment" (CMP192) would reduce the
up-front underwriting obligation placed on new generators, including
those connecting in offshore locations, and significantly reduce
the securities required against those obligations. Ofgem
intends to make a final decision in April 2012, and if the proposal
is accepted, it would take full effect from April 2013.
DECC will continue to follow the development of CMP192 closely
but, in the light of the progress that has been made, and subject
to Ofgem's final decision on the proposal, we currently see no
need for any additional measures relating specifically to the
underwriting obligations of marine energy projects.
88. Several witnesses noted the "one-stop-shop"
approach adopted by Marine Scotland and suggested that other UK
marine licencing bodies could consider following this example.
DECC is aware of the work being carried out by Marine
Scotland on consenting and licensing. Streamlining the licensing
process for marine energy - through a similar approach to Scotland
or through different means - is an issue which is included, amongst
other things, in the work of the Offshore Renewable Energy Licensing
Group (ORELG) convened by the Marine Management Organisation (MMO)
and whose membership includes both DECC and Marine Scotland.
Under the auspices of the MEPB, DECC has set up a
Working Group on Planning and Consenting, which ensures that the
sector can feed into the work carried out by Marine Scotland and
the MMO on developing the licensing and consenting framework for
marine energy across the UK. The Department will continue to
monitor the development of this framework, ensuring it is streamlined
and effective.
92. The development of wave and tidal energy must
not happen at the expense of marine biodiversity. Because of the
lack of data about marine wildlife in UK waters, developers may
only discover that an area is environmentally sensitive late in
the development process, leading to costly changes in plans. Identifying
potentially sensitive areas in advance of leasing rounds would
avoid this risk and reassure conservation organisations that the
deployment of marine renewables will not threaten marine flora
and fauna. We recommend that DECC cooperates with the industry
and other interested stakeholders to deliver a baseline survey
of areas of strategic interest, in advance of any further leasing
rounds. The Marine Energy Programme Board would provide a good
forum for this discussion. In addition, an agreement is needed
on the criteria that would be used to determine whether a particular
area was too environmentally sensitive to allow development. This
could be drawn up by an independent body of expert marine scientists,
like the Science Advisory Panel for the Marine Conservation Zones,
supported by relevant statutory bodies, such as the Joint Nature
Conservation Committee, Natural England and the Marine Management
Organisation. This body could also have the power to review whether
criteria have been appropriately applied when disputes emerge.
The Government is committed to ensuring that the
development of marine renewable energy does not occur at the expense
of the marine environment. The Department's role in facilitating
marine energy development is recognised. Indeed Environmental
survey work in advance of future deployment is a function of DECC's
Strategic Environmental Assessment (SEA) work. The purpose
of the SEA process is to determine potential environmental sensitivity
in relation to projected activities.
To balance the requirement of project developments
with environmental protection effectively, consideration beyond
simply identifying "sensitive areas" will be needed.
Indeed an understanding of the likely effects of marine energy
device deployment (for permitting and assessment purposes) will
only be as good as our understanding of the baseline environmental
conditions prior to deployment and the potential effects from
the technologies being deployed on those features and any far-field
effects. Currently the understanding of these issues is not well
developed for wave and tidal technologies, nor, in some cases,
for offshore wind. DECC recognise this. For this reason,
we continue to look to conduct targeted research on the potential
effects of technologies on different features under the auspices
of the Offshore SEA programme. DECC's Offshore SEAs are
subject to a wide consultation process both on the scope and the
environmental reports. The Statutory Advisers listed in
paragraph 92 are on the SEA steering group and are consulted throughout
the SEA process.
In addition to identification of potential sensitivities
by DECC through the Offshore SEA programme, there is a requirement
for developers to consider the potential environmental impacts
of a deployment as part of their project development and consenting
process. In particular developers must conduct Environmental Impact
Assessments and where relevant, gather data for the purpose of
Habitats Regulations Assessment, prior to applying for consent
for a project. On this basis it is highly unlikely that
a developer would only find out that an area "was environmentally
sensitive late in the development process".
