To be published as HC 879-iii




Energy and Climate Change Committee

A Severn Barrage?

Thursday 28 February 2013

Ed Mitchell, Dr Richard Cresswell MBE and Mike Evans

Alan Seatter

Rt Hon Gregory Barker MP, Trevor Raggatt and Barbara Garnier Schofield

Evidence heard in Public Questions 279 - 386



This is a corrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others.


The transcript is an approved formal record of these proceedings. It will be printed in due course.

Oral Evidence

Taken before the Energy and Climate Change Committee

on Thursday 28 February 2013

Members present:

Mr Tim Yeo (Chair)

Barry Gardiner

Ian Lavery

Dr Phillip Lee

John Robertson


Examination of Witnesses

Witnesses: Ed Mitchell, Director of Environment and Business, Environment Agency, Dr Richard Cresswell MBE, Director South West, Environment Agency, and Mike Evans, Strategic Environmental Planning Manager, Environment Agency, gave evidence.

Q279 Chair: Good morning. Thank you very much for coming in. Welcome to this, our last oral evidence session on this particular subject. For the benefit of the broadcasters, I am supposed to ask you to identify yourselves first even though we know perfectly well who you are. Dr Cresswell, perhaps we could start with you. Just say your name and position, and we will work our way across, please.

Dr Cresswell: I am Richard Cresswell. I am the Director for the Environment Agency in the south west of England.

Ed Mitchell: I am Ed Mitchell. I am the Director of Environment and Business for the Environment Agency.

Mike Evans: I am Mike Evans. I work as Strategic Environmental Planning Manager in the Environment Agency in Wales.

Q280 Chair: Thank you very much. As you know, there is a great deal of interest in this inquiry, and we have taken quite a lot of oral and written evidence already. Obviously, we have seen your written evidence. There seems to be a significant difference between your views and those of Hafren Power. What can you tell us about what you think is the potential flood risk and environmental impact of their scheme?

Ed Mitchell: Thank you very much. I will start on that, and I will ask Richard to come in on it as well, if I may. We have a strategy going forward about 100 years for the Severn Estuary and flood risk, which shows that we would expect to spend something like £1 billion over that period to maintain and improve the defences. That is based on current assessments of what the optimum level of defence is, in terms of cost-benefit analysis and so on. A barrage across the Severn has potentially both positive and negative implications for flood defence. For instance, it may provide additional defence against storm surge but may provide difficulties in terms of land drainage upstream of the barrage. Therefore, that could increase fluvial flood risks because, if the tide does not go down as far, it is more difficult to get the water off the land. In broad terms, we think it is probably cost-neutral in terms of the flood defences. Richard will be able to give more detail.

Dr Cresswell: Chairman, the only additional thing I would add is on the downstream effects. From Professor Falconer’s work we know that he is suggesting that there may be a 20 centimetre rise around the Swansea area. There would obviously need to be more defences, but we would need far more detailed modelling from Hafren to be able to say exactly the effect. Of course our studies on the previous model saw far-field effects as far as southern Ireland and around Wales. That will probably need refining anyway, but we would need to see the detailed modelling.

Q281 Chair: There is quite a big difference. They are claiming between £2 billion and £8 billion of savings. You are saying roughly neutral. Why is there such a huge disparity?

Ed Mitchell: The main thing is that probably one is a comparison of the cost of damage if defences were not there, and the other is the cost of ongoing maintenance of existing defences. We have spent quite a bit of money in that area in the last few years. That area of the coast is pretty well protected, so our £1 billion over 100 years is based on maintaining those defences. You get a much bigger figure if you assume that those defences are just left to decay and the damage that then ensues. As I say, we also protect to this optimum level based on Government guidelines between costs and benefits. It is possible that a barrage would give additional benefit over and above that, but it isn’t money that we would have spent because, for instance, it would be against very rare tidal surges or something like that.

Q282 Chair: In relation to your first answer, are you saying that above the barrage there might need to be extra expenditure to address the higher risks that would come?

Ed Mitchell: Yes. As Richard said, the details are relatively sketchy and the devil is always in the detail. You can imagine that, if the tidal range is reduced, a lot of the discharge from the land, a lot of getting the water off the land, happens at the lower part of the tide. If you restrict that lower level, then you might have to physically pump. For instance, instead of gravity drainage you might have to install pumps. That is one possible additional cost that might ensue.

Q283 Chair: In practice, are these figures pretty speculative anyway? Where would they come from? I think they are trying to agree with Defra some common ground, but are they really guesstimates more than estimates?

Ed Mitchell: If I may, I will ask Richard to comment on our £1 billion figure. Obviously, a 100-year horizon, there is a degree of estimation and experience in that. Richard, I don’t know if you are able to add more.

Dr Cresswell: Our figures of £1 billion are built on our best estimates of condition of assets now and predicted sea level rise. £600 million of that is maintenance of existing flood defences, which at present are in relatively good condition for places like Newport, Cardiff, Weston-super-Mare and Burnham. Just to try to help comparison, we have added in an amount of about £200 million for a barrier that we would put in, in 20 to 30 years’ time, to protect Bridgwater, and, also speculatively, another £200 million additional to our costs, bringing it up to £1 billion for a barrier for the Bristol Avon. That is very speculative. We have only just started talking to Bristol City regarding that. Our billion is as accurate as we can get it. We have not had enough detail from Hafren Power to know where they have their costs from.

Q284 Ian Lavery: Professor Falconer from the University of Cardiff has stated that the high water would be reduced by approximately 2 metres under the Hafren power scheme project, resulting in reduced fluvial flooding. He also states that the mean sea level would remain unchanged, avoiding the drainage problems associated with tide lowering. Are you familiar with the Cardiff University research and, if you are, do you accept these conclusions?

Ed Mitchell: We have had some conversations with Professor Falconer. Indeed, he has agreed to send us more detail on it, so our familiarity with him is partial at the minute. The proposed barrage from Hafren doesn’t collect the water on the high tide, restrain it and then let it through; it allows the water in both directions on both tides, so I think the professor’s assertion that the mean sea level is likely to be largely unaffected seems reasonable. I think what he said is, as you say, that you lose the top 2 metres of the tidal range and the bottom 3 metres. Both sound very plausible. We have not seen the full detail yet.

Dr Cresswell: If I may, I suppose our major concern is at the lower end of the tidal range, where he is saying that at present it is from nought to 14 metres and in future, on his predictions-and we haven’t seen the detail of his modelling, but if we accepted that-it would be from 3 to 12 metres. It is the 3 metres at the lower end with which we have the greatest concern because of the freeboard for getting water out of rivers. Certainly, around the Severn Estuary one of the biggest problems is land drainage.

Q285 Ian Lavery: Professor Falconer’s research also states-and that is to quote him-that there will not be any significant far-field effects associated with the proposed barrage. How does this compare with your own assessment and your own research?

Ed Mitchell: The previous assessment was done by the Government, not by the Environment Agency, and, as Richard said earlier, it did show some slightly surprising far-field effects around, for instance, southern Ireland. As I understand it, the professor believes that that was a factor of the way that the models operated. We have not seen the detail of Professor Falconer’s modelling, so it is a little bit hard to comment, to be honest.

Q286 Ian Lavery: You do not have any comparative evidence, really?

Ed Mitchell: To be honest, the most robust evidence that we have relates to the earlier Government study, which did show those bigger far-field effects, but we hope to get underneath the detail of the professor’s study and be able to take a judgment about whether his modelling looks more accurate.

Q287 Ian Lavery: How might existing flood defences be impacted by the construction of such a barrage?

Ed Mitchell: Perhaps I could ask Richard to comment on that.

Dr Cresswell: I will try not to repeat some of the stuff I have said already. The key bits are land drainage upstream, and certainly in places like the Somerset water levels, we do rely on the river running right down to be able to pump for as long a period as possible. The far-field effects that you have just been asking about are under that area that we would be concerned to fully understand. If you constrain the tide to 3 to 12 instead of nought to 14, then the tidal action is acting on the coastline in a much narrower band and, therefore, we want to look at whether it will erode defences more than it does now. Those are the effects that we would want to understand better.

Q288 Ian Lavery: Could you give a brief outline of your current Severn Estuary flood risk management strategy at this point in time? Briefly, of course.

Ed Mitchell: I would look to Richard again, I am afraid.

Dr Cresswell: We are right in the throes of producing the strategy. We are hoping to publish a strategy for this by the end of this year. It is based on protecting the 75,000 homes and the 25,000 businesses that are at risk to the level in line with the Government criteria over the next 100 years. That is where we get our estimate, in current cost terms, of about £600 million. That is not net present value.

Q289 Ian Lavery: The strategy, will that include the possibility of a barrage scheme?

Dr Cresswell: No, it excludes the barrage scheme because the strategy is still speculative and so that would have to be considered. A major part of our flood defence strategy is, because we have hard defences extensively around the Severn Estuary, we have had to find compensatory habitat or be able to convince Government of the fact that we can find compensatory habitat, so that we comply with the Habitats Directive.

Ed Mitchell: If I may just add to that. Because we are planning over such a long time scale, all of our flood risk strategies are adaptive. Rather than assuming, right now, that we can predict what sea level rise is going to be in 100 years, they allow for levels of sea level rise but we do not need to spend the money until we are certain. The plan is not set in stone now and then lasts for 100 years without alteration. We would clearly get into conversation with the developers of a barrage about how the plan would have to adapt.

Q290 Dr Lee: Good morning, gentlemen. Moving on to potential impact on wildlife, the Environment Agency has a regulatory responsibility to protect migratory and freshwater fish. What are your main concerns about how the barrage would impact on these fish populations?

Ed Mitchell: Thank you. Our two main concerns about barrage proposals across the Severn generally are the flood risk one, which we have covered, and then the second one is compliance with the Habitats Directive, both in terms of the habitat itself, the intertidal habitat, but also migratory fish. Again, the very detailed Government study that predates the Hafren proposal looked at that in some detail. It looked at various different barrage options, none of which is exactly the same as the Hafren one, as far as we can tell, but it appears to show some fairly significant effects on protected fish species.

