Energy and Climate Change CommitteeWritten evidence submitted by Hafren Power

Hafren Power is a private limited company, incorporated in the UK and owned and controlled by a group of British entrepreneurs and investors. It was previously named Corlan Hafren. It has been created to build and operate a privately financed electricity barrage across the Severn estuary. Thus far, the company has remained dormant while its owners have financed the research and development necessary to bring the project to a point at which the next tranche of private investment could be attracted. The company is now active. In the last six months a team of specialists has been funded to fine tune the business case, verify the technology, address the environmental and commercial issues for the estuary, plan the execution of the project and determine how best to handle both delivery of the project with potential partners and its financing.

A confidential business case and supplementary documentation, prepared for the Department of Energy and Climate Change (DECC), was submitted to government by Corlan Hafren in November 2011 and February 2012. They were also sent to a number of Secretaries of State and Ministers whose departmental briefs touched upon the project. This included a number of Treasury Ministers, and those in the Welsh Office and the Department for Environment, Food and Rural Affairs (Defra). We understand that the document was well received on the basis of encouraging but informal feedback from various ministries, including HM Treasury.

The business case was also shared with the Welsh government, with whom a formal meeting took place in December 2011. Again, the Welsh government was supportive of what the Business Case aimed to achieve, and understood the economic benefits for Wales were the barrage to be built. This October the Welsh Assembly debated the creation of an electricity barrage over the Severn and Hafren Power’s proposal in particular. The Assembly unanimously passed the following motion:

“The National Assembly recognises the potential to produce renewable energy from the Severn estuary and the importance of such a project for the Welsh Government in achieving its renewable energy targets as well as the potential for the creation of employment and training opportunities; and believes that, in the development of such energy, the technology for extracting such energy should be designed to ensure that as far as is reasonably practical and proportionate, it has the minimum possible environmental impact.”

Hafren Power is now planning the preparation of an Environmental Impact Assessment (EIA) to support a hybrid bill to be placed before Parliament.

Executive Summary

Hafren Power plans to harness one of the world’s largest potential sources of renewable energy: the huge tidal range of the Severn estuary. Building an 18km barrage between Brean in England and Lavernock Point in Wales will be one of the largest privately funded engineering projects in the world.

Why is the barrage so important to the UK economy?

Powers 5% of the UK...

The barrage will be one of the biggest power stations in Europe, producing 5% of the UK’s electricity (16.5 TWh/year1). One barrage is equivalent to three to four nuclear reactors or more than 3,000 wind turbines. It will offset 7.1m tonnes of CO₂ per year, which according to DECC figures is worth £2 billion net present value to the nation.

...very cheaply for over 120 years

The barrage will deliver clean, secure, consistent and predictable base-load power generation for at least 120 years, and probably for much longer. For at least 90 years, it will produce by far the cheapest electricity in Britain.

Creates 50,000 jobs...

Our proposal will regenerate the economies of South West England and South Wales. Construction of the barrage will employ at least 20,000 workers. We plan to set up skills centres to train local residents. The barrage project will induce or indirectly create another 30,000 jobs.

...over 10 years

We will need two years for design, turbine testing and development, an Environmental Impact Assessment (EIA) and further detailed fish and bird studies, seven years to build the barrage and two years to reach full installation. The barrage could be partially operational by the end of 2020 and at full capacity by the start of 2025.

A £25 billion direct investment into the UK...

The barrage will cost up to £25 billion to build and will be financed by Sovereign Wealth Funds and other infrastructure investors. It will not require public money for construction. During a time of public-sector contraction, it will provide the UK with a private-sector stimulus, including multiplier effect, of around £70 billion.

...of which 80% will be spent in the UK

80% of the £25 billion investment will remain in the UK. Hafren Power and its associated companies will build components locally and will develop a heavy industry and technology hub by:

creating two turbine manufacturing plants, one in Wales the other in the Bristol area for the assembly, build and maintenance of the 1,026 turbines;

expanding the steelworks in Port Talbot;

building concrete plants and casting basins for the 238 caissons.

How will the barrage affect the environment?

Reduces the environmental impacts of previous schemes...

This proposal focuses above all on mitigating the environmental impact on the Severn estuary. Hafren Power’s innovative turbines spin slowly, so fish can swim unharmed through the turbines or bespoke fish passes. Our turbines are also bi-directional and do not hold back high heads of water, so the tides are more natural. This means we preserve 60% more intertidal habitat than previous schemes proposed, saving the feeding and roosting grounds of wading birds.

...and compensates for the remaining impacts

Around 49km² of intertidal habitat will be lost. This is almost the same amount as would be lost anyway due to rising sea levels, according to Defra projections. To create new habitats for birds and to fund other mitigation measures, Hafren Power will invest up to £1 billion.

Saves the UK billions in flooding costs

The barrage will defend 90,000 properties and 500km² of flood plains from flooding. Government forecasts of coastal and tidal flood damage and defence costs in the Severn estuary over the next century range from £2 billion to £15 billion on a net present value basis. From 2023, when the barrage structure is complete, taxpayers would therefore save many hundreds of millions of pounds a year in flooding costs.

A sustainable legacy for Wales and the South West

A legacy of industry, jobs, and growth

After construction, Hafren Power will consider converting the caisson casting basins into a port for ultra-large container ships. This ULC port would enable safer navigation and faster transit. The UK would be able to export its expertise in turbine technology and barrage construction from here to many sites around the world.

Boosts tourism and leisure activities

The calmer estuary waters upstream of the barrage will encourage tourism and water sports. The barrage will be one of the world’s great structures, with architectural input from the designers of the London Eye. It will become a major attraction, much like the Øresund Bridge, which was designed by the UK consultant that is engineering the barrage.

How does the barrage fit into the UK’s energy mix?

Barrage electricity is reliable...

Tides can be forecast for centuries ahead, making tidal power the most predictable and consistent of all renewable energy technologies. The barrage will produce clean, completely predictable base-load electricity on average for 15.25 hours a day.

...and secure

The UK currently imports 30% of its energy. The barrage will help reduce fuel imports and price fluctuations, thus improving the UK’s energy security. Over the next decade the UK will lose around a fifth of its generating capacity2—a gap that the barrage can help fill. By 2030, based on DECC forecasts, the barrage will offset 30% of this “electricity gap”.

Power from the moon

Tidal power is primarily lunar power. All other renewable energy sources are effectively solar: both intermittent sources (wind and wave) and consistent ones (hydro and biomass) ultimately depend on the sun. The barrage will diversify UK energy production by adding tidal to the nuclear, coal, gas and solar-based renewable mix.

What will the barrage cost the nation?

Less than other low-carbon technologies

Uniquely, the cost of price support can be netted out against savings in flood defence and flood damage, consequent increases in land and property values and the offset of carbon dioxide. Since Hafren Power will fund the construction privately, the barrage will be highly affordable for the nation.

UK’s cheapest electricity into the 22nd century

Uniquely, price support lasts for less than 25% of the barrage’s minimum working life. After the initial period of price support, it will produce inexpensive clean electricity at around £20/MWh—a quarter the price of coal, gas or nuclear—for over 90 years3. The levelised cost4 of the barrage is much lower than all other forms of generation, as depicted below.

Severn barrage—the UK’s cheapest electricity over 120 years

What does the government need to do?

Authorise the project...

The government will need to sponsor the passage of a hybrid bill through Parliament, and agree the scope of the Environmental Impact Assessment, public consultation and ratio of habitat compensation.

...and support the electricity price

In order to provide a commercial return, we require the standard renewable support for 30 years. This price support could be through the Renewables Obligation Certificate (ROC) scheme or a Feed-in Tariff with Contract for Difference (FiT CfD), as introduced in the Energy Bill. If electricity prices rise above an agreed level, FiT CfDs ensure that consumers benefit from the rise.

Q1. What contribution could the Cardiff-Weston barrage make to UK energy security and climate change objectives?

The barrage will make a positive contribution to both energy security and climate change objectives. It will also enrich and diversify the energy mix.

