Energy and Climate Change CommitteeWritten evidence submitted by the Department of Energy and Climate Change
Introduction
1. Due to its outstanding tidal range resource, the Severn estuary has been considered for the siting of a number of tidal barrages and other tidal schemes over the years. A barrage across the Cardiff-Weston alignment is widely considered as the main option for a tidal barrage scheme, which would allow maximum energy extraction from the Severn.
2. Recognising the potential of the Severn Estuary for renewable energy generation, the Government carried out an extensive feasibility study on Severn Tidal Power (STP).1 The study, which investigated in depth a number of schemes including a Cardiff-Weston barrage, concluded in 2010 that there was no strategic case for public investment in a Severn tidal power scheme at the time, as there were cheaper and easier alternatives. The Government did not, however, rule out a privately-funded scheme coming forward. This position still holds.
3. Since the outcome of the feasibility study, a number of developers interested in proposing schemes for the Severn estuary have engaged with the Department of Energy and Climate Change (DECC). The most advanced proposal to date is the outline business case submitted to the Government in November 2011 by the Corlan Hafren consortium for a Cardiff-Weston barrage. The consortium subsequently broke down. it has now reformed with a different membership and management team into Hafren Power. Their proposal remains largely unchanged. Although the terms of reference of the inquiry do not mention the consortium by name, we understand that it aims to focus on the Hafren Power proposal.
4. The answers below are based on the in-depth STP feasibility study carried out by the Government and, where possible, on our knowledge of the Hafren Power proposal. It should be noted, however, that, due to the very early stage of development of the proposal to date, it is in most cases difficult to anticipate what the real impacts of the Hafren Power proposal will be and how these would really differ from the Cardiff-Weston barrage model investigated as part of the STP study.
Q.1 What contribution could the Cardiff-Weston Barrage make to UK energy security and climate change objectives?
5. The 14 metre tidal range of the Severn estuary is among the largest in the world and represents 8–12GW of energy capacity. A Cardiff-Weston barrage could provide up to 5% of our current electricity needs from an indigenous renewable source, as a result benefiting the UK energy security. The STP study estimated that a 8,640 MW installed capacity Cardiff-Weston barrage could generate 15.6 TWh/a.
6. Although intermittent, the provision of electricity through a tidal scheme (barrage or other) is highly predictable and, as such, could bring benefits to the balancing of the energy system.
7. A barrage would generate carbon-free electricity over a long period of time (c 120 years). The carbon savings from a barrage would depend on the type of alternative electricity generation it would displace. Should a strong case be made to take this forward we anticipate a barrage would replace generation type against which it could be proven to be more cost-effective—most likely Carbon Capture and Storage (CCS) and/or offshore wind—although this also depends on the future costs of these generation types.
8. Based on the STP study assumptions and on a scheme replacing a mixture of CCS and offshore wind, we estimate that a Cardiff-Weston barrage would displace 110Mt CO2 during its operations. Against coal with CCS, CO2 saved during operation is estimated at 219 Mt.
9. The STP study estimated that the carbon payback period (the number of years it would take for a barrage to pay back the carbon debt of its construction and operation) would range from
Q.2 What risks and opportunities could it pose with regard to flooding in the Severn estuary, and how might any risks be mitigated?
Q.3 What risks and opportunities could it pose to wildlife and habitat in the Severn estuary, and how might any risks be mitigated?
10. Although there could be some benefits for flood risk management upstream of a barrage from reduced spring tide and surge tide heights, the negative impacts could be very significant. For the Cardiff–Weston barrage model used in the STP study, the mean tidal heights increase upstream of the barrage were found to be potentially as much as seven metres. The change in tidal regimes is likely to cause extensive foreshore erosion within the impounded areas of the Estuary, undermining the integrity of existing flood defences.
11. The rise in water level could impede existing drainage systems in the low lying land around the Estuary, increasing the flood risk to property and agricultural land. The STP study estimated that the effects on drainage of a Cardiff-Weston barrage would increase the flood risk to some 50,500 residential and commercial properties, 28 critical infrastructure assets and 372km2 of land. Mitigation would need to be provided by installing a network of pumping stations or other measures.