Q291 Dr Lee: Hafren claim that their VLH turbine is fish friendly. I don’t know how it can be, but they claim it. However, you have stated that you are not familiar with any turbine technology that allows for the safe passage of fish. What lessons can be learned from your experience in tidal turbine technology?

Ed Mitchell: Yes, our comments were made very specifically about tidal turbines. You can have low head Archimedes screw type turbines on rivers, which we believe are fish friendly. We haven’t seen the full detail of these turbines. I have seen in Hafren’s proposals that they are sets of counter-rotating turbines where, for instance, the tip speed is around 9 metres per second, so you have one tip going one way and one tip going the other way at 9 metres per second. It is difficult to envisage how that could be fish friendly. However, a fish friendly tidal turbine would be a great prize for renewable energy for UK industry. It is a case of we have not seen the detail. I do not believe any of these exist, as Hafren currently envisage them. For me, the obvious thing would be to get a trial going to demonstrate whether or not they are fish friendly.

Q292 Dr Lee: My own view on this is if we cannot do this what can we do? Your principal aim is to protect and improve the environment for people and wildlife, but you are also committed to reducing the effects of climate change and promoting sustainable development. In the case of the Severn Estuary, where does the balance lie between guarding against climate change and protecting the natural environment?

Ed Mitchell: That is a very difficult question. We fulfil three roles: we are an environmental regulator; we are an adviser to Government; and we are an operator, in terms of operating flood defences and flood warning systems and the like. Of course, we would offer advice to Government on that balance. I am not trying to avoid the question, but it really is a matter for Government about where that balance is drawn. It is a very complex and difficult balance.

Q293 Dr Lee: In offering that advice you clearly do not have policies in the agency; that is not your reason for existence. I mean, I asked the RSPB and the Angling Trust, "It is okay you are against this. What are you for?" because there is absolutely no way we can hit decarbonisation targets that we are signed up to by 2050 unless we start generating energy in a different way, such as this or nuclear or carbon capture and storage. They are the choices currently on the table. Do you have that in the back of your mind, that if you offer advice that makes the politicians say, "Okay, we are not really going to go down that path" that you recognise that by default you are then saying it has to be one of the other two? Is that in your mind? The Environment Agency’s approach to nuclear, say, there are three nuclear sites in the Severn Estuary. Presumably, if you offer advice that is not negative but certainly is discouraging, you recognise, therefore, that increases the likelihood of more nuclear power stations in the Severn Estuary?

Ed Mitchell: We are very aware that, in its analysis of how you get to the 80% by 2050 target, the Climate Change Committee says that you have to almost completely decarbonise energy generation by the 2030s. So that is a very important factor. As I say, we have these three distinct roles. We would advise Government particularly on the implication of a particular scheme, in terms of the regulation that we and others are asked to enforce. As I say, details are still quite sketchy and I think it is a very difficult balance. It is also important to flag up early that we see the flood risk issues as important, but we also see the habitat and migratory fish issues as probably the more difficult challenge for any proposal to meet the legislative requirements.

Q294 Dr Lee: But you recognise that there is-

Ed Mitchell: Absolutely recognise that there is a balance.

Q295 Chair: Going back to this question about the fish friendly or unfriendly nature of the turbines, I think you said in your answer that it would be very helpful if we could design something that was fish friendly. Do you know of research that is taking place to try to achieve that goal?

Ed Mitchell: If I may, I will bring in Mike in a second. There are two extant barrages, one in France at La Rance and one in Nova Scotia, which potentially offer some opportunity to use that as a research test bed. As I understand it, at the one at La Rance there has been very little analysis of the impact on fish. At the one at the Bay of Fundy, I understand that there are some results showing a high fish mortality. They are both modest in size compared with the Hafren proposal. The problem is that at the minute the evidence is sparse, and I think any serious proposal needs to work on developing that evidence as their ideas develop, but Mike?

Mike Evans: Yes. The challenge in the Severn is quite different to other estuaries or rivers, where we have this issue of the multiple passage of fish across a barrage. For example, the salmon and the other migratory fish may enter the estuary and remain there for three months. You can imagine an adult salmon, which is waiting for the right conditions to enter its natal river to spawn, may go across a barrage four times a day for three months. So the actual impact of turbine on fish has to be extremely low, because over the years just a very small attrition in that population will drive it to extinction. It is a huge quantum shift in turbine technology in terms of safe fish passage that we are looking at. It is not moving it from Fundy’s 50% kill of shad down to a 5% kill. We are looking at kills below 1% and negligible strike or mortality. It is a very, very big challenge indeed.

Q296 Barry Gardiner: I want to pick up on that because it is my understanding-and I am turning now to the IROPI test more particularly-that the proposed compensation package must not be pursued if it cannot be guaranteed or where failure to compensate for residual adverse impacts might drive a feature or a species towards irreversible decline throughout its range. The first thing I want to establish is: is that your understanding of the IROPI test?

Ed Mitchell: We are subject to IROPI tests rather than the determinant of IROPI tests. For instance, some of our coastal flood plans have to go through an IROPI assessment. Frankly, we are not expert in exactly how the test works. My understanding is that, first of all, you have to look at all possible mitigation measures. Where mitigation cannot reduce the risk sufficiently you have to look at providing alternative habitat. That habitat has to be in place prior to the development going ahead. It is a hugely complicated area that is not our particular expertise.

Q297 Barry Gardiner: Mr Mitchell, I agree with all that you have said, but my question is specifically pointed to try to elicit two answers from you. One is the nature of the guarantee that has to be implicit before the compensatory package can be put in place. That is a guarantee that there will be the desired result in terms of the impacts on the species. The other is about the range. I want to know the degree of certainty that one has to have that the compensatory measure is going to be successful before you are allowed to proceed. Because if that is necessary, then presumably one would have to-and I go back to your remarks earlier about putting in place a trial of the turbines to prove that they were fish friendly, and how that guarantee would work unless a trial were carried out, and it goes to Mr Evans’s point-do that over quite an extensive period of time to see the nature of the depletion of the stocks.

Ed Mitchell: I understand the point you are getting at. I am afraid I am not expert in the detail of the test and as an organisation I do not believe we are. Richard, you have taken some coastal zone plans through the IROPI test or are in the process of that. I don’t know if you are able to add anything, otherwise I would suggest that that might be a question better directed at the conservation agencies that deal more directly with the IROPI test.

Dr Cresswell: Two points that I hope are helpful: one is that obviously the way that the turbines work and the degree to which they are fish friendly would not be compensation. That is the mitigation part of it, and we would need that proven. I know you understand that. Our experience with IROPI with our flood risk strategy, we are required to prove that our flood defences are necessary, which we are able to do fairly well, but then to provide the compensatory habitat, we have to be able to prove satisfactorily to Natural England-who are the Government’s advisers-that the habitat that we are providing will be equivalent to the habitat that we are losing, and the methods that we are going to use over the period will provide that habitat, and that there is evidence that we or others have been able to provide intertidal habitat elsewhere.

Q298 Barry Gardiner: Sorry, Mr Evans, did you want to come in there?

Mike Evans: The only thing I could add is, the best evidence we had of the potential damage on the SAC species of fish-the five species we are talking about-is that there would be local population extinctions. Of course the test then is: how would you compensate for that? The Government study spent a great deal of time looking at the various options for compensation and did not conclude anything firm on how you would replace one of those rivers in terms of it being able to support shad, salmon, lamprey and so on.

Q299 Barry Gardiner: My next question follows from that and it is the second point. I want to establish what you consider the range of the species to be. Are we talking about here a biogeographic region, or are we talking about specific to the member state? Because, of course, the nature of our species is that they don’t confine themselves to national boundaries. So what I want to establish from you is: one, what do you consider to be the biogeographic range; and, two, is it your understanding that any compensatory package or measures would have to take place within the member state or across that biogeographic range.

Ed Mitchell: It is a good question. As I understand the way the Habitats Directive works-and colleagues at Natural England are more expert in this than us-is that it is about the integrity of the designated site. There are various designations around the Severn Estuary, but I think they are all within our territorial waters. I don’t know about the point about whether you can provide compensatory habitat outside the site. I think you can and I think that then becomes designated automatically. Mike, are you able to-

Mike Evans: There is some guidance from the European Union on this, which is to provide like-for-like compensation. That will be the challenge, whether you can find the quantum of either intertidal habitat within that region, as you have described it, and I am not an expert on that. Of course the other difficulty then is that with salmon they are loyal to their natal rivers. They do return to the same river to spawn, so there is a particular challenge there. We have poor understanding of shad, which only spawn in four rivers in the United Kingdom at present, three of which would potentially be upstream of the Severn barrage. We don’t quite know what makes a shad prefer those three rivers to similar adjacent rivers, which they do run into but don’t successfully spawn in. The challenges are about our knowledge and how then the application of the law and the guidance works, and, as we said, the law and the guidance is not an area of our particular expertise.

Q300 Barry Gardiner: Just to see how you plug and play into the machinery of potential decision-making here, you would be advising Natural England, who would be advising Government?

Ed Mitchell: I think it slightly depends on the vehicle by which a development comes forward. My understanding is that if a hybrid Bill route is used, then all of these considerations are part of the legal process that generates the Bill. We would be advising Government directly in that process but would not obviously be the decision makers. If it is done through the administrative planning route-and I don’t know exactly what that would look like-but then we would be a statutory consultee to whatever the planning authority was in this particular instance.

Q301 Barry Gardiner: If you are a statutory consultee, though, is it not incumbent upon you to have clarity on all of these legal issues? Because unless you have absolute clarity on what constitutes the biogeographic region or where the compensation has to happen or what sort of guarantees have to be in place before you are allowed to put in a mitigation or compensation package, then you are not going to be able to fulfil that role as an adviser in that statutory consultation effectively.