Energy Security

1. The key benefits provided by the barrage for security of UK electricity supply are diversity and predictability. The barrage will harvest the electricity from the world’s second largest tidal range (14 metres), not only capturing power from a massive latent national asset, but also thereby reducing dependence on non-renewable fossil fuels and introducing a highly desirable diversification into the mix of renewable energy generation. The barrage5 would generate on average for 15.25 hours out of the 24 hour 50 minute tidal cycle, generating on both ebb and flood tides to provide annually 16.5 TWh6 of low carbon renewable energy. Relative to the National Grid Gone Green scenario7 of 328 TWh, this represents 5% of UK electricity demand. This amount of electricity is equivalent to that produced by three to four nuclear reactors.

2. Variability of output is one factor for power provided by a barrage as it is dependent on tidal cycles that have slack periods. More importantly, however, the barrage can be considered as variable “base load”8 generation, since the tides are entirely predictable. Tidal power is lunar9, being dependent on gravity, principally from the moon. Tides can be predicted hundreds of years in advance. This means that electricity from the barrage is completely predictable. Whilst other renewables are intermittent and unpredictable, the barrage would provide consistent and predictable electricity. This predictability allows the national system operator to know, with considerable certainty, the output that would be provided by the barrage in any future half-hour period. Wind, wave and solar renewable energy sources are intermittent and unpredictably variable with the disbenefit that, overall, it is difficult to know what availability can be relied upon. This specifically reduces the security risk that could arise from a widespread period of low wind across the UK. Indirectly is also reduces the risk from fossil fuel interruptions, especially gas, whilst increasing the UK’s energy resilience and reducing the balance of trade deficit.

3. Variable base load power is superior to intermittent generation because it enables predictable balancing of supply and demand. This is likely to be further reinforced by the development of storage technologies and the increased use of electric vehicles (inherently these are dispersed storage) so that the predictable but variable barrage base load will be able to be matched with demand profile. By 2025 it is anticipated that fully functioning dynamic demand response (DDR) measures will be in place using smart grid and smart meter technology. This will be particularly well suited to balance the predictable variability of the output of the barrage.

4. Unlike conventional power plants, the barrage is not susceptible to “single-point failure”. As electricity from the barrage is generated by 1,026 very-low-head (VLH) bi-directional turbines, the loss of one or more turbines due to breakdown would cause only minimal reduction in total output, whereas for nuclear, for example, the loss of a reactor would reduce output significantly, by as much as 1.65 GW10.

5. By 2020 the UK will face an electricity generation gap11 of 60 TWh and will require a mix of generation sources to meet this need. The UK will lose around a fifth12 of its current electricity generating capacity over the next decade as old plants reach the end of their lives. By 2025, when the barrage is in full operation, most existing coal-fired plants are planned to be closed.13 The barrage will provide a major component of the new required replacement generation, as depicted in Figure 1.

6. It has recently been announced that much of the coal-fired generation will be replaced by up to 30 new gas-fired turbine plants14. These have the flexibility to complement the barrage power generation profile, filling the fully predictable periods of non-generation. However, gas is still a fossil fuel, albeit half as pollutive as coal, so it will not contribute to meeting the UK’s renewable energy targets.

7. It is understood that the new power plants will be fired by gas imported primarily from Qatar and Norway15. To an extent which is unclear at this early stage, gas may also be available through fracking. The barrage will generate electricity securely through the movement of tides in British waters.

8. Hafren Power is exploring the opportunity to use the barrage for pumped storage. When other renewables produce surplus energy, the barrage could pump and store water, ensuring that excess electricity is not wasted. The scale of the barrage is such that even if pumped storage is only used to a limited extent, it could nevertheless provide a significant boost to the UK’s pumped storage capacity.

Figure 1

SEVERN BARRAGE REDUCES ELECTRICITY GAP BY 30%

Contributing to Climate Change Objectives

9. The barrage will save 7.1m tonnes of CO₂ per year compared to equivalent fossil fuel generation. It will be carbon neutral after the first 2.1 years of operation. This payback period secures a much longer period of zero carbon generation of at least 118 years—much longer than all other renewables.

10. The government’s energy and climate change goals are “reforming the electricity market for purposes of encouraging low carbon electricity generation or ensuring security of supply”16. The government intends to use a variety of sources for energy—nuclear, coal, gas, wind (onshore and offshore), biomass, wave and tide. It is also understood that, to fill any gap in production of electricity, the government will import the shortfall in the form of liquefied gas. Not all of these sources support binding commitments towards the 2050 carbon emissions target. The barrage does.

11. The Climate Change Act 2008 sets legally binding targets to reduce greenhouse gas emissions by at least 80% below 1990 levels by 2050, with an interim target of 35% by 202017. The 2009 Renewable Energy Directive sets a target for the UK to achieve 15% of its energy consumption from renewable sources by 2020.

12. The Department of Energy and Climate Change (DECC) estimates that the 2020 target of 15% renewable energy converts to a 31% renewable electricity target18. On this basis, if the total end user electricity demand by 2020 is 328 TWh19, this would suggest that 102 TWh should come from renewable sources. The barrage, at 16.5 TWh, therefore represents 16% of this 2020 target renewable power share. Hafren Power is engaging with experts to investigate the compression of the construction period to assess whether it is possible to produce some initial electricity by 2020. Although the barrage will probably not be generating at full capacity until 2025, the EU will look favourably on schemes under construction.

13. The Committee on Climate Change’s objective is to decarbonise the UK power generation sector by 2050 (i.e. <50g CO₂/kWh). In 2011, the power sector mean carbon intensity was 486g CO₂/kWh20. If the 50g target by 2050 is met, the value of the barrage’s carbon offset, according to DECC’s central forecast for carbon prices21, is £2 billion net present value over the life of the barrage. However, if the 2050 target is not met, then this offset will be worth far more.

14. If some degree of pumped storage were to be introduced, as mentioned above, the carbon offsetting value of the barrage would also be significantly increased, as well as its contribution to the financial value of the re-sale of peak demand electricity.

15. Norway produces 98% of its domestic electricity from hydro power. After making substantial initial investment to build their hydro plants, Norway now enjoys wholesale electricity prices 65% lower than in the UK.22 In the same way, after the 30 year period of price support, the barrage will be the cheapest electricity source in the UK for at least the next 90 years, producing electricity at just £20/MWh.

16. Hafren Power submits that the barrage will generate much cheaper electricity than all other generating sources when cost is considered, as it should be, over the full lifetime of the generating assets. Coal and gas plants and offshore wind farms only operate for a maximum of about 30 years. Over the 120-year minimum life of the Barrage, therefore, these other types of generating assets would need to be built or substantially replaced four times. Similarly, nuclear plants, with a lifespan of about 60 years, would need to be built twice. To make a fair cost comparison with the Barrage, therefore, the levelised costs of offshore wind, nuclear, coal and gas must be averaged over several cycles (the red line in Figure 2, below). As shown in Figure 2, over its 120-year life, the Barrage will be the cheapest electricity source in the UK, with the lowest levelised cost.

Figure 2

SEVERN BARRAGE—THE UK’S CHEAPEST ELECTRICITY OVER 120 YEARS

Q2. What risks and opportunities could the Severn barrage pose with regard to flooding in the Severn estuary and how might any risks be mitigated?

The Severn estuary at present suffers from major flooding and is at risk of extreme events such as storm surges. The barrage will provide a means of controlling both tides and water flow, defending the estuary’s residents from marine flooding and producing significant flood cost savings for the nation.

17. The barrage and turbines will be operated to eliminate coastal, storm and tidal flooding upstream (to the east of the barrage). The barrage will defend an estimated 50,000 hectares of land from flooding and protect 90,000 existing properties23 for at least 120 years, in much the same way as the Thames Barrier protects London. Therefore, as well as saving the anticipated costs of flood damage in this area as sea levels rise, the barrage will also enhance the value of the land thus protected for potential commercial, industrial and residential development. It will also reduce insurance risk and consequently premiums for properties and companies in the region. The map below illustrates the extent of existing flood risk.