12. STP study modelling work for a Cardiff–Weston barrage also shows an increase in spring high tide levels along much of the west Wales coast, with up to 30cm in the northern part of Cardigan Bay and the Llyn Peninsula. Smaller increases (up to 10cm) were predicted for the coasts of north Cornwall and south-east coast of Ireland. There are significant limitations to the modelling work and further study would be needed before it could be used
13. Any tidal barrage proposal across the Severn Estuary is also likely to have impacts on the wildlife and habitat in and around the estuary. Before such a proposal could proceed, these impacts would need to be carefully assessed in order to confirm the feasibility of providing appropriate mitigation or compensation.
14. The Hafren Power proposal is aiming to use a Very Low Head turbine concept which is being developed with lower environmental and flooding impact in mind. However the turbine hasn’t as yet been developed beyond concept stage and we have not seen any evidence confirming its potential.
15. More work to validate the effectiveness of the turbine and further impact assessment will need to be carried out for that particular proposal before the opportunities, risks and possible mitigating actions of the proposal can be adequately assessed—both with regards to wildlife and habitat and to flooding.
Q.4 What lessons can be learned from the successful development of La Rance tidal barrage in France and other tidal power projects?
16. There are significant difference between La Rance and proposal for a Cardiff-Weston projects, ranging from different environment, status, size, location and infrastructure. This makes attempting to use the La Rance barrage as a test case to inform an assessment of a proposal for a Cardiff-Weston barrage challenging.
17. We would however expect an assessment supporting a Cardiff Weston proposal to incorporate learning (design/environmental/planning/operational) arising from the other three tidal barrages elsewhere in the world.
Q.5 What risks and opportunities could it pose to local employment and community, and how might any risks be mitigated? In particular, what are the consequences for current ports, fishing and aggregate extraction industries in the estuary?
18. The STP study concluded that a barrage could benefit the regional economy with net value added to the economy and jobs created but that these would come at the expense of potential negative impacts on the current ports, fishing and aggregate extraction industries in the estuary.
Impact on ports
19. Ports upstream of a Cardiff-Weston barrage would be adversely affected by the scheme, most of all Bristol Port.
20. Bristol (Avonmouth and Royal Portbury Dock) is the 16th-largest UK port by tonnes handled and has a broad range of traffic. The Port also has plans for a consented deep sea container terminal (DSTC) with up to 1.5M teu2 capacity. The Barrage proposals represent a major potential threat to the viability of this project.
21. Proposals for a Cardiff-Weston barrage, to the extent that it is perceived that there is a serious possibility they would proceed, are already seen as an immediate risk factor for customer commitment and investment at Bristol Port. Prolonged uncertainty over the scheme is perceived as harmful to the Port and other businesses in the region.
22. Implementation of a barrage would require adequate provision for sea-locks for large ocean-going vessels to be built into the project specification to allow continued operation of the Port as a major commercial facility. Even with sea-locks of appropriate size, traffic would be slowed with consequent potentially significant damage to the Port’s competitiveness. Estimates from the STP study suggested a delay of around 45 minutes for each vessel berthing. Changes in siltation patterns from the barrage would also likely have adverse commercial effect on the Port.
23. Most traffic lost to Bristol as a result of a Barrage project would be likely to find another UK port of entry/exit, but at very significant (though difficult to quantify hypothetically) cost in economic and environmental terms, including detriment to inland connectivity (which is very favourable at Bristol)
24. A number of other ports east of the barrage will be affected by the scheme, including Cardiff and Newport, which are commercially substantial at over 2Mt/a each, although these generally handle smaller vessels. The extent of potential damage to these ports will depend upon the details of the proposal.
Impact on the fishing industry
25. The STP assessment noted that reductions in fish abundance would have adverse effects on commercial and recreational fisheries contributing to local economies. The assessment calculated commercial fisheries for salmon and juvenile and adult eel in the Severn catchment to be valued at £96,200, £299,000 and £36,000pa respectively in 2010, with recreational fisheries, particularly for salmon, valued at £28m. Sea angling is a major recreational activity in the Severn Estuary/Bristol channel: charter boat annual turnover was valued at c £1 million. These fisheries, and related economic activity (eg local hospitality industry, fishing tackle retail) would be adversely affected by a barrage and likely to seek compensation.