Ed Mitchell: Our role would be to advise on the likely impact of the development on the protected species that we are responsible for looking after. I think the conservation authorities would provide the advice to Government on what the implications of those impacts were in terms of the legal tests. We can only provide advice based on knowledge, so if research does not exist it does not exist.

Q302 Barry Gardiner: Of course, I understand that. Let me not pursue that further. Look, the barrage is likely to require significant land change, both within and outside of the estuary. Can you tell us about your experience of delivering such land change projects, such as with managed coastal realignment?

Ed Mitchell: If I may, I will pass to Richard as we have a couple of good examples down in the south west.

Dr Cresswell: As part of the Severn Estuary flood risk strategy, we have had to try to find areas for the managed realignment. We have had one very successful one that we are now building at Steart Point, which is on the edge of the Parrett Estuary, where we are creating 400 hectares of intertidal habitat. That has probably taken us eight years in the negotiations and getting local communities happy with the proposals. I am sure we could do it quicker than that having learnt some of the lessons. Indeed, around the estuary, we are now talking to communities about what changes will happen over the next few decades and what opportunities there are for working with landowners to find some habitat. The amount of land that we need would be small compared with possibly the compensation that would be needed for a habitat with regard to a barrage.

Q303 Barry Gardiner: Indeed. You stated in your evidence that the IROPI tests can in themselves prove a significant stumbling block. Perhaps the time scale that you have averted to, for a much smaller compensatory scheme when scaled up for the Hafren barrage, might prove an enormous stumbling block, certainly to an investor I would have thought, if we are talking eight years and over.

Dr Cresswell: I think some of that will be for Government. The way that the Environment Agency has tackled this is through wanting to work with landowners, not to impose things but to do it with their agreement. There are other methods of doing that, but that is not the way that we have done it.

Ed Mitchell: If I may add to that, the examples we have are about recreating intertidal habitat, which I think is an easier prospect than recreating fish habitat. You can get a piece of land, realign the flood defences, open it up and create intertidal habitat. We know how to do that. We have done that in many parts of the country. As Mike has explained, recreating a fish habitat for migratory fish, particularly in a different place, is a different issue.

Q304 Barry Gardiner: How would a barrage developer be affected by the requirements of the Water Framework Directive?

Ed Mitchell: Within the Water Framework Directive, there is a particular test-I think it is called the Article 4.7 test-which allows for development that will have a negative impact on the quality of the Water Framework Directive status if it is in wider socioeconomic interest. That process has been used several times within Europe. It is perhaps more of a well understood and well trodden path than the IROPI test under the Habitats Directive. The requirements of the Water Framework Directive would either be embedded in the legislation that was necessary for a scheme or in the planning permissions. We would advise on those. There are some significant challenges in that, but, compared with the challenges of the Habitats Directive, I think they are of slightly less order.

Q305 Barry Gardiner: Could you describe the work you are currently undertaking to improve the Severn Basin and how that might be affected by the proposed barrage?

Ed Mitchell: We are doing a great deal of work around the country to meet the requirements of the Water Framework Directive, which, as I am sure you know, operates in six-year cycles. We are about halfway through the first of three six-year cycles envisaged under the Water Framework Directive. We are spending a lot of time, money and effort with many partners in terms of improving the water quality, the biological diversity of rivers in the west country and in the Severn Basin. Without further detail on the barrage itself, it is quite difficult to be certain about what the implications are for the Water Framework Directive status. Fish population is an important component of how you assess a river body for good ecological status, so, clearly, if you impact the fish population you impact on the Water Framework Directive status.

Barry Gardiner: Thanks very much.

Chair: Thank you very much for coming in. That has been much appreciated.

Examination of Witness

Witness: Alan Seatter, Deputy Director-General, DG Environment, European Commission, gave evidence.

Q306 Chair: Good morning. Thank you very much for coming in. You have obviously heard some of the previous evidence. I will begin by asking you: Hafren Power have said that the barrage project requires an environmental impact assessment. We understand that an appropriate assessment would also have been necessary under the Habitats Directive. Could you set out what initial assessments are needed for projects of this sort under the Habitats Directive?

Alan Seatter: Chairman, under the Habitats Directive, you would be required to do an assessment of a project that would have a significant impact on a Natura 2000 site. The Environmental Impact Assessment Directive requires environmental impact assessments to be done in certain specific cases. We have recently put a proposal to member states to have a one-stop-shop where we unify those requirements, but that is not yet in place. For a project that would have a significant impact on a site, on a Natura 2000 site, one would be required to do an appropriate assessment under the Habitats Directive.

Q307 Chair: What kind of data is involved in an appropriate assessment?

Alan Seatter: It is almost impossible to give a general answer to that because every site is unique and has its own characteristics. It would depend on what the objectives are; what are the conservation objectives for the site that were set when that site was designated? One would reasonably expect that in designating a site there is a base line. What would be really important would be for a base line of data in relation to the objectives for conserving that site, so the habitats and the species that are important in that area. That data is then monitored over time, and that process would then inform public authorities as to what kind of impacts might happen and what you would need to do to address those.

Q308 Chair: Once that assessment had been carried out, how would that affect the development of a potential project?

Alan Seatter: First, it would determine what would be the likely impact of the development on the conservation objectives of the site, in particular the species and the habitats that are concerned. The question would be: is the integrity of that site significantly affected by the proposed development? You would look at all the alternatives that would be available to that particular project, including a zero option. So, what works well is a good assessment of the zero option, the project in question, and the alternatives to determine what kind of measures would be needed to mitigate the impact of the project on the species and habitats in question, and then what changes to the design of the project would be needed to mitigate those effects. That would be the first step. If it becomes clear that there is no alternative and that there is a major impact on the integrity of the site, then you would need to go into considerations of: is there an overriding public interest to proceed with the project?

Q309 Chair: Hafren Power told us that they intended to meet the commissioner for the Habitats Directive during February. Do you happen to know if that meeting has taken place?

Alan Seatter: They have not asked for a meeting and there has been no meeting with the developer. We have had a meeting with our colleagues from the Department of Energy and Climate Change in February 2011.

Q310 Chair: Would it be normal for developers of projects of this kind to try to have discussions with the Commission?

Alan Seatter: At this point in time, I don’t think we are the right address yet for the developer. We are always happy to meet anybody that would like to discuss what approach should be taken to projects that are big projects in Natura 2000 sites, but the main address I would say would be the local authorities and agencies involved, the local community, local people, and the Government. That is the first port of call. We are happy to provide any assistance that we can to developers, or primarily to the Government if it decides that this is the sort of thing it would like to go ahead with.

Q311 Chair: The company have said they hope to begin construction of the barrage in 2015. Obviously, by that time they would have had to have completed all the relevant assessments. In your experience, does that sound like a realistic timetable?

Alan Seatter: Again, it is almost impossible to give you an answer to that question because every project is unique. I understand that this particular project is likely to be completely unprecedented. I don’t know that anybody has ever dealt with a project of this scale as we understand it. That very much depends on national planning procedures and not on anything to do with the Habitats Directive. Our experience is that the earlier the local community is engaged, the more data there is-the base line data and monitoring data in relation to the species and habitats there is. The clearer the management plan for the site in question is, the earlier the assessment of alternatives is. These things tend to go quicker.

Q312 Barry Gardiner: Could you briefly outline for us the purpose of the Habitats and Birds Directive and its implications for large-scale infrastructure projects?

Alan Seatter: The Habitats Directive has a clear environmental outcome in mind, and that is to achieve good conservation status for every site that is listed in the Natura 2000 network. That objective is far from being met in many cases, particularly in the Atlantic region. The first objective is-

Q313 Barry Gardiner: Sorry, I want you to continue, but I want to elucidate the point I think that you are making. That is that, therefore, it is not sufficient if a site is in poor condition simply to leave it in poor condition because the purpose of the directive is to enhance the ecological condition of that site. Is that correct?

Alan Seatter: Yes. Member states are required to put in place measures for each site that maintain and, where possible, restore the conservation status of the site. The objective of the directive is the one related to biodiversity and ecosystems. That is to achieve favourable conservation status. It is also to put in place a network of sites that meet the needs of people and nature. There is a sustainable development concept, where one would take into account environmental objectives, economic objectives and social objectives, based on a good scientific underpinning-which is why I stress the issue of base line data and monitoring of that data-and also of public involvement in the process. Those are a quick summary of the kinds of objectives that one is trying to achieve. It is an outcome-based directive and we are all working together to achieve that outcome across the network.

Q314 Barry Gardiner: You will have heard the questions that I put to the earlier panel, specifically relating to the nature of the site and the proposed mitigation compensation package and the guarantees that were required in order to commence the derogation process. Could you respond to those questions? I do not want to waste the time of the Committee by restating it because I know you were sitting immediately behind.

Alan Seatter: There might be a misunderstanding of precisely at what point there is any involvement of the Commission and what role we have in that, because this is a directive that is implemented by member states in the way that they feel best meets their own requirements and the requirements of the directive. Since 2007, there have been 15 notifications by the United Kingdom of compensatory measures under Article 6.4 of the directive, so it is not something with which the Government is unfamiliar.

In answer to one of the previous questions, I took you to the stage where it became clear that, in the light of an assessment of alternatives, a project could only go ahead if there was an overriding consideration of public interest. Where that consideration is met-and I can go into some detail of that if you want later-then in order to address the specific damage that the project would do to the conservation objectives of that site, and the habitats and species concerned, there would need to be a package of compensation measures put in place.

Again, I can explain the like-for-like issue a little bit more if you want, but the compensation measures can be taken by the Government, or whichever authority is taking the final decision, and the Commission is informed. There is no need to seek an opinion if there is no species or habitat in the area that is of priority status, meaning of global importance. As far as we know from the data that has been provided for this area, there is no priority of species or habitat concerned. One is assuming that all of the steps that I have just described have been gone through, and then, if the project were to go ahead, the Government would simply inform the Commission of the compensatory measures, why those had been taken and what the scientific underpinning of them would be.