Figure 3

ENVIRONMENT AGENCY FLOOD RISK MAP

18. As Hurricane Sandy in New York demonstrated in October 2012, storm surges can be devastating. In 2010, a storm surge from the Atlantic, dubbed Xynthia, narrowly missed the Severn estuary. When it made landfall in France, it overwhelmed flood defences and caused €1.3 billion of damage24. Funnel-shaped estuaries, such as the Severn, exacerbate the threat. The notorious 1607 Great Flood, which inundated swathes of the Severn and Bridgwater flood plains, resulting in considerable loss of life, is now believed to have been a storm surge and not a tsunami25. As sea levels rise over the next century, the incidence of severe storm and tidal events (depicted in Figure 4) are expected to increase. According to DECC, the Severn estuary can expect surges of 2m above the normal tide26. The barrage will be designed to ensure that such events could not overwhelm Cardiff, Bristol and Newport and would protect all upstream coast line. In the event of extreme weather, the barrage would simply be closed and act as a sea defence. It is hard to place a clear monetary value on this protection. However, it is undoubtedly substantial, as extreme weather becomes a more regular natural phenomenon around the world.

19. The Department for Environment, Food and Rural Affairs (Defra), the Environment Agency and DECC predict that over the next century annual average flood damages in the Severn estuary will increase as sea levels rise. However, their projected costs of flood damage and defence vary substantially, from £2 billion to £15 billion on a net present value basis27. It is incontestable that the construction of the barrage will result in substantial reductions in flood costs. On the basis of these government numbers, Hafren Power estimates that the barrage will reduce flood costs by at least £2 billion but probably closer to £8.5 billion net present value. This is a saving to taxpayers and to the nation. Hafren Power has sought to verify the government cost estimates with Defra, but has been unable to arrange meetings to do so. The estimates will be refined and discussed with Defra and the other relevant government departments in the course of preparing the Environmental Impact Assessment.

20. Hafren Power is studying the option of building a Bridgwater Bay bund to protect the 160,000 hectares of Somerset Levels from seawater flooding, which would otherwise be particularly vulnerable to sea-level rise. The bund could comprise an additional small barrage with locks and turbine electrical powered generation.

21. Further analysis is provided in Appendix Item 1.

Figure 4

EXAMPLES OF SEVERE STORM AND TIDAL EVENTS AFFECTING THE SEVERN ESTUARY28

Q3. What risks and opportunities could it pose to wildlife and habitats in the Severn Estuary and how might any risks be mitigated?

The barrage will affect both birds and fish. Hafren Power will work with all stakeholders to minimise this impact to a level that is as low as reasonably possible. Hafren Power’s turbines will be designed to be fish friendly and additional mudflats can be created.

22. The barrage was designed from the outset with concern for its impact on both birds and fish uppermost. Hafren Power is already engaging with all stakeholders to minimise this impact to a level that is as low as reasonable possible. Hafren Power’s turbines will be designed to be fish friendly and additional mudflats can be created for wading birds.

23. There will be a number of changes to the tidal regime upstream (to the east) of the barrage:

Reduction in tidal range: for spring tides, the range would reduce from around 14m to around 10m.

Reduction in tidal currents: the bed of the estuary will be subject to less erosion.

Reduction in suspended sediment levels: increase in light penetration through the water column.

Increase in photosynthetic activity: enhanced biodiversity in the estuary.

Reduction in wave heights and turbidity.

24. The main risks of the barrage to wildlife and habitats of the barrage would be:

Intertidal habitat (mudflats and saltmarsh): This is protected under the EU Habitats Directive and the Ramsar Convention. The spring tidal range upstream of the barrage will reduce from 14m to around 10m. This will reduce intertidal habitat by 49km² and affect biodiversity. However, current projections for a sea level rise of 0.76m by 209529 will reduce intertidal habitat anyway by around 30km². Sea level rise of 1.43m by 214030 will increase the loss.

Wintering birds: These rely on intertidal habitat and are protected under the EU Birds Directive and the Ramsar Convention. Changes in tidal regime and estuary morphology would affect the extent, availability and quality of the intertidal feeding resources and therefore the appeal of the estuary to vulnerable and dependent species in the absence of appropriate mitigation.

Migratory fish: These move past the barrage line and six species are protected under the EU Habitats Directive. For fish, the main risks are likely to be damage passing through turbines or from pressure, disorientation leading to predation and delays to migration and predation.

Other risks: These include secondary effects on terrestrial and marine ecology further afield as a result of the proposed development (temporary and permanent works, ancillary and associated development), impact on habitats downstream of the barrage affected by flooding and the economic impact on businesses dependent on the estuary i.e. fishing etc.

The impact on biodiversity will be mitigated through the operation of the barrage and the optimisation of the turbine design. The development of turbines specifically designed to allow safe transit for fish and crustacea (eg shrimp) is key to this proposal, and there has been considerable progress in the past few years by manufacturers worldwide—such as Rolls Royce, Voith, MJ2 Technologies, and Alstom—who recognise the absolute significance of this to the future of tidal energy. Hafren Power will work in collaboration with several manufacturers. Among them, Rolls Royce31 have designed a high efficiency turbine which also has “fish friendly” characteristics including: low risk of physical damage, low turbulence and low pressure changes. Research and product design is on-going in conjunction with turbine manufacturers and with internationally recognised aquatic biologists. The objective is 100% survival of all species of fish transiting the barrage, including resident marine species.

The bi-directional VLH turbines require a much lower head of water than conventional bulb turbines and so can operate both across the breadth of the estuary and over a longer part of the day. They generate on flood as well as ebb tides, in contrast to conventional bulb turbines, and will more closely emulate the natural tidal flows. This results in significantly less damage (up to 60% less) to intertidal habitat than previous proposals.

The tip speed of the turbine blades (around 9m/s) will be significantly lower than for conventional bulb turbines (around 25m/s). Turbines operating at below 12m/s result in negligible fish mortality32.

Turbine design will be optimised to minimise the runner gap (the area between blade tips and turbine casing) and other potential sources of fish trapping and damage.

The turbines will have geometry that can be varied during operation to pass more or less flow and also to control any rates of change of pressure to reduce incidences of fish injury from pressure during passage through the turbines.

These provisions are expected significantly to reduce the risk of strike and pressure damage as well as the disorientating effects of the turbines on fish passage and thus the propensity for fish predation around the barrage without them.

Screening technologies will be considered for reducing or preventing the passage of fish through the tidal energy turbines. These are likely to be based on behavioural guidance, which exploits the reactions of the fish, such as a preference for swimming in specific parts of the channel or in specific layers of the water column. This would include consideration of fish ladders, which over the past decade have been developed by the US Army Corps of Engineers together with turbine manufacturers, or by using bubble technology to guide fish into fish passes.

25. Other mitigation measures include:

Bridgwater Bay bund: As part of its mitigation strategy, Hafren Power is studying the option of building a bund around the entrance to the Parrett River. This would defend shelduck breeding grounds in Bridgwater Bay and Stert Point, as well as defending Bridgwater and the Somerset levels from sea-level-rise induced flooding.

Marine construction works: These can provide additional or improved intertidal mudflats and saltmarsh habitat for wintering birds upstream of the barrage. For example, topographic raising to increase foraging space for wading birds which, in combination with habitat enhancement, can improve quality of feeding, ameliorating the loss of habitat. Salt marsh creation is also beneficial to support wildlife and offset habitat loss.

Preventing the recession of salt marshes: A benefit of reducing the tidal range, current speeds and wave heights will be to reduce the current progressive recession of salt marshes and thus bird foraging around the perimeter of the estuary. This was demonstrated in recent geomorphological studies for Welsh Water to be around 1m per year over the past 120 years.

Proposed compensation for residual loss of intertidal habitat: It will not be possible to retain the entire intertidal habitat that currently exists in the Severn estuary, with or without a barrage. Therefore, following mitigation works, and in order to offset this loss, it will be necessary to create compensatory habitat for the residual losses (which includes improvements to habitats elsewhere).

26. The barrage will create a number of opportunities:

Changed sediment characteristics, resulting from decreased turbidity upstream of the barrage, decreased erosion and increased deposition of fine sediment.

Reduced turbidity will increase light penetration and photosynthesis and result in an increase in biological productivity.

Higher invertebrate densities, greater fish populations and better opportunities for birds to feed as a result of probable increases in water temperatures.