Due to the current uncertainties around the links
between areas' sensitivity and effect of technologies on these
different areas, we do not believe that setting criteria to identify
areas being "...too environmentally sensitive to allow development..."
would be sensible at this point in time. To date no exclusion
zones have been put in place for marine renewables on such a basis.
A preferred approach, where appropriate, is that of Adaptive Environmental
Management, otherwise known as "Deploy and Monitor".
We are currently adopting this approach for Tidal Energy Ltd's
Deltastream project in the Ramsay Sound, off the coast of Pembrokeshire.
An extensive monitoring programme is helping us to understand
how marine mammals respond to the unit during a 12 month pilot.
This is being overseen by an Environmental Management Committee
comprising the developer and key statutory stakeholders, including
DECC. In the current early stage of development of this sector,
the scoping stage for developments and earlier dialogue between
developers and key statutory stakeholders (such as JNCC,
MMO and others) for such developments may be more useful than
the setting of prescriptive criteria.
Rather than using the Marine Energy Programme Board
or the Science Advisory Panel for the Marine Conservation Zones
(or establishing a new group) we recommend the forum for discussion
of baseline surveys and criteria should remain with the already
established SEA Steering Group, since this incorporates the range
of valid stakeholders and undertakes such discussions as part
of its role supporting the SEA process. The Marine Energy
Programme Board can feed into these discussions through the work
of its Planning and Licensing Working Group.
95. We are concerned about the shortage of skilled
scientists and engineers in the workforce. The Government must
encourage more students into these disciplines now so that they
are able to take advantage of the new jobs that could be created
through a UK-based wave and tidal industry. We note that students
may be more likely to select science and engineering subjects
if they felt confident that there would be suitable jobs available
once they qualified. The level of confidence that DECC can provide
about the future of the wave and tidal industry in the UK may
therefore have an impact on education and training choices.
STEM skills will be needed to make the transition
to a green economy, both in key energy sectors (including marine
renewables) and more widely across the economy. This will assist
the UK to lower carbon emissions and make better use of resources.
The STEM pipeline is improving at all levels:
- Uptake of science, technology,
engineering and mathematics subjects at GCSE and A level has been
rising steadily. In 2011 A level Chemistry (up 9.2%), Mathematics
(up 7.8%), Biology (up 7.2%), Physics (up 6.1%) and Further Mathematics
(up 5.2%) were amongst the top-ten year-on-year increases
- At undergraduate level, in 2010/11 the number
of UK-domiciled STEM entrants was up by 1% (non-STEM subjects
saw a decrease of 1%)
- In 2010/11 UK domiciled STEM PhD entrants were
up 6%
However more needs to be done to continue this push
and improve the relevance of what students learn. Many (up to
50%) STEM graduates choose not to work in STEM occupations. While
this is a valid choice, there is more we can do to raise the profile
of a range of STEM occupations.
There is a range of measures in place to encourage
uptake of STEM subjects:
- STEMNET ensures all young people
understand the importance of Science, Technology, Engineering
and Mathematics. This includes the Ambassador Programme, a unique
network of over 28,000 volunteers in science and engineering careers
who work with schools across the UK to raise awareness of the
range of STEM careers and provide scientific activities
- National Science and Engineering Week includes
thousands of events and activities to show how science and engineering
relate to everyday life, including the Big Bang Fair. The Fair
celebrates young people's achievements in science and engineering
and ensures talent is nurtured for the future. In 2011 there were
over 29,000 participants increasing from 20,000 in 2010. Registrations
for the 2012 Fair currently stand at 46,000.
At Higher Education level, The higher Education Funding
Council For England (HEFCE) runs a £350 million support programme
for Strategic and Vulnerable Subjects. This includes the National
HE STEM Programme which runs from August 2009 to July 2012 which
has three core strands of activity:
- Activities to widen participation
within and across the STEM disciplines at HE level working with
schools
- HE curriculum developments focusing on course
delivery and design, student support and knowledge and skills
- Activities to encourage those currently within
the workforce and society without a level 4 qualification to engage
in further study to develop enhanced knowledge and skills.