Q315 Barry Gardiner: Thank you. That is clear. Can I ask you to address the issue of the biogeographic region of the site-whether a species must be restored across its biogeographic range, or whether it need be restored only within the member state?

Alan Seatter: If you take the case of migrating birds, for example, the criteria is over the natural range of migration of that species, and it could be outside the biogeographic region, outside Europe, in other parts of the world in many cases. The guidance that we have worked out with member states, NGOs and others, is site specific because that is the most useful thing and the most commonsense thing we can say in general terms about what you do to repair damage. If a project damages a habitat and species in that particular region, the first step is to try to find measures that repair that and address that in the region concerned. That is what happens in pretty well all cases. If somebody was to say, "But it is impossible to do that," then clearly we are not asking for the impossible. It would depend on what would be the measures that addressed a specific problem. If there is a specific habitat that is destroyed or damaged or a specific species that is destroyed or damaged, what would be the alternative if it was not located in this particular area? First of all, we would look to something very close by. Then one looks at the biogeographical region within the member state. We have not had cases that have gone anywhere beyond that, so it is difficult to say anything sensible in relation to an unprecedented situation.

Q316 Barry Gardiner: Indeed. Can I try to draw you out on one point here in relation to this? That is that if there was an adverse impact, which drove a species to decline throughout its range because of a failure to compensate within the site, then am I right in thinking that-I hate to use a double negative here-that then would block the derogation process getting under way?

Alan Seatter: It is difficult to answer hypothetical questions.

Q317 Barry Gardiner: As you said, we are in uncharted territory here, so they are all hypothetical questions.

Alan Seatter: The guidance is only useful if they are for the usual kind of case. This is speculating.

Q318 Barry Gardiner: My understanding is that the proposed package cannot proceed where there is a failure to compensate for adverse impacts that might drive a feature towards irreversible decline throughout its range. That is what I want to get clarity on.

Alan Seatter: Yes. If there is that kind of impact, then you would initially fail the test. I am not saying that is the end of the story; I am saying that it would need to lead to another discussion.

Q319 Barry Gardiner: Thank you. That is what I wanted to establish. Can you provide some examples of European precedents where derogation has applied?

Alan Seatter: Since 2007, we have had 34 cases where some form of derogation has been applied by member states and the Commission has been informed, and a further 19 where we have had to give an opinion because it has affected a priority species-that is for the EU as a whole-of which, as I said earlier, in the UK there have been 15 notifications. We have published each of those cases and they are all unique. They are all cases where-I think I am right in saying, in the case with your earlier witness-the question of the timing of the measures came up. In the case of the Elbe Estuary in Germany, we have accepted compensatory measures that were not put in place before the dredging project that was in question. In spite of our guidance, we have accepted in that particular case that it made no sense to try to do that, so we have extended the period over which the compensatory measures could be put in place. That is one example of a derogation to the timing rule.

Q320 Barry Gardiner: Thank you. Many stakeholders have expressed a concern about the lack of transparency and information relating to the barrage. Could you comment on whether the Aarhus Convention offers any remedies for public access to information?

Alan Seatter: The Aarhus Convention-to which the UK is a signatory, and the European Union is also a party to that convention-requires the public to be informed and involved in decisions affecting the environment. That requirement has been put into the European Environmental Impact Assessment Directives and is something that the Court of Justice is particularly attached to. It is a requirement to keep the public informed and involved, and to allow them to participate in the process before the decisions are taken. That is something to which all member states have signed up to and to which the EU is also a party. There are some cases that have been presented by several NGOs. The World Wildlife Fund for Nature has highlighted a place in Germany where experience is that public involvement and public information in that particular area, where there are 1,000 planning applications a year that affect that site, go very much quicker the earlier the public is involved and the more that it is participating in the process. There are legal requirements to it and there is also a practical consideration, which means that things go much smoother if that happens.

Q321 Barry Gardiner: Thank you very much. Final question: my understanding of the whole process of derogation under the directive is that there is a precondition, and the precondition is if there is no suitable alternative solution. What we are talking about here is power generation. This is what the barrage is designed to do, to generate power. I would have thought that manifestly there are innumerable alternative suitable solutions, in that one could look at an offshore array; one could look at onshore wind; one could look at any number of low carbon energy generation technologies. How could the barrage claim that there were no suitable alternative solutions?

Alan Seatter: I might irritate you by not being able to go into the details of this project-

Barry Gardiner: I am sure you will not irritate me, Mr Seatter.

Alan Seatter: because we are not involved in this project at the moment, so I don’t want to say anything about whether there are or are not.

Q322 Barry Gardiner: Let us take this barrage out of it. How could any low-carbon energy project state that there were no alternative suitable solutions, given that manifestly one can create low-carbon energy in many, many different places and in many, many different ways?

Alan Seatter: I think the first alternative is the zero option. Everything should be assessed against the option of not actually going ahead with the project at all and what that would mean, in terms of climate change objectives as well as economic and social impacts and environmental impacts on the region itself. It would be difficult to conceive of a project, and it is not our experience, in terms of the derogations that have been given by member states for this type of project, that there is never an alternative. Having said that, if this was an unprecedented project it is difficult to say anything more about it, but it would be difficult to conceive of absolutely no alternatives at all, whether they are of local scale or whether they take longer time to put in place.

Q323 Barry Gardiner: In fairness, I think it says if there are no suitable alternative solutions. It is not a question of could there be no feasible alternative; it is no suitable alternative solutions. I would have thought an offshore array instead of a barrage one was as suitable as another.

Alan Seatter: The Court of Justice has expressed an opinion about this topic in the case of the Castro Verde motorways in Portugal, where the Government was found not to have considered sufficiently the alternatives to a project. This is clearly a topic that is of particular importance in a very large-scale project with an impact on a Natura 2000 site.

Q324 Ian Lavery: Touching on what Barry was saying, I wonder if you could give any examples of precedents where alternative feasible solutions have been accepted or perhaps rejected and the reasons behind such decisions.

Alan Seatter: I think there are many examples. There are thousands and thousands of these decisions that are taken each year-not involving us, I mean involving local authorities and member states-so they are judging this all the time. What is clear to us is that the very small proportion of these that ever get to looking at the derogations have all looked at alternatives. In some cases, they have altered the project because they have taken what is called mitigating measures, so the project has been designed differently in order to cope with the problem. That process is a normal part of everything that is done under this directive. It is difficult to find an example where there isn’t a discussion involving project design that then changes during the course of a process, so it is part of the normal process.

Q325 John Robertson: For the record, could you please outline the meaning and application of "imperative reasons of overriding public interest" under EU Law?

Alan Seatter: In our guidance document, we have given quite a few examples of what has been used by member states in the past. There are examples of projects that have taken place in areas of very high unemployment, where there is significant poverty in the region and where the project is designed to address that kind of social objective. There are examples where projects have met considerations relating to the fight against climate change, the reduction of traffic congestion, competitiveness of a particular port, technological advances and competitiveness of an industry. There are many cases where those sorts of considerations have come into play and have been accepted by member states when they have had to take decisions on these projects. As I said, the Natura 2000 network is meant to be one for sustainable development, so that has an environmental objective, an economic one and a social one. Each of these has been used in the past to look at what is overriding public interest.

Q326 John Robertson: Would either of them be given precedence over another? When these things happen, there is usually a positive in some aspects of what you said but also negatives as well.

Alan Seatter: That is part of the assessment that would be required for the site to look at what its impact is. In relation to the Natura 2000 site, the main question is: what is the impact on the habitats and the species of that particular site and does it affect the integrity of the site? We are always coming back to the objectives for that site in question. How far are they disturbed by this kind of project? Even if you decided to go ahead with a project, because it has overriding public interest concern, you would then need to address the question of can you or can you not provide compensation to address the damage that is done to the species or the habitat?

Q327 John Robertson: Whereabouts would climate change come in this? If there was, say, a project that had 16.5 terawatt hours worth of power coming out, and shall we say it would be there to combat climate change, would that be given high precedence over habitat or would habitat come first?

Alan Seatter: These are decisions that have to be taken by elected people who are responsible for taking that kind of decision. As public servants, what we need to do is to provide the facts and the scientific basis for elected people to take that decision. You cannot say in one case it is more important than another, but clearly the fight against climate change in a major project is a question of great public interest.

Q328 John Robertson: Would it be fair to say there is no legislation in place that would clarify that exactly? Again, it would be down to somebody just to say "Yes" or "No"?

Alan Seatter: Yes, that is correct. There is no ultimate clarification of that. This is the decision that belongs to the level where it is closest to the project. Whoever is taking this decision would need to have that information available, but they would need to take the decision as to what balanced out what. We have given guidance on questions related to renewable energy projects in Natura sites before, such as wind farms, and we have given quite a lot of examples of the ways those have been dealt with. This is a project of a slightly different nature.

Q329 John Robertson: Are there precedents then in the provision of compensation for habitat on the scale of, say, the Severn barrage?

Alan Seatter: Because we don’t know the details of this project, we don’t know how big that would be. From looking at various pieces of information in the public domain, what I have gathered-I think I would be right in saying-is that on the scale there appears to be for this project there has never been another case like that that I can think of.

Q330 John Robertson: Obviously, you can’t give me examples, but could we say that in the habitat of, shall we say, equal value, it is accepted under EU law or must compensation be on a like-for-like basis?

Alan Seatter: What we have said in our guidance, which is meant to be useful to people that are taking these decisions so it cannot address an unprecedented thing by definition. It has to address what is the commonsense way of dealing with this. Like for like is a commonsense way of saying something is of equal value. It is just sensible that if a project is damaging a particular species or a particular habitat, that is the problem that you should address. So you should find a way to compensate the loss of that particular habitat and as close as possible to the project. That is the principle on which we would operate.

Q331 John Robertson: Should this compensatory habitat be in place before the project begins, during or at the end?