Improved habitats such as salt marshes, although changes in the tidal range may affect the balance of the bird species in the estuary.

An increase of life in the estuary facilitated by the consequential increase in dissolved oxygen levels

Support for as many, or even more, wading birds and wildfowl33 than at present, based on comparison with other UK estuaries, even though the species composition might change.

27. The barrage provides the UK with one of the great conservation opportunities. Hafren Power has begun speaking to NGOs and to Swansea University about the potential to create the equivalent of several Newport Wetlands, Slimbridges or Wallasea Islands.

Q4. What lessons can be learned from the successful development of La Rance tidal barrage in France and other tidal power projects?

The La Rance barrage has proved the concept of tidal power. It now generates the cheapest electricity in France at €20 per MWh. Wildlife and fish proliferate around the La Rance barrage and its construction has provided the region with an economic stimulus that is still ongoing after nearly 50 years. Hafren Power will engage with the operator at La Rance to gain full knowledge of the lessons learned and best practice.

28. The Severn barrage has the potential to generate much more electricity than the La Rance barrage. However, La Rance embraces the same fundamental principles as proposed by Hafren Power. La Rance has for 46 years produced cheap, predictable, consistent power (240 MW). It provides the cheapest electricity generated anywhere in France, currently at around €20/MWh. No turbines have needed replacement. Based on the proven experience of La Rance, the Severn barrage should produce very cheap electricity for the nation over many years without significant mechanical problems and without a need to replace turbines regularly. The prime difference between the Severn project and La Rance is the scale of the Severn and the much greater contribution it can make to the UK’s national energy needs.

29. La Rance was constructed using a cofferdam, which involved draining all the water from the basin. Consequently, there was significant impact on wildlife during the three-year build. However, less than a decade later, the estuary was richly diversified, with over 70 fish species, 110 worm species, 47 crustacean species and 120 bird species34. There is even a seal that lives in the basin. As construction took place in the 1960s, it is unclear whether a survey of wildlife was conducted prior to construction. It is therefore difficult to draw definitive rather than anecdotal conclusions.

30. La Rance barrage has become a tourist attraction, with around 50,000 visitors per annum. It has regenerated the surrounding area by providing a steady stimulus, creating new jobs and economic activity in the form of oyster and scallop farming. A new road over the barrage is also a benefit to the local region and in connecting communities.

31. In the case of the Severn, the potential stimulus is very much greater than this. The Hafren Power project will regenerate the whole region of South Wales and South West England. It is likely to attract many more tourists than La Rance, as it would be on the scale of the Øresund Bridge or Millau Viaduct. Upstream, calmer and clearer waters will provide the right conditions for the development of a marina-driven tourist industry, previously impossible in the Severn’s fierce tides and currents. The construction of the barrage and its supply chain will provide a major increase in regional and national employment. The creation of two large turbine manufacturing plants for the manufacture, assembly and maintenance of the installed equipment, one in Port Talbot and one in the Bristol area, will lay the foundation for a new export-led industry. As has been the case at La Rance, the stimulus will therefore carry on beyond the construction of the barrage itself.

32. There are other examples of tidal barrage projects around the world. The Cardiff Bay barrage, completed in 1999, provides further solid evidence of the positive regenerative outcome which could be expected. The Sidney A. Murray Jr barrage at Vidalia on the Mississippi, built in 1989, has produced similar results to La Rance. The recently constructed Sihwa Tidal barrage Scheme in South Korea has addressed similar issues to the Severn barrage. Hafren Power is learning as much as it can from these barrage projects, has consulted with all the leading turbine manufacturers and scheme designers, and will seek to incorporate their best practices into its design.

Q5. 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?

The construction of the barrage will provide a major opportunity to increase employment in the region and to create a new UK based renewable technology. Some local communities will be affected during construction, but Hafren Power will consult with all stakeholders to keep disruption to a minimum. During construction of the barrage, all significant ports in the region will be kept very busy. All ports upstream will be able to continue their businesses, as today, both during and after construction of the barrage.

33. Hafren Power estimates that 20,70035 direct jobs will be created in South Wales and South West England over the ten years of its construction. These will be supplemented by a further 30,000 indirect and induced jobs36. The influx of material in the shape of hard rock, cement, sand and other construction material is likely to create much increased activity in all the ports in the region, especially in Bristol, Cardiff and Port Talbot. The ports will also have a major role in supporting the extensive maritime fleet that will be utilised during construction and, afterwards, in servicing and maintenance. The increased activity that will result is likely to provide a substantial new impetus not only in each of these cities but also to the economy of the region. According to a study commissioned by the UK Contractors Group37, every £1 spent on construction output generates a total of £2.84 economic activity, i.e. GDP increase. Once the barrage is completed, there will be a permanent staff of around 1,000 working on the barrage alone—24 hours a day, 365 days a year. It is highly likely that, as with La Rance, the general stimulus in the region over 10 years, combined with the tourist opportunities and enhanced local infrastructure, will result in a permanent upswing in economic activity there. Hafren Power will offer opportunities for many local companies and small and medium-sized enterprises to work in the supply chain.

34. The barrage will consist of an 18km line of large caissons (approx. 75m x 50m x 30m). These caissons will be constructed in specialised casting basins, most likely in Port Talbot. It is intended to create two manufacturing plants, one in Wales and the other in the Bristol area for the assembly and maintenance of 1,026 turbines. Additionally there will be many further job opportunities in areas such as concrete/cement manufacture, mechanical, civil and electrical engineering, turbine manufacture and maintenance, environment management, project management/supervisory, managerial and administration.

35. It is Hafren Power’s intention to work with local partners in the South West and South Wales to offer civil and mechanical engineering training and apprenticeship schemes and, if necessary, to open its own training centre. The barrage team intends to work closely with local employment and skills schemes and colleges, not only for the supply of trained staff for the project, but also to make the technology exportable thereafter, potentially creating new longer-term job opportunities for those with specialist skills.

36. More generally, the barrage will make the estuary a safer and more attractive place to live by calming conditions upstream. The creation of a new maritime recreational activity—in an area at high tide of 500km², equivalent to 1.5 times the size of Lake Garda—will clearly create jobs in tourism. The precedent of the Cardiff Bay barrage is a good indicator of the regeneration and development potential and the associated employment and community benefits that come with it. The challenge would be to realise this opportunity.

37. There will be locks in the barrage to allow all current shipping movements. There should be minimum delay to shipping, which anyway already has to wait to move upstream for an appropriate tide. The estuary will be dredged to ensure shipping lanes are kept open with minimal inconvenience to navigation. Hafren Power intends to minimise any impact on current business at ports upstream.

38. The barrage may help regenerate fishing in the area as has happened in La Rance. The increased photosynthesis and nutrients in the waters upstream of the barrage could stimulate to the creation of new mollusc and fish farming industries.

39. Hafren Power is in discussion with The Crown Estate over long-term lease of the sea bed and the need for aggregate and sand. The Crown Estate has the remit to maintain and increase the value of its assets including the UK coastal areas. The barrage has the opportunity to support these objectives, as it will need their aggregate from the estuary to construct the barrage and create new wetland areas.

40. By eliminating the upstream risk of coastal, storm and tidal flooding and the impact of sea level rise, the barrage would increase land and property values in the upstream region, and facilitate inward investment for commercial and industrial development.

41. It is clear that the construction of a barrage of this nature could facilitate the creation of permanent road and rail links. Hafren Power plans to build the barrage as a power station and that is the full extent of the proposal. However, if it is felt desirable, Hafren Power is open to discussion with government and other parties over the possibility of road and rail links. It should be noted, however, that a decision on this question would be needed at an early stage since the design of a barrage to carry road and/or rail would differ significantly from a barrage for the generation of electricity only.

Q6. 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?

In common with all other renewables, the project will require support from the Feed-in Tariffs with Contract for Difference (FiT CfD) or Renewables Obligation Certificate (ROC) mechanisms. Importantly, however, it will only require support during the first 30 years of its minimum 120 year life. For at least 90 years thereafter the barrage will generate the cheapest electricity in the UK. Furthermore, the barrage brings the unique opportunity to reduce or eliminate current and anticipated costs of flood defence and damage and related benefits to the nation. As a result, much of the support the barrage receives will be fully mitigated in savings to the nation and the net strike price or net ROC for this project will be significantly reduced. This will dramatically cut the net cost to the nation of support for a Severn barrage.