Impact on the aggregates industry
26. The STP assessment also noted that the aggregates industry, supporting around 1,100 regional jobs, would also be affected by the impacts of a barrage on water levels, sediment movement and deposition, access to currently licensed areas and by the necessity to pass through locks.
Net regional benefits
27. Taking these impacts on port, fishing and aggregates industries and the positive benefits on regional economy into account, the STP study estimated that a Cardiff-Weston barrage is expected to generate a net regional benefit in terms of gross value added (GVA) of £2.4 billion (with a range between £6.1 billion and -£0.8 billion).
28. In terms of regional employment, the central estimate is for 840 net additional jobs per year during construction (+5,500 to –1,600) and 120 during operation (+800 to –2,000).
29. Should the Bristol Port DSCT proceed then additional negative impacts of a barrage would be reflected on both GVA (£5.9 billion to –£1.5 billion with a central estimate of £2.1 billion) and employment range (annual employment during construction at +440 (+5,300 to –2,200) and operation –80 (+700 to –2,500)).
30. The above impacts were assessed on the basis of the Cardiff-Weston barrage model in the STP study which provided appropriate locks. Impacts from the current proposal may differ depending on the specific features of the proposal including adequate provision for sea-locks as well as location and scale of manufacturing, supply chain etc. If the project were to maximise use of domestic construction, manufacturing and supply chain, it could have the potential of providing 80% of the value of the project to the UK. A proportion of this would be accrued to the local area.
Further economic considerations
31. In addition, any local jobs and economic benefits need to be considered in the context of broader economic and job displacement from other generation technologies across the UK (including impact on longer term private sector investment in building UK supply chains for other technologies). Using offshore wind as a comparator, around 9,000–16,000 direct jobs could be created in this technology up to 2021 from a similar generating capacity to that of a barrage—including jobs in the associated supply chain. Also, it is estimated that up to 66,000 jobs could be generated by 2020 if the industry continues the long term investment and building the supply chain to support offshore wind deployment.3
Q.6 Would the project require support under the proposed new Contracts for Difference mechanism? If so, approximately what level of strike price would be required to make the project economically viable?
32. It is not for Government to comment on what level of revenue support would make a privately funded project economically viable. 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 value for money of the project via the CfD regime.
33. Although the capital for the Hafren Power proposal would be provided by private investors, the consortium has informed us that it would require revenue support via CfD in order to provide a suitable return for investors. Government would need to take a view as to whether the level requested represented value for money such that offering a CfD would be in line with the principle of decarbonisation whilst minimising the cost to consumers.
34. Any CfD funding would need to be value for money and considered against support for other low carbon technologies in the context of the Levy Control Framework.
Q.7 How does the company plan to engage and consult the community in the development of the project?
35. This is a question for potential developers of projects, including Hafren Power.
Q.8 Are the proposals in breach of EU legislation, and if so how will this be addressed?
36. It is not possible to judge at this stage whether a proposal (or a decision to allow a proposal to be constructed) would or would not be compliant with European legislation—this would require a robust assessment of the project which cannot be undertaken until plans have reached a much more detailed stage.
37. However, the Severn Estuary is protected under the EU Habitats Directive as a European site and any tidal barrage proposal across the Severn Estuary is likely to have impacts on the wildlife and habitat in and around the estuary. Any proposal would need to be able to show these impacts would not have an adverse effect on the ecological integrity of the estuary or that the impacts could be compensated for elsewhere to maintain the coherence of the wider “Natura 2000” network of European sites.
38. There are however limits on whether compensation is possible:
First it would need to be shown that there are no alternatives to the project and that there are imperative reasons of overriding public interest (IROPI) for it going ahead.
Second there are practical constraints such as the technical feasibility of recreating habitats, and the need to find sufficient land for habitat recreation.