Alan Seatter: The guidance we have given is that it should be in place before the project is completed. There is a case where we were asked for our opinion by Germany for the Elbe Hamburg Estuary, where it was clear that there was no alternative but to give compensation after the project.

Q332 John Robertson: DECC concluded in 2010 that under a barrage scheme the hypertidal nature of the estuary would not be recreated to a like effect through compensation measures. In your view, then, would you consider that the loss of this ecological feature breaches the terms of the Habitats Directive?

Alan Seatter: No, formally it doesn’t breach the terms of the directive. The directive does not define the detail of what is the right kind of compensation. It is not the Commission’s job to second guess member states as to what is the right kind of compensation. Member states would be responsible for taking that decision, and we would look at: do they have the scientific underpinning; is the base line data there; is the monitoring there; has there been a consideration of alternatives; has there been public involvement in the process? If the Government then said it is absolutely impossible to provide compensation on a like-for-like basis within that region, then that is something that we would have to look at with them. Again, we are talking about a hypothesis here.

Chair: Barry.

Barry Gardiner: Sorry, Chairman, locked in thought.

Chair: Just briefly.

Q333 Barry Gardiner: I was trying to pick up on something that you said about equal value and like for like. In terms of ecological equivalence, my understanding is that the current EC guidance, EC2007A, requires delivery of compensation within the member state. But ecological equivalence-and this was the point I began to pursue earlier with the previous witnesses, which I think you may have heard-will be over the biogeographical range of the species. Therefore, I wonder if you want to comment, because I think these terms are thrown around quite indiscriminately, "like for like" and "of equivalent value" and "ecological equivalence", and they may not mean the same thing. I wonder if you would like to tease out that distinction about the ecological equivalence across the range of the species.

Alan Seatter: In terms of the objective of the Natura 2000 Directive, what is important is the coherence of the network. Whatever is done on a particular site, and the compensation that then results, has to respect the coherence of the Natura 2000 network. That is a principle that is in the directive. I know what "like for like" means but I don’t really know what "equal value" means. To me, it is kind of the same. Our guidance on like for like is saying, "It is of equal value if you compensate for that particular habitat and that particular species in the region concerned." Everybody can understand that, which is why it is in the guidance. The question is: what happens if that becomes impossible and then you have to look outside the site? It is possible to do that. You can look outside. Some member states just next to it have designated new sites, designated new habitats and have provided compensation of several times the damage. In the Rotterdam Port case, one of the habitats that was damaged, which was a priority habitat, was compensated for five times in an adjacent-

Q334 Barry Gardiner: A global priority habitat?

Alan Seatter: A global priority habitat was compensated for five times in an adjacent area, and another one with an area that was 10 times bigger. In that case it is a different kind of region. It is more connected than the one that you are talking about here.

Q335 Barry Gardiner: Here what we may be talking about, in terms of these species, is actually the Atlantic biogeographic region. Is that considered to be part of the Natura 2000 network or not?

Alan Seatter: The network is defined. Member states make their proposals for the sites that they want to designate. They are then subject to a peer review by member states who are in the same biogeographic region, to make sure that we have a coherent set of proposals. After that examination, they then go into the directive. So they are already defined with respect to a biogeographic region and that is obviously a relevant consideration. I don’t think we have ever had a case where a project in one member state has required another member state to take compensatory measures. I am not quite sure. That might be an objective one day that will be reached, but it is by no means an easy thing to do.

Q336 Barry Gardiner: We understand that the relevant competent authority in this case is likely to be DECC, and that they will have to make a judgment as to whether the project can qualify for consent in the light of IROPI. What role does the Commission play during this process, if any?

Alan Seatter: The responsibility for the decision lies with the competent authority of the member state in all cases. Where there is no priority species or habitat of global importance, the only role of the Commission would be to be informed of the decision that the competent authority has taken. Obviously, in pretty well all of these kinds of cases, we make ourselves available informally to our colleagues in Government throughout the process. But, formally speaking, the Commission would not have a role other than to be informed of the decision of the competent authority on the compensatory measures. If there were to be a complaint addressed to us, then it is our duty to register that complaint, see whether it is well-founded and then see whether it needs any further discussion with the member state concerned. It could end up in an infringement case or in court.

Q337 Barry Gardiner: Before we get to that-thank you for outlining the process-but I want to ask if there were a complaint, what sort of considerations would inform the Commission’s view on whether the interests served by a particular project outweighed or were outweighed by the environment harm it causes?

Alan Seatter: Our role would not be to second-guess the Government or to propose alternatives or anything like that. Member states have asked the Commission to take on the role of these derogations, in order that they can be sure of equal treatment across the whole of the European Union. It is not our role to come in and say it should-

Q338 Barry Gardiner: Surely, that is a guarantee that they will not be considered equally across the European Union. If you delegate it down to 27 different Governments, then 27 different Governments are probably going to arrive at 27 different conclusions as to whether something is of overriding public interest or not. That is just a way of avoiding the Commission having to take a decision.

Alan Seatter: That is what they have decided, that this directive is implemented nationally. In questions relating to derogation, where they have ask the Commission to look at that, it is precisely in order to be assured that everybody is subject-

Barry Gardiner: There is consistency.

Alan Seatter: That there is consistency.

Q339 Barry Gardiner: Indeed. That is what I am asking you. At that point, what are the considerations that the Commission would then take into account, in judging whether in fact the benefits of a particular project outweighed or were outweighed by the environmental harm that it causes?

Alan Seatter: We would judge whether the Government had carried out their own assessment according to the steps that are set out in the directive: has there been a proper assessment in the first place? Is there baseline data and is it being monitored? Is there a scientific underpinning for the decision? Has there been public involvement and information in the process? Has there been proper consideration of alternatives, including the zero alternative? What were the reasons of overriding public interest that came into play in this particular case? Is the compensation addressing the specific objectives of that site?

Chair: I am sorry; we are running over time now. We have the Minister waiting outside to give evidence, so we will have to leave this. Thank you very much indeed for coming in.

Examination of Witnesses

Witnesses: Gregory Barker MP, Minister of State, DECC, Trevor Raggatt, Head of Small Scale and Emerging Renewables, and Barbara Garnier Schofield, Head - Marine Energy and Tidal Range, gave evidence

Q340 Chair: Good morning, and welcome back; always a pleasure to see you.

Gregory Barker: Thank you, Mr Chairman.

Q341 Chair: A new subject that has attracted a lot of interest, and so this is our last bit of oral evidence. Looking back, your Department’s study in 2010 rejected the Cardiff-Weston barrage scheme. Is it a bit surprising that these proposals have now popped up in August 2012 in 10 Downing Street?

Gregory Barker: I don’t quite follow what you mean, they’ve "popped up in 10 Downing Street".

Chair: The momentum that is behind the Hafren Power proposals seems to have been significantly increased by the meeting that took place with the Prime Minister last year, which follows barely two years after the relevant Department had rejected the whole idea.

Gregory Barker: Yes. You may be relying on perhaps a partial account of that meeting. The PM was very much in listening mode at that meeting. Might I suggest, Mr Yeo, I pre-empt some of your questions by giving a very short introduction to summarise exactly where we are.

Chair: Sure.

Gregory Barker: You will recall I sat here about a year ago talking about the potential of wave and tidal stream energy sources, and obviously, in principle, we are very keen to maximise the opportunity to extract energy from the seas around our coast. Today I am signing a memorandum of understanding between the South West Marine Energy Park and the marine energy park in the waters of the Pentland Firth and Orkney Waters. Wave and tidal power are something that this Government is very keen to pursue, and, clearly, harnessing the power of the Severn Estuary specifically could be a very significant asset for the UK.

However-and it is a big "however"-if it were to be done it would need to be done sustainably, and any plan that would go forward would need to take account of the quite unique ecology of the Severn Estuary. It would have to take account of its existing socio-economic activities, and most importantly, perhaps, in terms of considering this particular proposal, the costs associated with harnessing that power. Because one thing is absolutely clear, before you go down that road much further of considering these other environmental and social impacts, any decision on a Severn power scheme or schemes would need to be based on incredible compelling evidence of the full set of costs and benefits.

In terms of the specific proposal that you wish to discuss today, we have received an outline proposal from Hafren Power-and indeed, its predecessor Corlan Hafren-and there have been some discussions between my Department and the company. However, the information that the Department has seen so far certainly does not allow us to assess if the proposal is credible, or if it could stand a chance of achieving the benefits Hafren Power claims the scheme would achieve.

There are a number of issues that Hafren Power would need to explore in much greater detail, before we could take a view as to whether their proposal warrants further interest from Government. Key among these are how the project would propose to tackle the enormous environmental challenges that a barrage would create; how they would work to mitigate potential negative impacts on the local economy, such as Bristol Port; and also, most importantly, evidence that the project is affordable and represents good value to electricity consumers. Crucially, the project will require substantial revenue support to provide a return on investment. It is vital that Hafren Power provide robust evidence that the level of support sought for the project would compare well with the expected future costs of other alternative low-cost carbon technologies, such as nuclear or offshore wind, that a barrage would likely displace.

In summary, Mr Yeo, to date the Hafren Power proposal does not go far enough at this stage to justify Government endorsement of the project. That said, as is the case for any similar project, should Hafren Power develop the proposal further and, in particular, provide credible robust evidence to substantiate their claims in their outline proposal-which to date has yet to be forthcoming-the Government would, of course, be prepared to look at that closely and consider it more fully.

Q342 Chair: Thank you. That is very helpful indeed. Of course you will know that this Committee is also an enthusiastic supporter of marine renewable energy, from both wave and tidal sources, and we reported on that last year, though we also noted that the costs currently make it unlikely that this is going to be a significant contributor to electricity generation in the UK in the next decade.

Gregory Barker: If I may say, I think the difference between this type of harnessing of energy from the sea and others-such as the very different technologies that are currently being exhibited over the road at the QE II Centre, at the RenewableUK Wave and Tidal Conference-is that there is no great prospect for progressively bringing down the cost of those technologies as they are deployed. It is a one-time investment in a large infrastructure project, effectively, rather than a steady rollout along a declining cost curve, which is effectively what the other technologies are.