42. The Severn barrage project requires the passage of a hybrid bill along with an Environmental Impact Assessment (EIA) and supporting documentation. This will require the support of all main parties in Parliament and thorough consultation with all stakeholders.

43. In addition to the hybrid bill, and to provide the necessary confidence for investors, Hafren Power also requires a CfD or ROC mechanism. Hafren Power’s strike price is commercially sensitive and is a matter for negotiation with the government. However, Hafren Power understands the government’s objective is to achieve a net strike price for all renewables of £100/MWh and is working with this figure in mind.

44. Hafren Power believes the barrage’s net strike price will be considerably less than the net strike price of wind and nuclear power, particularly when proper account is taken of the associated flood protection that will be a benefit of the barrage. As mentioned in response to Question 2, the net present value of projected savings are between £2 billion and £15 billion.

45. As mentioned in Question 1, if the Committee on Climate Change’s 2050 target of 50g CO₂/kWh is met, according to DECC’s central forecast for carbon prices38 the value of the barrage’s carbon offset is £2 billion net present value over its life. However, if the target is not met, then this offset will be worth far more.

46. It has become normal for government to assess the cost to the nation of renewable energy over a 30 year period. This is appropriate for comparing renewables for which 30 years is at, or close to, the life of the generating assets. However, it is inappropriate for the barrage, for which one of its many virtues is it longevity. After the initial period of support, the barrage will generate very cheap electricity—the cheapest in the land by far—for a period of at least 90 years. This important factor should be taken into account whenever the question of the cost of support for the barrage is under consideration or comparisons are made between support for the barrages and support for other forms of generation. Net strike price alone does not take account of the longevity of generating assets. Consideration should be given to the adoption of levelised cost (see Figure 2) as a better measure of the relative cost to the nation of support for different forms of generation or, at least, levelised cost should be taken into account at the same time as net strike price.

Q7. How does the company plan to engage and consult the community in the development of the project?

Hafren Power and its delivery team has wide experience of the consultation process required for major infrastructure projects of this kind.

47. Hafren Power is already consulting interested stakeholders and is committed to continuing to do so. This project can only succeed with full consultation of all interested parties. Hafren Power will continue to work with governments, politicians, local authorities, unions, non-governmental organisations, charities and environmental groups as it seeks to get a full picture of the views of all stakeholders.

48. Hafren Power has already set up both a Regional Committee and an Expert Panel with distinguished members to ensure that it is always available for consultation. The members of both, as well as the board of directors, are appended to this submission (Appendix items 3, 4 and 5).

49. In addition, Hafren Power has appointed the independent engineering firm Arup as the lead engineering and technical consultant. Arup has considerable experience of community engagement and consultations from other major UK infrastructure projects, fully recognising the need to properly set out and explain the project scope, inherent benefits, possible disbenefits and the opportunities to mitigate these, in order to enable a balanced informed debate that can seek to achieve “win:win” outcomes. It is recognised that this needs to properly distinguish between the three stages of (a) planning uncertainty and planning “blight” prior to the consenting of major infrastructure, (b) consequences of construction activities during the project delivery, and (c) the long term aspects associated with the completed and operational barrage.

50. Arup is able to bring experience in these processes from other major infrastructure projects and their associated regeneration opportunities, including the Channel Tunnel Rail Link (now known as HS1) and St Pancras station London, London 2012 Olympics and Stratford City, New Forth Crossing, Thames Tunnel Tideway London, Hinkley Point C new nuclear, NuGen Cumbria new nuclear and HS2 railway.

Q8. Are the proposals in breach of EU legislation, and if so how will this be addressed?

Hafren Power has already opened discussions with a range of NGOs and intends to meet all appropriate EU legislation in agreement with the relevant UK government departments.

51. The Severn barrage will need to comply with the following EU legislation:

Water Framework Directive (2000/60/EC).

The Floods Directive (2007/60/EC).

The Habitats Directive (92/43/EEC).

The Birds Directive (2009/147/EC).

The Environmental Impact Assessment (EIA) Directive (85/337/EEC as amended by 97/11/EC and 2003/35/EC).

52. The most challenging directives are the Habitats and Birds Directives, since the project is likely to have an impact on a number of European Sites and habitats/species included in Annex I and II of the Habitats Directive and on species of birds included in Annex I of Birds Directive.

53. In order to be fully compliant with the Habitats Directive, the proposal must demonstrate that:

There are no feasible alternative solutions to the project which are less damaging and

It can be carried out for Imperative Reasons of Overriding Public Interest (“IROPI”), including those of a social or economic nature (this may, in circumstances where priority habitat and species are affected, include reasons relating to human health, public safety or beneficial consequences of primary importance to the environment—Regulation 62(2)(a) of the Habitat Regulations 2010, as amended) and

The Member State can take all compensatory measures necessary to ensure that the overall coherence of Natura 200039 is protected. The Member State may need to seek the opinion of the European Commission concerning the project and then shall inform the European Commission of the compensatory measures adopted.

54. Notwithstanding these conditions, Hafren Power has already opened a regular dialogue with a range of environmental NGOs whose interests are potentially affected, in order to listen to their concerns and jointly to reach solutions.

55. Hafren Power intends to conform with all appropriate EU legislation in agreement with the relevant UK government departments. Discussion will be needed to reach agreement on the basis for assessment and demonstration that impacts on intertidal habitat, wintering birds and migratory fish can be fully mitigated, or alternatively that acceptable compensatory measures (either on-site or off-site) can be implemented.

56. Through the EIA process and in agreement with government departments, Hafren Power will ensure compliance with EU legislation. There are precedents of EU developments where similar large scale projects reconcile the three conditions of the Habitats Directive (paragraph 53). See Appendix item 2 for a Case Study of the new port in Granadilla, Tenerife illustrating the approach to compliance adopted in one instance.

57. Under the EU Habitats Directives and application of IROPI, the question has to be asked: “Are there other better or more viable marine energy technologies which would be preferable to the Hafren Power barrage and which would provide the same energy at less environmental cost?” The following issues and options are therefore considered:

Barrage: It would, at an output of 16.5 TWh per year, provide, by a very large margin, the most efficient and cost effective means of exploiting the extraordinary power and tidal range of the Severn estuary. It would form a core energy capture system for the Severn yielding far and away the highest output for that location. It could and should be integrated with follow-on systems which are in the course of development, including large scale low velocity tidal stream and off-shore wave, as well as off-shore wind, all in the outer approaches of the Bristol Channel and around its headlands, as appropriate.

Lagoons: All options and combinations would cost proportionately more to build and yield less energy. The highest output within the area enclosed by the Cardiff-Weston alignment would be from 3 Russell lagoons yielding only 6.45 TWh/y40. They would provide only very limited protection against sea level rise and cause significant habitat and tidal current impacts. Because there are no operational lagoons, it is uncertain how much electricity they would actually produce. For the same reason, it is also difficult to estimate how much they would cost to construct. The only lagoon options considered viable would be a Bridgwater Bay impoundment as an adjunct to the barrage. It is estimated that this would yield a further approx. Five TWh/y and as mentioned in Question 2, it would protect the vulnerable Somerset coastline. 

Tidal Reef: This is a low level barrage without the lock enclosure. As a result it would not remotely exploit the tidal range effectively, nor approach a similar energy output, nor could it provide protection against sea level rises and storm surges in the estuary which would be provided by the Barrage.

Tidal Fence: Current analysis41 shows that for a tidal fence in the absence of a shipping lock, a “tidal head” would not be achievable. The very considerable leakage of the tide through the shipping gap would entirely waste the tidal range resource of the Severn. The Sustainable Development Commission in 2007 estimated only 0.88 TWh/y output would be achievable (approximately one twentieth the output of the barrage), and this was confirmed in the Giles et al study (2010). It would also fail to provide protection against sea-level rise, storm surges and flooding upstream, because no shipping lock is included, and could lead to accelerated currents through the lock opening.