This situation is in line with 2010 STP feasibility study, which concluded:
“...the scale and impact of a scheme would be unprecedented in an environmentally designated area, and there is significant uncertainty on how the regulatory framework would apply to it. The study has considered ways in which to reduce impacts on the natural environment and also how to provide compensation for remaining impacts on designated features. It is clear that the compensation requirement would be very challenging, however defined, and require land change within the Severn estuary and probably outside it also”.
Q.9 Are any other proposals for tidal power projects in the Severn estuary currently under consideration?
40. Besides the Hafren Power proposal, the Government is aware of other active Severn tidal power projects under consideration by other developers. These projects are mostly in early stage of conceptualisation and would need significant further work. In November, Regen SW published, as a discussion document, an alternative vision for the generation of power from the Bristol Channel/Severn Estuary.4 The report suggests that using a multi technology strategy (utilising a mix of new concepts such as tidal lagoons and tidal fences, deployed in conjunction with tidal stream technology, wave and wind power) there is scope to provide up to 14GW low carbon/renewable energy capacity in a manner which benefits the communities on both the Welsh and English sides of the channel and with lower risk to the environment.
41. Other individual projects of which DECC is aware include tidal lagoons, tidal fence and tidal reef schemes. Although some of these projects are more advanced than others, we have not seen evidence that these proposals have secured financing or been sufficiently progressed to warrant detailed consideration by DECC at this stage.
Q.10 What could be the wider international implications of the scheme for UK engineering and UK low-carbon industry?
42. The UK is a world leader in tidal device innovation and has a strong and growing supply chain, including a creative engineering base and expertise in marine foundations and moorings. As a result there could be valuable export opportunities from a Severn tidal scheme.
43. The export potential from a tidal barrage may be more limited as there are only relatively few sites around the world with the combination of features (height of the range, dimensions of the basin, depth of the water) to make a tidal barrage viable.
44. The actual implications for UK industry and engineering of the Hafren Power proposal or any other tidal scheme depend on the exact nature of the project, including confirmed use of UK manufacturers and supply chain, among other things. As noted above, if the project were to maximise use of domestic construction expertise, manufacturing including of the turbine and associated supply chain, it could have the potential of providing 80% of the value of the project to the UK.
Conclusions
45. The STP study provided invaluable evidence of the complexity of balancing the positive and negative impacts of a potential Cardiff-Weston barrage.
46. The Government remains open to considering any well-developed proposals for harnessing the Severn estuary energy, including barrage and other alternatives. Any scheme would need to demonstrate strong evidence of value for money, economic benefits, energy saving and environmental impact mitigation before the Government could take a view on its potential.
47. The current proposal from Hafren Power makes efforts to address some of the key issues highlighted in STP study. However we have not seen, to date, sufficient evidence that the proposal has yet been developed in enough detail to address the many uncertainties of the scheme.
48. Furthermore, value for money and affordability of the scheme need to be carefully considered against other technologies, as, whilst the scheme would rely on private finance for upfront capital, it would require Government revenue support to provide a suitable return for investors. The level of the required revenue support would need to compare favourably to the alternative generation technologies it would displace.
49. Should it develop further, the Government will consider the Hafren Power proposal with interest, in particular for further clear evidence and the robust work on impacts and mitigation that would be necessary to demonstrate a viable proposal against all the criteria mentioned above.
December 2012
1 http://www.decc.gov.uk/en/content/cms/meeting_energy/wave_tidal/severn_tidal_power/severn_tidal_power.aspx
2 teu—twenty-foot equivalent unit (standard container capacity measure).
3 Data taken from Renewable-UK (2011) “Working for a Green Britain: Vol 2” and Carbon Trust (2008) “Offshore Wind Power: Big Challenge, Big Opportunity”. Estimates of job per MW calculated using data within reports, and high and low estimates used to provide estimated range of jobs from a similar capacity of offshore wind compared to Severn Barrage.
4 Bristol Channel Energy—A Balanced Technology Approach: Discussion Document. Regen SW, 27 November 2012. http://www.regensw.co.uk/news/2012/11/27/media-release---bristol-channel-has-massive-renewable-energy-potential