Q343 Chair: What you have told us is that you do not have enough information to judge whether this is economically viable, or whether it is environmentally sustainable, and in fact some pretty big questions remain insufficiently answered.

Gregory Barker: Correct.

Q344 Chair: Is it the intention to publish what Hafren Power have told you so far?

Gregory Barker: We have a copy of their business model, but I understand that is commercially confidential. I don’t believe that there is any other information that the company has provided us with that we could put into the public domain. I have to say there is not a great deal of information, so it is not that we are sitting on great piles of data.

Q345 Chair: Given the controversy that this proposal has already generated, it would seem to me possibly in Hafren Power’s interest to be a little more transparent about what they are proposing if they are going to win much public support. There may well be some commercially in-confidence aspects to it. Although I don’t think there is exactly a queue of people producing schemes to build a barrage in the Severn Estuary, who are going to be looking at the figures and stealing the IP. Would it be possible for you to encourage them to-

Gregory Barker: I am not going to reveal it, but this is the executive summary that we have. It is not exactly a warehouse full of data.

Q346 Chair: Perhaps if you have the opportunity to urge Hafren Power to share that with the Committee, they might get a more fulsome response to their proposal. For example, does that give any further detail on the proposed design of the turbines?

Gregory Barker: No, it doesn’t. That is a critical element because, without knowing about the design of the turbine, we can neither come to an informed view about the likely impact on the ecology, fish in particular, nor can we have a view on the cost.

Q347 Chair: Again, it is very helpful to have a clear picture of the level of information that has been made available. They have talked about a hybrid Bill being passed during this Parliament, which now has just over two years at best to run. Is that a realistic timetable?

Gregory Barker: Not at all. In my understanding, you would need to be talking to the Public Bill Committee. We don’t even have the beginnings of the information to take a decision as to whether or not that would be necessary. To talk of there being a Bill before 2015 would require some transformational level of information, in order for us to give up Government legislative time, which would be very squeezed, as well as all the political time and effort that would need to go into pursuing what is a very substantial project alongside-as you know and your Committee knows, Mr Yeo-an extremely packed DECC agenda.

Q348 Chair: We are certainly aware of the packed DECC agenda, absolutely. However, is it conceivable that this might not be dealt with by a hybrid Bill and that you could proceed through an application for a nationally-significant infrastructure project instead?

Gregory Barker: Yes, there is a potential route through the 2008 Planning Act and a consent process is an alternative. However, for a proposal like the Severn barrage to be pursued under the Act, the consenting process would be most likely to work efficiently if a national policy statement on this technology-and possibly also on this specific location-were put in place, and putting in place such a national policy statement in itself would take at least 18 months to two years.

Q349 Dr Lee: In view of the fact that there is a danger here of ridicule of the fact that the executive summary is so short, could you explain why Hafren Power have gone about this in this way at this time and so seemingly laid themselves open to the charge that they are not providing enough information for anybody to make a considered judgment?

Gregory Barker: I don’t want to put words into Hafren Power’s mouth, and I don’t want to belittle the proposition. I think it is just very early days. All ideas and projects start from a standing start. It may be that they will come forward with a further level of detail, but it needs to be a much greater level of detail, and thought through, on a range of issues. I haven’t mentioned financing either.

Chair: We are coming on to that later.

Gregory Barker: So, no, I couldn’t say why that is. If I were to give them any advice at all-and it is not really for me to give them advice-I would say, generically, any company or consortia wishing to come forward with a project for Government of this scale and size, before they engage at a serious level certainly in the public domain, should be doing so with a much greater level of data at their fingertips.

Q350 Ian Lavery: The Chief Executive of Hafren Power, Anthony Pryor, I think said to this Committee that the company would require in-principle support from the Government through a statement of the House before developing the project any further or starting the consultation process. Is it usual for Government to give such in-principle support? I understand what you just said that you have, but I think it is fairly critical to say that as Hafren policy, "This is what we’ve got until now." The decision-making process has been very, very important.

Gregory Barker: I think what Mr Yeo referred to in his opening remarks, the report that was published in 2010 made clear the Government’s position on this. We are not against this in principle, but the evidence that we have seen to date, in terms of cost and environmental impact, are not sufficiently compelling. We have left the door open for that to change, but there is no precedent in recent times for the promotion of an energy project by means of a hybrid Bill, and we would need to see a substantial amount of evidence to back up the current proposal before we could even consider providing a statement of support as they suggest.

Q351 Ian Lavery: What they have provided until now certainly means that, if they could not get support in principle by the Government in the House, then the possibility is that they would withdraw. Do you see that as being the case?

Gregory Barker: I don’t know. That is for them to decide.

Q352 Ian Lavery: Discussions regarding the Hafren Power scheme have so far been behind closed doors, and this has many people concerned about the potential lack of transparency. There are businesses and landowners who fear that there may be adverse impacts on their businesses, in and around the barrage. If a barrage were to go ahead, how would the Government ensure full public consultation and adequate compensation to affected parties?

Gregory Barker: At the moment, it is just such early days. I can assure you that if we were to go forward on a scheme then there would be full due process to cover this, but there are no proposals at the moment for a scheme and at the moment we are part of a pre-consent process.

Barbara Garnier Schofield: I think what the Minister meant to say here is that, as part of either a hybrid Bill or a Planning Act consent process, if we were going to go with a barrage, public consultation and an extensive environmental impact assessment would be needed in the same way as it would be for all other projects that go through the consent process.

Q353 John Robertson: Minister, it is not often I congratulate your Department, but your opening statement has pulled the rug from a lot of our questions.

Gregory Barker: Very good.

John Robertson: I am sure I will find something to have a go at.

Gregory Barker: Have a crack at it.

Q354 John Robertson: It wouldn’t be me if I didn’t. Having said that, I totally accept that bit of paper that you showed us-or papers-strikes me as being embarrassing for a company that is looking to have a project this size in value, and the effect it will have on not just the habitat but the people of the region. To send you a four-page A4 document, I am embarrassed for them and I am embarrassed that they think that it would be considered. I am surprised you have not thrown it out completely.

Anyway, having said that, some of the questions are obviously going to be hypothetical in this case because you don’t have the information, but I would appreciate if you could position it as best you can. The company say that, basically, the cost of energy for the first 30 years is around about £160 per MWh. We understand that most renewables will only receive a 15-year period of price support. Would DECC consider a level of strike price and contract duration acceptable under the CfD mechanism or would you tell them they are going to have to pay 15 years at whatever the price should be?

Gregory Barker: It is not for the Government to say what level of revenue support would make a private sector project economically viable, but we would expect projects to come forward with views on whether they needed support and the level of revenue support that would be required. Our priority nowadays is EMR, as set out in the current Energy Bill going through Parliament. The Energy Bill also includes a power to allow the Secretary of State to direct the counterparty body to issue a contract in specified terms, including the strike price, but the precise mechanism for doing this is currently being developed.

However, at this point we would expect projects to come forward with their views on whether they needed support and the level of revenue support that would be required before DECC could assess the project’s value for money in comparison with other projects of the same or different technologies. That is a roundabout way of saying that we would look for a comparison with either nuclear or offshore wind. We certainly would not be looking to pay more than that on behalf of the consumer.

Q355 John Robertson: You would not be setting a separate price for, say, tidal projects?

Gregory Barker: We may set a separate price, but that price would not be above nuclear or offshore wind.

Q356 John Robertson: It would be, shall we say, set for tidal projects? You would not be able to classify it as something else?

Trevor Raggatt: I think you need to be careful about specifying what you mean by tidal projects. There will be work to be done on a range of different technologies, and of course, there is tidal stream as well, which will have a completely different sort of lifecycle and commercial journey to something like a barrage project. In terms of something like a barrage, whether it is the Hafren Power project or some other one, it is such a large and unique project. I think our initial view is that we would probably look to use the individual route rather than taking a standard price within the EMR suite of prices. Certainly, I think the work that is being done on the Hinkley Point passage at the moment, which again is a single large project being done in advance of having set out the range of strike prices, will inform the way that we would be likely to take a barrage-type project forward, in terms of negotiation of the CfD, in terms of the strike price but also in terms of the length of contract and so forth.

Q357 John Robertson: In these types of projects, which are quite complicated-and obviously, other than the energy that will be created, the effect on habitat and the areas that people are employed and other places further up the estuary in this case-how are you going to ensure you get best value for the customer, at a stage where you don’t know by the end of it exactly what the effect is going to be?

Gregory Barker: It is very difficult to say without having much greater detail on the project. All I can say is that we would robustly and critically analyse the project as it comes forward. We have not had enough data for us to even begin that process yet, and we are certainly not going to tie up a large amount of resource in thinking about this, and how we might do something like this, when it remains entirely hypothetical.

Q358 John Robertson: Flood damage is something that has been in the news for a while. You would take that into consideration.

Gregory Barker: Absolutely. As you say, Mr Robertson, there are a whole range of issues that would need to be thought through very carefully, which would be a shopping list to this Committee.

John Robertson: Minister, in all honesty, you have answered all the questions. I am really upset I can’t find anything to have a go at you on. I will get you next time.

Gregory Barker: I will look forward to next time.

Q359 Chair: Going back, if I may, to the strike price for a moment. I think one of the suggestions has been that this might need a longer period. I think we have been talking about a 15-year period typically for most renewable technologies, but would you consider agreeing a price for a longer period because of the nature of the project?

Gregory Barker: I think we would not rule out the time scale. We would probably need to have a more open mind with that. What we would look at is the absolute cost to the consumer but, given the long-term nature of that sort of asset, it would have a very different lifecycle to, say, an offshore wind farm or something. We would take a different view.