Q9. Are any other proposals for tidal power projects in the Severn estuary currently under consideration?

To Hafren Power’s knowledge, there are no viable alternatives of a similar scale to the barrage proposal. There is a place for different marine technologies to harness tidal, wind and wave power but nothing which remotely harnesses the potential energy of the Severn’s tidal range like Hafren Power’s proposal. Hafren Power’s barrage and these other schemes are not mutually exclusive.

58. Two additional proposals for tidal power generation in the Severn estuary have been put forward since the DECC feasibility studies. These include:

Stepping Stones Tidal Lagoons (Parsons Brinckerhoff and Black & Veatch)

59. The Stepping Stones tidal lagoon has been designed as the first step in an incremental approach to a large-scale tidal power generation project in the Severn estuary. It is a proposal for a small scale demonstration project between Barry and Aberthaw which aims to demonstrate that tidal power can be harnessed with acceptable costs and environmental impacts. The location of the lagoon has been chosen to ensure that it does not compromise the future development of large-scale tidal power in the Severn estuary.

60. The tidal lagoon proposal is significantly smaller, producing 600 MW and 1.2 TWh of electricity per annum at a net strike price of £194/MWh42. In comparison, Hafren Power’s proposal is to produce 6,464 MW and 16.5 TWh of electricity per annum. 

Tidal Lagoon Swansea Bay (Tidal Lagoon Swansea Bay Ltd)

61. The Swansea Bay Tidal Lagoon is the proposal for a 250–350 MW tidal lagoon, capable of generating 0.4 TWh/year. The lagoon is located around the Swansea Bay Port where there are shallower water depths between the navigation channels for the Swansea and Neath Ports and away from the Swansea Bay designated bathing beaches.

62. Tidal Lagoon Swansea Bay Ltd has recently submitted a scoping report to the Planning Inspectorate. The cost of the scheme is currently unknown.

63. The lagoon and barrage proposals are not mutually exclusive. Looked at pragmatically, the UK may need many technologies, strategically placed in their most viable and appropriate locations, if it is effectively to utilise the marine energy resources with which this island is blessed. There is a place for each technology—off-shore wave farms, major tidal stream arrays, strategic coastally attached and off-shore lagoons, and tidal range barrages, such as the one Hafren Power is proposing.

Q10. What could be the wider international implications of the scheme for UK engineering and UK low-carbon industry?

Hafren Power’s barrage would be an exemplar project and would firmly place the UK at the forefront of tidal range technology that can be applied globally, there being locations around the world (as well as in the UK) which could replicate Hafren Power’s plans.

64. The creation of the barrage and its associated low-head turbine technologies has the ability to make the UK the global centre of excellence for such large-scale barrages. There are other locations globally where such barrages could be built and the implications for British skills and opportunities are clear. Just as there are other estuaries with high tidal ranges, so the changing climate will encourage both the adoption of low-carbon energy schemes and the protection of estuarial habitats and environments.

65. The technology developed for the barrage would be exportable. The turbines, for example, will be a new development of bi-directional VLH turbines and would be suitable for a number of similar sites around the world. In addition, there would be other spin-off low carbon technologies which would be developed including control systems for managing the generating regime to cause the least environmental damage as well as for interfacing with the remainder of the National Grid.

66. With the development of new low-carbon technologies, the reputation of the region’s universities and other supporting research institutions would be enhanced and so be able to attract more overseas students and research fellows and provide opportunities for those who study in these new fields to transfer their knowledge to other institutions around the world.

67. Working with local partners in the South West and South Wales, Hafren Power will offer civil and mechanical engineering training and apprenticeship schemes which will create opportunities for the development of skill sets which are exportable thereafter. This will create the potential for new longer-term job opportunities for those acquiring these specialist skills and expertise, which are not only transferable and exportable, but should also underpin the creation of a whole new UK skill-set at the forefront of global barrage/low-carbon electricity generation.

68. The barrage will provide the opportunity to revitalise the manufacturing skill base around the region further to enhance the potential for inward investment.

69. The barrage presents a transformative growth opportunity for the UK, concentrated in South Wales and the South West of England. New jobs will be created in exportable industries. Flood defence will open up previously unusable land to development. The clearer and calmer waters will stimulate tourism and resettlement.

Appendix Item 1: Supplementary information on flooding

Existing Flood Protection

70. The Environment Agency’s tidal flood zone for the Severn estuary is 530km² of tidal floodplain. This area covers the Severn estuary coastline between Lavernock Point, up to Gloucester and back down to Hinkley Point. These areas are currently at risk, not only from regular tidal flooding—especially as sea levels rise—but also from storm surges coming up the Severn estuary, in particular if coinciding with spring tides. Protection is currently provided by a series of artificial and natural flood defences, but rising sea levels as a result of climate change mean that these will need to be augmented progressively over the next few years (The Severn Estuary Shoreline Management Plan Review (SMP2) explores this in detail43).

71. On the Welsh side of the estuary, the main flood risk areas are from Cardiff to Newport. On the English side, the most heavily affected areas are from the Somerset Levels to Gloucester. The Department of Energy and Climate Change (DECC)44 noted that the flood risk areas includes some 80,000 residential and 10,000 non-residential properties as well as transport arteries, other infrastructure, agriculture and amenity land. These areas are at risk of flooding and also include the M4 and M5 motorway network and the rail network.

Modelling

Previous Studies

72. There have been four previous studies which have examined the effects of the Severn barrage on flood risk. The scope of these studies and the risks and opportunities identified in the studies are summarised below:

	Scope	Risks	Opportunities
Sustainable Development Commission, 200745	The study aimed to predict the impacts of the Cardiff-Weston (Ebb only generation) on flood risk.	Potential decreases in flood risk downstream of the barrage due to a decrease in high water. The potential increase in flood risk upstream if intertidal areas are deprived of sediment supplies. The potential increase in flood risk if raised water levels upstream of the barrier impeded existing land drainage. The mitigation costs were estimated as between £24.5 million and £61.9 million at 2006 prices.	Reductions in high water levels (0.5 to 1m) and therefore flood risk upstream of the barrage. Protection to upstream areas from high water levels generated by surges (up to 2m). The ability to adjust barrage operation to assist in managing the occurrence of high tides and high freshwater events.
DECC, 200846	This study aimed to predict the effect of a small, medium and large barrage on the tidal regime in the Severn estuary. The findings of the report were based on the modelled outputs from the 1980s studies and the Defra predictions for sea level rise.	Raised low water levels could make maintenance of some structure more difficult. In addition to outfalls the barrage could also impact on surface water outfalls, highway drainage and combined sewer overflows	Changes in wave and tide patterns would increase flood risk in some locations and reduce it in others, but overall there would be a net benefit, especially under high sea level rise scenarios.
Liverpool University, School of Engineering, 201047	The University of Liverpool have carried out modelling to determine the combined effect of barrages on the North West estuaries acting in combination with a barrage on the Severn. The addition of five barrages within the Solway Firth, Morecambe Bay, Mersey, Dee and Severn estuaries was simulated.	The primary impact of the barrages is the increased flooding risk, due to the increase in tidal amplitude of 0.15m to 0.20m along the east coast of Ireland and Northern Ireland.	The tides in the Bristol Channel are reduced in amplitude and this may help reduce storm surge flooding risks in this area.
DECC, 201048	The study looked at the impact of the Cardiff-Weston barrage in Ebb-Flood and Ebb only modes.	The Ebb-Flood mode increases the far-field water levels by up to 30cm in the Bristol Channel and up to 10cm on the East Coast of Ireland.	The Ebb-flood mode of operation will reduce the flood risk upstream of the barrage through lowering of the high water level by up to 1.5m. The Ebb-Flood mode reduces the risk of tide-locking of tidal outfalls compared to the Ebb only scheme.

Hafren Power Studies

Scope

73. A numerical model has been created to assess the energy available for the Business Case for the Severn barrage and to understand the effects of the barrage on both the upstream and far-field water levels. The model is a state-of-the-art 2D flexible mesh hydrodynamic model, based on the Mike suite of modelling software49. The model covers the area from Frampton (on the River Severn) to open offshore boundaries that extend from Cape Cornwall (Cornwall) to Cobh (Republic of Ireland), and from Ramsey Sound (Wales) to Rosslare (Republic of Ireland).