The Government's Autumn Statement contained several
measures to improve STEM provision:
- An investment of £10m
over five years from 2013-14 in Project Enthuse, matched by investment
from the Wellcome Trust, to improve the quality of science teaching
in schools
- Offering undergraduates access to mentoring support
drawn from the existing network of STEM Ambassadors to give undergraduates
insight into STEM occupations and provide role models at a time
when many will make their career choices
- Sector Skills Councils with support from the
CBI will lead an industry group to 'kitemark' the courses they
value. This will allow employers to tell young people, or those
investing in young people's skills development, which courses
they feel best prepare students for employment in particular sectors
or occupations.
Vocational support for STEM skills and STEM careers
is also essential. Skills for Sustainable Growth published in
November 2010 set out a vision for radical reform of the Further
Education and Skills system to deliver skills for sustainable
growth. Apprenticeships are at the centre of the workplace training
offer, with their effectiveness in delivering job-related, transferable
skills. This type of training is likely to be relevant in providing
STEM skills for a future marine industry.
Work is ongoing to develop better routes into and
through the Apprenticeships programme. This includes:
- Enabling those with very low
or no qualifications to gain the skills they need to take up a
place
- Developing a navigable progression route into
and through the Apprenticeships programme which clearly leads
to higher learning
- Encouraging further education colleges and providers
to work closely with Higher Education institutions and employers.
- A new duty on schools to secure access to independent,
impartial careers guidance for pupils aged 13 to 16 which must
include information on all post-16 options, including Apprenticeships.
99. We recommend that DECC establishes a new working
group under the Marine Energy Programme to consider public engagement.
Its remit should include identifying best practice and suggesting
methods for effective public engagement ahead of any new marine
energy projects. It could also collate a list of common concerns
expressed by members of the public so that they can be addressed
up front in the development of any new project. Public understanding
and acceptance of new technologies is important in its own right,
but it may also contribute to a smoother, more consensual and
therefore quicker planning and consenting process.
Under the regulatory mechanisms which currently exist
the public are engaged at the strategic level at a number of stages
throughout the SEA process, and at the project level (if the array
qualifies as nationally significant), through the Infrastructure
Planning Commission process, and are now being further engaged
through Statements of Public Participation as part of the marine
planning process. It may be that better use can be made of existing
mechanisms of public engagement both at the strategic and project
level by a range of different formal and informal methods.
The wave and tidal sector has already begun to interact
with the public to both address and affect their view of the industry.
The recent Crown Estate leasing rounds have included stakeholder
and public engagement activities. At the Committee Evidence Session
in December 2011 The Crown Estate noted that they saw this as
an area where they planned to do more work when launching future
leasing rounds. Work is being done by technology and project developers
in the context of their individual deployment projects and further
work has been done in the context of the creation of Marine Energy
Parks and the UK's marine energy testing centres at EMEC in Orkney
and Wave Hub in Cornwall. However, as of yet, a best practice
approach to public engagement has yet to emerge.
The need to manage public engagement effectively
will increase as the sector moves towards a commercial deployment
phase. The deployment of increasingly large arrays of devices
in the marine environment is likely to raise both positive and
negative opinion in the communities around which they are deployed.
There is likely to be support for deployments because of the economic
opportunities which they will bring but equally some might be
concerned that (despite this being an integral part of the approvals
process) sufficient measures have not been put in place to ensure
protection of the environment. Others may have concerns about
the disruption of other traditional marine activities, for example,
fishing, transport, leisure and tourism etc.
Public engagement, therefore, will become an increasingly
important stakeholder management issue for the sector. There will
remain a need for action at a range of levels (including local
consultation by project developers). However, there is scope for
DECC to work with the sector on this. The Department intends to
include this within the ongoing work programme of the Marine Energy
Programme Board although we do not see the need to prioritise
the creation of a specific public engagement working group at
the present time. However, we will continue discussions with the
trade associations, technology and project developers, testing
centres and other sector stakeholders on how best to take this
forward and move towards the development of a sector best practice.
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