Q360 Chair: I think we understand that, yes. Given the scale of this project, if the strike price has to be somewhere at the upper end, where we are looking at offshore wind or nuclear or whatever, is there a risk that it would then pre-empt such a big chunk of the money available under the Levy Control Framework that it would perhaps prejudice the emergence of other investment projects for different technologies?

Gregory Barker: Theoretically, it could do that. It would very much depend on the price and size, but the Levy Control Framework is something that is set over a number of years. This is a project that is anticipated to run for a number of decades, so you are talking about a project that would draw down the Levy Control Framework-if indeed there still was a Levy Control Framework-in the 2030s.

Q361 Chair: Is there also a difficulty in principle in taking into account savings that may very well be achieved, but savings which would accrue to the taxpayer costs in another Department’s spending but which are effectively financed if it is coming through the strike price from electricity consumers?

Gregory Barker: Sorry, I am not quite sure-

Chair: When we took evidence from the company, they were saying that there could be savings in terms of the cost of flood defences and so on, although these figures are not accepted by the Environment Agency. Putting that on one side for the moment, if there were savings those savings would accrue to the Defra budget, because that is where the money for flood defences comes from. But of course the cost goes on to the electricity consumer because it is coming through the strike price. What I am saying is, is there a conceptual difficulty about taking account of savings when they don’t come back to the people that are spending the money?

Gregory Barker: Yes, that does present very real practical difficulties. I can see there could potentially be wider benefits. But there could also be wider negative impacts as well, ecologically and environmentally speaking.

Q362 Chair: I will pass on in a moment, but just one final point on the costs. For most of the projects that are looking to get support via a strike price and a contract for difference, there will be a number of competing projects. There is more than one offshore wind farm and hopefully more than one nuclear proposal as well, if we are lucky. In this case, there will not be a range of competing projects. It is essentially a one-off.

Gregory Barker: Exactly.

Chair: Does that make it more difficult to work out what is an acceptable strike price?

Gregory Barker: It must do. On one hand it is simpler, but you don’t have the driver of competition in there. In many ways it is more like the Channel Tunnel or another large-scale infrastructure project, rather than a competing renewable energy technology.

Chair: As you just mentioned the Channel Tunnel, I should draw attention to my financial interest as a director and shareholder in Eurotunnel, which, of course, did achieve the construction of the Channel Tunnel without a single penny of taxpayer’s money from either Britain or France.

Gregory Barker: Although I seem to remember the shareholders didn’t fair too well.

Chair: The shareholders and the bondholders were almost wiped out.

Q363 Barry Gardiner: Minister, DECC presumably would be the competent authority for any decision on a barrage at Hafren Power. Yes?

Gregory Barker: Yes. I think we would be the lead Department, but of course, for a project of this scale, size and spread, there would be interest across Government.

Q364 Barry Gardiner: Absolutely, and, certainly, in terms of the competent authority from taking a decision on the Habitats Directive, you would be that competent authority?

Barbara Garnier Schofield: I think Defra probably would be the competent authority for compliance with the Habitats Directives. We would be closely working with them on that.

Q365 Barry Gardiner: That is not what we have been advised. How interesting.

Trevor Raggatt: This isn’t something we have taken detailed legal advice on in the context of this project, because it is at such an early stage.

Q366 Barry Gardiner: Come on. I mean, in 2010, you had the Weston barrage, so presumably you knew what you were doing on that. You were the competent authority on that. Why do you not think you might be the competent authority on this?

Gregory Barker: Because we don’t normally do ecological impacts in DECC. We are the Department for Energy and Climate Change and the Department for the Environment is the one that does have that.

Q367 Barry Gardiner: There would be a lot of people who are statutory consultees on it, and there will be a lot of people who are giving a lot of advice to a lot of people, but ultimately-

Gregory Barker: I can’t think of a single example, Mr Gardiner, where we have taken such a lead role on matters of ecology.

Barry Gardiner: Very interesting.

Gregory Barker: Perhaps you could.

Q368 Barry Gardiner: I was going to proffer the Weston barrage in 2010, where I believe you were the competent authority. But perhaps you can check out with your colleagues in Defra and then write to the Committee to establish precisely who would be the competent authority in this case.

Gregory Barker: Very happy to.

Barry Gardiner: I don’t mind either way, Mr Barker.

Gregory Barker: I am all in favour of mission creep when it is me who is creeping.

Q369 Barry Gardiner: Yes. Let me ask you then, DECC’s estimates for the net regional benefit to the economy of a barrage range from £5.9 billion to negative £1.5 billion GVA. Estimates for the net jobs created post-construction-I emphasise, "post-construction"-vary from plus 700 to minus 2,500. Why is there such a vast range in the figures and doesn’t that huge uncertainty render them rather useless?

Gregory Barker: Yes.

Q370 Barry Gardiner: Thank you. Hafren Power estimate that up to 50,000 indirect and direct jobs would be generated as a result of the barrage. How does that calculation compare to DECC’s assessment of the potential economic benefits of a barrage, and in what detail have they substantiated their figures to you?

Gregory Barker: We have not seen the details behind the Hafren Power figure. They have not been made available to us. So we can’t comment in detail, but they do seem very high. They certainly don’t compare to our feasibility study estimate or to the number of jobs we would expect from a similar generation capacity for, say, nuclear energy. Our feasibility study estimated that a Cardiff-Weston barrage, impacting Bristol Port with deep-sea container facilities, would give net regional employment during construction of 440 jobs. As you say, the range of central estimate was from plus 5,500 through to minus 2,200 during an operation, and a net loss of 80 jobs within the range of plus 700 to minus 2,500 per year. Mr Gardiner, I would have to say again, in the absence of any definitive information, it is-if not meaningless-hardly helpful at all to speculate at this point.

Q371 Barry Gardiner: Let me clarify. Hafren Power indicated that they wanted the Government to take an in-principle decision, rather like HS2 where there was a public consultation and then there was an in-principle decision that this was a goer, subject to a lot of other things that then had to be worked out. They want you to take an in-principle decision, and yet what you are saying to us is that they just have not provided you with the details that could in any way be expected to lead you to take an in-principle decision.

Gregory Barker: Correct. I do understand that there-

Q372 Barry Gardiner: How humiliating is that for them?

Gregory Barker: That is for them to judge.

Q373 Barry Gardiner: I was asking for your opinion, Minister.

Gregory Barker: We appreciate that, if a project like this were to go forward, Government would have a clear role and you would not expect them to get all the way from drawing board to takeoff without considerable Government collaboration. But we are a long way from seeing a serious, meaningful proposal with which we can effectively engage, and which would be a useful deployment of taxpayer money and resources in terms of evaluating such a proposal, as I say, particularly coming so soon after the 2010 report commissioned by the last Government.

Q374 Barry Gardiner: Turning to that 2010 report, the Cardiff-Weston barrage was identified in that report as the best value for money-I think that is a direct quote by DECC-and it was subsequently disregarded on financial rather than environmental grounds. Can you elaborate on what concerns, if any, either DECC had or that were expressed across Government about environment impacts and, if so, did those influence the decision not to take the proposal forward at that time?

Gregory Barker: Most of that report was drawn up before I was in Government, so on this one I might defer to my officials if I may.

Barbara Garnier Schofield: The type of impact that we were concerned about were mostly on the wildlife and the habitats, particularly birds and migratory fish. On birds, we found that a Cardiff-Weston type of barrage would impact significantly on a number of water birds and that numbers would be expected to fall by between 25% and 49%. Also, with respect to fish, we found that there would be a significant negative effect on migratory and estuarine fish, and also on freshwater fish in the catchment of the Severn River.

Q375 Barry Gardiner: Indeed. Did those influence your decision not to take the proposal forward at that time?

Barbara Garnier Schofield: I think there were a range of issues around the Cardiff-Weston proposal. You do state rightly that it was seen as the most cost-effective of the five solutions, but it was still quite expensive; a huge amount of capital costs and the economic benefits were relatively limited compared to the huge scale of the environmental impact.

Trevor Raggatt: Of course, it is also worth remembering that the actual cost of the proposal for the Cardiff-Weston barrage under the previous report was not simply the cost of putting casings in the water and buying turbines for support. It would wrap up within it all of the costs of the project, a substantial amount of which would reflect the environmental concerns and the need to ameliorate damage and create compensatory habitats. While the headline statement was that it was not economically viable, that, of course, hides a huge amount of detail and many factors leading into that single-summary statement.

Q376 Barry Gardiner: Sure, and I take that. Perhaps you could give us a feel-and it may be no more than that-for how DECC would weigh up the climate change, the energy security, the environmental benefits and impacts that go into taking this decision. I think all of us see that here we have a potential energy resource that, if one could capture it free of any dis-benefit and extraneous costs, then it would be wonderful if we could do so. How are you going to weigh up the costs and benefits here, and could you say what role the Natural Capital Committee might have in this and the reports that they would make through to the Economic Sub-Committee of Cabinet? This seems to me, through your White Paper last year, a particularly obvious source of advice that you might be seeking.

Gregory Barker: First, with respect to Natural Capital, you are absolutely right, Mr Gardiner. We have not done this before, so we would be slightly inventing the process with those particular mechanisms. We would be setting a precedent, but that would seem a very sensible way to make sure that we drew on that excellent work that they have done. I think the first comparison would be with other forms of low-carbon or zero-carbon generation. We would say, what would be the environmental and financial implications of investing in an equivalent in offshore wind or nuclear or other? That would be the first test, and if it was significantly out of kilter with the impacts, financial or environmental, with those other technologies then that would be-

Barry Gardiner: Predispose you one way or the other.

Gregory Barker: If the answer then came forward, "It compares favourably with those technologies, on either one or both of those," we would then drill down to the next level. We have no doubt that there could be clear energy and climate change benefits from a barrage, in principle. It is also clear that a barrage is technically feasible, although there would be technical challenges specific to the Severn Estuary, such as the potential for turbine siltation, and the size of the barrage would need to be carefully considered. However, as I say, there are a number of other technologies that provide similar energy and climate benefits to a barrage. We would have to drill down further and see that those benefits are coupled with a number of factors, which we would summarise as being an acceptable impact on the environment of the estuary. There are a number of indicators that you would have to look at in order to come up with that. Flood impacts on the wider area would be a key element. I think Mr Lavery or Mr Robertson mentioned the flood impacts.