74. The model was run for five scenarios: existing conditions, barrage with bulb turbines operating in Ebb only generation mode, barrage with bulb turbines operating in Ebb-Flood generation mode, barrage with bi-directional turbines operating in Ebb only generation mode and barrage with bi-directional turbines operating in Ebb-Flood generation mode.

Results

75. The modelling undertaken for Hafren Power confirms the earlier studies on power generation. It also gives indications on how the barrage will act to reduce upstream tidal range by reducing high water levels and raising low water levels.

76. The findings from the modelling to date are:

That there is no significant change to water levels outside the Bristol Channel viz. off the coast of Ireland or off the West coast of Wales. This differs from the finding in earlier DECC Study50 since the model boundaries have now been taken out beyond Ireland and the Continental Shelf around the UK thus giving better representation of the “far field” effects.

That there is about a 20cm level increase within the Bristol Channel west of the barrage in the area around Swansea. This requires further modeling and, in particular, refining the way in which the boundary conditions for the more detailed modeling within the estuary have been set up and this is expected to reduce these observed level increases.

That the water levels to the east of the barrage (upstream) will reduce. Present modeling suggests that this reduction could be of the order of 2m for Spring tides. This tallies with “broad brush” calculations for the amount of energy that can be produced from the observed head difference (or difference in elevation) between the water levels on either side of the barrage.

Verification

77. A further independent model has also been built by Cardiff University, as part of the research being undertaken by Professors Roger Falconer and Binliang Lin with the Low Carbon Research Institute, which gives a comparison with the results of the numerical model for Hafren Power. Initial results show general agreement between the two modelling approaches which gives confidence in the results, although both remain subject to further development and validation in future stages of the design of the barrage.

Appendix Item 2: New Port in Granadilla, Tenerife, Canary Islands

The Project

78. The reasons for the proposals are: existing port facilities in Santa Cruz are inadequate and that new facilities with increased capacity should be developed to respond to projected increase in maritime traffic.

79. The project foresees the construction of a 650m long container terminal covering 26ha, a 200m dock for general goods with an annexed 5.7ha area and a 19.5ha trading harbour area for raw materials traffic.

80. The port works are made up of a main breakwater of 2,557m length going down to 55m seabed depth and a total land filling of 786,000m² by using 12m m³ of quarry material. The new harbour will dispose of a contiguous terrestrial area with 12.4ha for the development of logistic activities and an area with 15ha for the installation of a natural gas plant.

The NATURA 2000 Network

81. The Natura 2000 sites involved are “Sebadales del Sur de Tenerife” (ES7020116) and “Montaña Roja” (ES7020049). The site hosts a habitat type “1110 Sandbanks which are slightly covered by sea water all the time “(Listed in annex I of Council Directive 92/43/EEC) and a habitat required for the conservation of the priority species *Caretta caretta 2 (loggerhead turtle).

82. The site “Montaña Roja” is one of the sites hosting a priority habitat type-” 2130* Fixed coastal dunes with herbaceous vegetation (grey dunes”).

83. In addition, the species Atractylis preauxiana (a species of plant endemic to the Canary islands) and priority species Caretta caretta, included in Annexes II and IV of the Habitats Directive, are also affected by the project.

Environmental impacts

84. The most significant environmental impact on the new port will result from the disruption of natural patterns of sand removal and deposition. Under natural conditions, submarine sand covering the seabed near the coastline is progressively displaced from NE to SW due to the main water stream flow. The port project will interrupt this natural sand flow and this in turn will result in erosion of the sea-bed further down the coast. In order to mitigate this, the Spanish authorities have proposed a new “North South sand bypass in the Granadilla harbour”. This proposal provides for pumping machinery and associated pipe work to take all the sand deposited on the north-side of the new port and to pump it to the southern end of the port. Wind turbines built in the project area would produce the necessary electricity for powering the system.

Alternative solutions

85. There are no alternative solutions: regarding the possible alternatives to Granadilla as site for the new port, the Commission has assessed the authorities’ opinion that Granadilla is the only appropriate site for the new port in Tenerife. This opinion is based on different technical reasons that have to be considered when identifying a site for the construction of a new port.

Imperative reasons of overriding public interest (“IROPI”)

86. As the main purpose of project is not concerned with improvements to human health or public safety and nor is it expected to have any beneficial consequences of primary benefit to the environment, justification for the projects should be based on “other imperative reasons of overriding public interest.” and the Commission should give its opinion on these considerations (Article 6.4 Habitats Directive).

87. The new port is expected to generate a sound economic rate of return and it will also provide the island with the possibility of attracting international container transhipment traffic. The Commission recognises that there is a demonstrated need to increase and develop port capacity in order to promote economic and social development in the island of Tenerife and the surrounding region, therefore an IROPI exists.

Proposed Compensatory Measures

88. A set of necessary compensatory measures have been proposed that are specifically related to the effects of the species and the integrity of the sites. The Commission considers the proposed compensatory measures are adequate if they are executed in a timely manner and requests annual reports on the implementation of the project and on the results of the implementation of proposed compensatory measures.

89. To ensure that the Granadilla port is built and managed in an environmentally sensitive manner, and independent and permanent foundation will be set up before the construction works are started. The role of this foundation will be to monitor the status and trends in local biodiversity as well as ensuring that mitigation and compensation measures are carried out properly.

90. The compensatory measures proposed for the effects on the populations of the species Atractilys preauxiana listed in Annex II and IV of Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora are:

Designation of a new site of community importance for the protection of the populations detected in the area of the industrial park of Granadilla. The total area of this new SCI will be 0.93 hectares. In addition, it is proposed that this area would serve as a donor for the restoration of southern areas where these subpopulations have disappeared (species reintroduction in SCI “Montaña Roja”)

91. The compensatory measures proposed for the effects on the natural habitat of Community interest 1110 “Sandbanks which are slightly covered by sea water all the time” in the SCI “Sebadales del Sur” are:

Designation of two new sites of community importance hosting areas of sandbanks which are slightly covered by sea water all the time (habitat type 1110): Antequera (Tenerife island), total surface 272.61ha; and Güi Güi (Gran Canaria island), total surface 7.219.74ha.

92. The compensatory measures proposed for the effects on Caretta caretta are:

Any effects on the priority species Caretta caretta, due to impacts on the habitat required for its conservation, would be compensated through the above-mentioned measures.

93. In addition to the above compensatory measures, the foundation will establish and carry out a monitoring programme to assess the conservation status of this species’ population in the Canary Islands, as requested by article 11 of the 92/43 Habitats Directive. Methods and conclusions drawn out by the LIFE project B4–3200/97/247 will be considered by the foundation when establishing the above monitoring programme.

94. The compensatory measures proposed for the Site of Community Interest ES7020049 “Montaña Roja” are:

Implementation of the restoration project on the SCI “Montaña Roja” for re-establishing a favourable conservation status. This measure implies enhancing the conservation status and will allow a significant increase of the area covered by the habitat type “Fixed coastal dunes with herbaceous vegetation (grey dunes)” within the site.

Opinion of the Commission

95. The Commission holds the view that the new port of Granadilla project can be executed for reasons of overriding public interest on the condition that all necessary compensatory measures to ensure overall protection of the coherence of Natura 2000 can be taken in good time.

Appendix Item 3: Hafren Power—Board of Directors

Gregory Shenkman
Chairman

Greg has almost 40 years’ experience in international finance. He has held senior positions with several leading investment banks, including Rothschild, Kleinwort Benson and Swiss Bank Corporation (now UBS). Most recently, he was a Global Partner and Managing Director with Rothschild, where he was responsible for the Asian investment banking and other businesses from 2000 to 2004. Greg holds several directorships in both public and private companies.