Obviously, we would look at the job benefits, at both local and national level, and the impacts on local industry as well-the long-term impact of putting a barrage in place-and we would look at value for money. The environmental element would play a very significant role in that thinking, and we would look to use the new architecture that we have put in place.

Q377 Barry Gardiner: Thank you. That is very helpful. You will know the IROPI test?

Gregory Barker: I don’t.

Barry Gardiner: Now I have to remember it myself, what it stands for. It is overriding public interest, basically. It is to make sure that there is an overriding public interest.

Gregory Barker: Sorry, yes. I remember now.

Chair: Imperative Reasons of Overriding Public Interest.

Barry Gardiner: Thank you, Chair.

Chair: Such as by-election results.

Barry Gardiner: Very good. Of course, in relation to that, the Habitats Directive requires that the IROPI tests are met. You can get a derogation under specific terms and conditions of mitigation and compensation for the degradation to biodiversity and the ecology. When you are considering this-and let us say, while I perfectly understand you would be advised by Defra and by other statutory consultees-when you are taking an eventual decision on this, how do you feel the relevant weight of combating climate change and protecting our natural environment as it currently stands can be weighed one against the other?

Gregory Barker: A very good question, and very difficult to answer except to say you would have to look at-in terms of the fight against climate change, it is very simple-are we on track to meet our 2050 commitments? Are we on track to play our part in reducing global emissions, which are a fraction of global emissions, but, nevertheless, it is very important that we meet that, and are we on track? If there were no alternative to the barrage that would enable us to meet our 2050 target, then I think the question that you pose would be at its most acute, i.e. unless we went down the road of the barrage Britain would miss its 2050 target, but I am not aware that anyone is seriously saying that is the case. It is not in our 2050 road map. It is not deemed as yet to be an essential element of a successful 2050 package and, therefore, I think, weighing it up, there are better arguments.

Q378 Barry Gardiner: Thank you. I think that is possibly the most interesting answer we have heard today because, of course, the Habitats Directive sets out that the primary consideration here-it is almost a precondition-is if there are no suitable alternative solutions to the project. In effect, what you have done for us, Minister, is to define in what context that phrase must be interpreted, and that is the context of, "Are we going to be able to solve our problem of reaching our 2050 targets?" The primary question that the barrage would have to answer is, "Are there no suitable alternative solutions to getting to our 2050 targets?"

Gregory Barker: I think the alternative would need to include cost to consumers as well as technical solutions.

Barry Gardiner: Absolutely, yes. Thank you very much.

Q379 Ian Lavery: If I can ask you a number of questions on marine technology and alternative technologies. First of all, Hafren Power have stated that once the hybrid Bill legislation has been passed and that an AIA would be completed then they would look to sell the entire project off to a sovereign wealth fund. If that happened, how would the Government ensure that the full investment benefits remained here in the UK?

Gregory Barker: Firstly, I think it almost incomprehensible that a single sovereign wealth fund would want to acquire the entirety of a £50 billion sterling project, because one of the guiding principles of sovereign wealth funds is to have a balanced portfolio and, even for the largest sovereign wealth fund, £50 billion sterling is a pretty healthy chunk. In terms of end ownership, it might be that one wealth fund could conceivably underwrite even such a large figure as that. Sorry, I think I said £50 billion. I mean £25 billion but the comment remains the same. It is still a very big chunk for a single investor to swallow. I think it would be more likely to be syndicated among a number of sovereign wealth funds or institutional investors.

I don’t see this as being a problem in itself because if they are a financial investor I am not clear what you would be concerned might be exported. The supply chain for the barrage clearly would have an impact on UK jobs, potentially. We would want to make sure that, if it did go ahead, there was maximum UK content, but I think in the longer term you can’t export the maintenance and the-

Q380 Ian Lavery: You would not have too many concerns about that?

Gregory Barker: In terms of the hierarchy of concerns, that is not my largest. I would be concerned to ensure that there was a high level of UK content in the project, and that the economic benefits to the UK of such a scheme were compelling, but I don’t see the fact that potentially it could be backed by a sovereign wealth fund from abroad necessarily being a barrier to that. Could I ask what you were thinking there? What was your concern about?

Ian Lavery: Well, the whole issue. If Government is prepared to put a lot of British taxpayers’ money and consumers’ money into a scheme, such as the barrage, and that is then basically passed on to a sovereign wealth fund, just to make sure that the benefits remain here in the UK.

Gregory Barker: Which benefits are you talking about, the financial benefit or the-

Ian Lavery: Any potential benefit.

Gregory Barker: But what?

Ian Lavery: Jobs, security, maintenance, consumer costs.

Gregory Barker: In terms of jobs, security and maintenance, it would not matter who owned it, you could not export those. If the China Investment Company invested, they would be hard pushed to export the maintenance jobs to Beijing. For example, London Array, a big energy project, the largest single investor in that is the sovereign wealth fund from Abu Dhabi, and we are very happy indeed to have them as a shareholder. Our concern is not about the underlying ownership. Our concern is about the supply chain because, with London Array, I think around 80% of the content there was sourced from abroad. It is not the underlying ownership. It is where the supply chain and the value are for the project, particularly the construction of the project, because the ongoing maintenance jobs, by definition, have to be local. I think we would want to make sure, if there were such a project, that it had a high level of UK content in construction.

Q381 Ian Lavery: Yes. The issue on marine technology, with regards to the best way to oversee the development of such technology in the UK, and to ensure best value with minimal environment impact, is through a public body. That is what some commentators have said at this moment in time. Looking at the Scottish Government, they have set up a directory to manage marine resources. Would DECC consider setting up such an agency to potentially manage the Severn Estuary project and other tidal resources in England and Wales?

Gregory Barker: The conclusion of the STP study made it clear that any barrage scheme, coming forward in future years, would be privately led and privately funded. Therefore, it is not our intention that the Government should co-ordinate or lead such a project. But if such a project provided compelling evidence that it could be viable, affordable and environmentally and economically sound, and it was decided that such a project was in the interests of the UK then obviously we would play an active role.

Q382 Ian Lavery: The marine energy projects have upfront capital costs and are likely to require a high level of strike price-which you mentioned before-until the technologies and sales mature and become more commercially viable. Do you think there is a risk that the contracts for difference mechanism will perhaps side line marine resources in favour of more mature technologies, more affordable technologies, undermining what potential opportunity there is to take advantage of the UK’s significant tidal resources?

Gregory Barker: No.

Ian Lavery: Not at all?

Gregory Barker: No. I was speaking yesterday at the RenewableUK Wave and Tidal Conference, and was very clear that we want to work with the industry to ensure that that is not the case.

Q383 Ian Lavery: Getting back to the Severn barrage, it has been discussed for decades, and I think, as a Minister, you say the Government remains open to considering any well-developed proposals for harnessing the Severn Estuary energy. It has been discussed for decades that there is a proposal from Hafren. Isn’t it time that the Government gave less consideration and more action, in terms of tidal projects, so it can get them off the ground? This Committee is terribly committed to wave and tidal projects, as the Chair outlined earlier.

Gregory Barker: In terms of the biggest opportunity, which is technically the Severn, we still rely on the relatively recent report that the last Government commissioned, that reported in 2010, which basically said to date the economic case was not proven. Until we see that the economic case is proven, I don’t think the British consumer would thank us for embarking on these massive infrastructure projects that are not fundamentally economic. As I have said-and I hope it has come across very clearly in this evidence session-if the private sector can return to us and show that things have changed or a new economic model has been developed or technology costs have come down, so that it would be economically feasible, we remain open to it. But the best judge of that is the private sector rather than Government.

Q384 Ian Lavery: There has been a lot of evidence put before the Committee with regard to the proposal from Hafren. A lot of it has been pretty negative and a lot of it has expressed opposition to a suggestion that there would be a better way, advocating a more step-by-step approach. What would your response be to those organisations that recommend a more incremental approach than this huge approach of the Severn barrage?

Gregory Barker: We are still committed to considering well-developed proposals for harnessing the energy of the Severn Estuary. Whether these are smaller projects and, as such, part of a step-by-step approach, or a single large project, we will apply the same criteria, namely, "Are they economically feasible and do they have an acceptable environmental impact?" So, it should be affordable, environmentally responsible, and most of all represent good value for consumers. We are open-minded about this, Mr Lavery, and don’t in any way wish to rule out smaller, incremental, step-by-step projects as you suggest.

Q385 Ian Lavery: I take it there have been discussions with DECC regarding the tidal lagoon at Swansea Bay. I wonder if you could perhaps-

Gregory Barker: I have not personally but-

Trevor Raggatt: Yes, indeed. We have had some contact with the company that is proposing that project. In fact, Barbara and I are meeting them next week to get an update on how they are going. Certainly, they are one of the other potential suite of projects that could be pursued in the Severn.

Q386 Ian Lavery: At this point in time, are you able to make any assessment of the technical and economic viability of the Swansea Bay scheme? I think it has been suggested that they aim to delivery 10 GW of electricity.

Trevor Raggatt: Not as of yet. That is what we are hoping to talk to them about next week. I would be surprised at 10 GW, which is larger than the barrage itself, bearing in mind that Swansea Bay is a relatively modest project compared to the Cardiff-Weston project, but certainly we look forward to hearing from them.

Gregory Barker: Could I suggest, Mr Yeo, that I might write with an update on my officials’ meeting?

Chair: Yes, that would be helpful. Thank you very much. We have come to the conclusion. A very interesting and useful session from our point of view, and can I assure you this Committee is on this issue-as on all others-completely open-minded as well, and our open-mindedness has been increased by the evidence you have been able to give us this morning.

Prepared 21st March 2013