Anthony Pryor CBE
BA, FICE, MInst RE
Chief Executive

Tony was non-executive Chairman of Halcrow group from 2007 to 2012. Before this, he spent 30 years in the defence industry and until 2005 was Chief Operating Officer of Kellogg Brown and Root (UK). He was Chairman of Devonport Royal Dockyard from 1997 to 2006. Tony has considerable experience and knowledge of public-private partnerships, and is renowned for his work in the defence and nuclear sectors.

Julia Barfield OBE
Non-Executive Director

Julia is an award-winning architect. Her firm, Marks Barfield Architects, conceived and designed the landmark London Eye, the UK’s most popular paid-for attraction. Marks Barfield will design the Hafren Power Severn barrage. Following appointments with Richard Rogers Partnership and Foster Associates, Julia established Marks Barfield in 1989.

Richard Bazley
Executive Director

Richard is the visionary behind the Hafren Power Severn barrage. He has devoted the past seven years to making his idea of a privately financed barrage a reality. An entrepreneur over some 50 years, with numerous commercial property companies and financial institutions, Richard began his career as an economist and valuer with HMRC.

Professor Christopher Fleming
FREng
Non-Executive Director

Chris is a Fellow of the Royal Academy of Engineering. He was a Board director of Halcrow Group until 2007, concluding a 40 year association with the organisation, and was previously CEO of Halcrow Maritime. Chris was closely involved in previous Severn barrage proposals and is Visiting Professor of Coastal Engineering at Plymouth University.

Joseph Hannah
Non-Executive Director

Joseph is an international lawyer who in 1997 established the firm Hannah & Mould. The partnership specialises in infrastructure and energy projects, with expertise in project finance and contract drafting, and energy and construction litigation and arbitration, both in the UK and internationally.

Lord Rowe-Beddoe
Non-Executive Director

David is a life peer and a crossbench member of the House of Lords. He was CEO of Thomas De La Rue and De La Rue plc, Revlon Inc. and Morgan Stanley/GFTA and was knighted in 2000 for services to industry and economic development. He was Chairman of the Welsh Development Agency (WDA) from 1993 to 2002 and is currently Deputy Chair of the UK Statistics Authority. In 2005, he received the Beacon Prize for his contribution to the economic and social development of Wales.

Appendix Item 4: Expert Panel

Professor Chris Binnie
FREng
Environment and Engineering

Chris also sits on the Regional Committee. His CV can be found in “Appendix Item 4: Regional Committee”.

Professor Roger Falconer
FREng
Environment and Engineering

Roger also sits on the Regional Committee. His CV can be found in “Appendix Item 4: Regional Committee”.

Professor Christopher Fleming
FREng
Environment and Engineering

Chris also sits on Hafren Power’s Board. His CV can be found in “Appendix Item 2: Hafren Power—Board of Directors”.

Rt Hon Peter Hain MP
Politics

Peter is a British Labour Party politician and campaigner. He has been the Member of Parliament for Neath since 1991 and served in the Cabinets of both Tony Blair and Gordon Brown, as Secretary of State for Work and Pensions, Northern Ireland, Wales and Leader of the House of Commons. He was also Energy Minister, Foreign Office Minister and Europe Minister. Peter rose to prominence for his Anti-Apartheid campaigning and in 1969–70 was Chairman of the Stop The Seventy Tour Campaign.

Professor Brian Morgan
Economics

Brian also sits on the Regional Committee. His CV can be found in “Appendix Item 4: Regional Committee”.

Stephen Prendergast
Project management

Stephen is a global turnaround and infrastructure director who has delivered value on some of the largest projects in the world whilst managing multi-billion pound budgets. He has more than 20 years’ international experience operating at Group Executive Board level with Voith Hydro Far East, Amec and Costain in sectors including oil and gas, power and water. Stephen is a Chartered and European registered engineer and a member of UKTI advisory team on infrastructure. He has specific experience in “Run of River” power stations in the US and China and building the largest caissons in the world in Mexico.

Michael Prideaux
Public relations

Michael began his career in public relations 33 years ago at the Financial Times, where he was UK Advertisement Director until 1983. From 1983 to 1989 he was Chief Executive and Board director of Charles Barker plc. For the next 23 years, he worked for B.A.T. Industries plc as Director of Group Public Affairs until 1998 and then as Corporate and Regulatory Affairs Director for British American Tobacco plc until 2012.

Jonathon Porritt CBE
Environment

Jonathon has been involved with environmental issues for almost 40 years. From 1984 to 1991, he was Director of Friends of the Earth. In 1996, he set up Forum for the Future, which is now the UK’s leading sustainable development charity. Jonathon is Co-Director of the Prince of Wales’ Business & Sustainability Programme, and was Chair of the UK Sustainable Development Commission between 2000 and 2009.

Archibald Walker MBE
Engineering

Archie has worked for over 40 years in large engineering construction. He has been responsible for the construction of over 15 oil and gas offshore structures worldwide and for over 80 projects as Head of Construction at a nuclear establishment. He was Project Construction Director for the Devonport Vanguard Facility Upgrade, a seven-year project, which was completed on time. Recently, he was Vice President for KBR responsible for the construction and installation of defence programmes in the UK and Iraq. Over the past year, Archie has advised Halcrow on construction issues relating to the Severn barrage.

Appendix Item 5: Regional Committee

Dr Elizabeth Haywood
Chairman

Elizabeth has worked in both the private and public sector in Wales, England and internationally. She is a former Director of CBI Wales, and has experience in the transport sector and economic development. She runs her own business and holds a number of non-executive positions. Elizabeth won the Welsh Woman of the Year Award in 1994 and in 2012 chaired the Ministerial Advisory Group on City Regions in Wales.

Idwal Stedman
Executive

Idwal is one of the founders of this project. He ran a highly regarded architecture firm whose clients included Boots PLC, Mercedes Benz and Gwent Europark. He now devotes all his time to the barrage project. He graduated from the Welsh School of Architecture with first class honours and is a Welsh speaker. Bydd gan y morglawdd hawliau porthmyn a bydd gan wartheg Idwal y rhyddid i groesi fel y mynnant.

Professor Chris Binnie
FREng
Member

Chris is an expert in water, engineering, dams and flooding. For 17 years, he was Head of Water Consultancy at Atkins plc. He has been an expert witness to Parliamentary Committees, Competition Commissions and Public Inquiries, amongst others. He was Chairman of the Independent Engineering and Technical Expert Panel, appointed by DECC, for the Severn Tidal Power studies. He is a visiting Professor at Exeter University. Chris is a fellow of the Institution of Civil Engineers, past President of the Chartered Institution of Water & Environmental Management, and Fellow of the Royal Academy of Engineering.

Professor Roger Falconer
FREng
Member

Roger is a Fellow of the Royal Academy of Engineering, a Chartered Engineer and a Chartered Environmentalist. He is Professor of Water Management at Cardiff University and has over 35 years’ applied research experience into modelling coastal, estuarine and river basin processes. He has published and presented extensively in the field, including on the Severn estuary and Severn barrage. Roger’s models have also been used in over 100 EIA studies world-wide.

Professor Brian Morgan
Member

Brian is an experienced economist. He has worked extensively in Whitehall, the EU and OECD and is currently Professor of Entrepreneurship at Cardiff Metropolitan University. His research focuses on the economic impact of renewable energy technologies and their contribution to regional development. Outside academia, he has been Chief Economist at the Welsh Development Agency and is currently a director of a number of businesses in Wales.

Jeremy Pakenham
Member

Jeremy is a former partner of PriceWaterhouseCoopers Management Consultancy, where he was responsible for the firm’s Worldwide Energy Consulting practice. Prior to joining Price Waterhouse in 1984, he had ten years’ experience in senior financial and general business line management in the West of England. Since retirement in 2005, Jeremy has been engaged in a number of consulting roles in the energy, fossil fuel and renewables sectors in the UK and Europe.

Jill Shortland OBE
Member

Jill is a consultant specialising in advice and liaison services in relation to Local Government and owns her own consultancy company. She works with local communities, councils, and national and local development teams. During her 22 years in local government, she has held lead positions in her Town, District and County Councils and was Chairman of the South West Regional Assembly. Alongside running her business, Jill is currently the Vice Chairman of the Local Government Association’s Improvement Board and the Chairman of the LGA Liberal Democrat Group.

December 2012