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Clause 14 [Nationally significant infrastructure projects: general]:

The Duke of Montrose moved Amendment No. 52:

52: Clause 14, page 7, line 38, leave out “above ground”

The noble Duke said: My Lords, the purpose of my amendment is to determine whether it is the Government’s intention that all necessary alternatives for electric lines are clearly within the powers of the Infrastructure Planning Commission.

I realise that to be an effective amendment, further consequential points would be required. It may be that the Minister has an argument that the phrase,

“an electric line above ground”,

can comprehend all sorts of other electric lines without my amendment, but that is not clear to the ordinary member of the public.

There are already certain forms of transmission that are outside the strict description in the Bill, such as electric lines underground or electric lines under territorial waters. Clause 16, which is devoted to electric lines, has a very useful stipulation that the Government wish only to include lines of more than 132 kilovolts. There may be practical limits on installing electric lines underground or under the sea, and there may be voltage limits; I am certainly not in a position to go into the technical limitations on these matters.

As noble Lords will be aware, developments of this kind in Scotland are the responsibility of the Scottish Administration. By way of illustration, I use the Scottish plan for a 400 kilovolt line from Beauly to Denny, which is presently under consideration. A number of arguments are being put forward that sections of that line should be put underground. If that is approved, it will still be a consideration for the Infrastructure Planning Commission, operating throughout England and Wales, that the same issue might arise. I am not sure whether that would be a possibility for consideration by the Infrastructure Planning Commission.

I thank the Minister for the assistance of his department on the question of undersea cables. It suggested that rather than coming under planning legislation, undersea cables might be dealt with under Section 36 of the Electricity Act 1989. At present, the Bill looks as if the national policy statement, and even the Infrastructure Planning Commission, will have no role in saying whether offshore interconnectors might be part of the plan.

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Many noble Lords will, like me, have received a paper from Ofgem entitled Connecting Renewable Generation, which lays down the considerable difficulties faced regarding the structure and capacity of the grid to take on renewable energy on the scale that will be required to meet our EU target of 15 per cent renewables by 2020. Ofgem estimates that this will require 37 gigawatts. Given that renewable energy is seen as highly intermittent, it will be even more important that the largest possible adequate grid is available, so that periods of shortfall from the area which is supplying renewable energy can be compensated for from other parts.

Surely it must be a worry for Ofgem, which has a statutory responsibility for security of supply, if the Infrastructure Planning Commission is looking only at the structure of the national grid where it is composed of overhead wires. Ofgem will already have to cope with a divided responsibility, whereby it would have to reach agreement with the Scottish Executive on construction of overhead lines to ensure continuity of supply, or that the renewable target is met, if renewable generation from Scotland were not immediately available.

The powers that would be required to lay cables inland or inside the 12-mile limit are fully exercisable by the Scottish Executive, as are the interconnectors. This will presumably be of vital significance if renewable energy from the north of Scotland is to be carried by cables off the western or eastern coasts, particularly if they are within the 12-mile limit, because the Infrastructure Planning Commission will be a great deal short of the distance required to make the connections.

Another complication arises for any offshore generating station built north of Berwick—if I may put it that way—whose supply line crosses the border in the remainder of UK waters anywhere between the 12-mile and 200-mile offshore limits. My noble friend Lord Taylor is concerned that offshore generating stations should not come under this legislation at all, but the Bill includes them. Nothing in it considers how the connections will be achieved, particularly if they cross the boundary between the two national authorities.

I have another point which I hope noble Lords will allow me to raise, because it comes almost within the concept of an electric line, although it is not strictly electric—the fibre-optic network, which is increasingly important. Can the Minister say whether the Government envisage that this area might fall within the powers of the Infrastructure Planning Commission? If not, would the Government consider ensuring that an amendment were proposed for our consideration at Third Reading? I beg to move.

Lord Livsey of Talgarth: My Lords, Amendment No. 55 concerns Clause 15, relating to the principles established under Clause 14(1) on,

“the construction or extension of a generating station”.

The amendment refers to page 8, line 41, and proposes to leave out “or Wales”; in other words, the powers of IPC would be restricted to England in this respect. We want legislation in Wales to cover generating stations of more than 50 megawatts; Clause 15(3) refers to

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100 megawatts. This clearly restricts the ability of Wales to influence what the IPC does regarding the expansion of electricity generation in Wales.

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We conclude that the Infrastructure Planning Commission and not the devolved Welsh Assembly will make recommendations and take decisions in Wales. As I have explained, Amendment No. 55 would remove mention of Wales from this clause, and responsibility would then lie within a much more democratically accountable system. The powers would be transferred to the Secretary of State for Wales, who would liaise with the elected Welsh Assembly to produce a fully accountable solution, as opposed to a decision being imposed by an unelected quango from outside Wales. I am sure that the House will recognise that many appointed quangos in Wales have already been abolished by the National Assembly for Wales, and we certainly do not want another one foisted upon us from outside. The National Assembly for Wales Sustainability Committee recently published a report on its scrutiny of the Planning Bill. It concluded:

“The Committee therefore recommends that the Welsh Assembly Government makes representations to the UK Government to exclude Wales from the remit of the Infrastructure Planning Commission, in order to retain democratic accountability in all parts of the planning process in Wales”,

and not only what is referred to in the amendment. There is very strong feeling about this. We recently had not a public demonstration but a demonstration none the less about the gas pipeline which goes straight through the national park from Milford Haven to Gloucester. There was no appeal mechanism; that was the way it went and that was the beginning and end of it.

I do not wish to detain the House too long but I should like to explain the present situation with regard to electricity production in Wales. Briefly, there are 34 terawatt hours in total but electricity usage in Wales is only 24 terawatt hours. Therefore, there is a surplus of 10 terawatt hours, which is consumed over the border. Sources of electricity production in Wales are: gas and coal, 23 terawatt hours; nuclear, 7 terawatt hours; renewables, 1.5 terawatt hours; and pumped storage—mainly the Dinorwig scheme in Snowdonia—2.5 terawatt hours. Clearly, with 23 out of 34 terawatt hours originating from coal and gas, there is considerable scope for a reduction in carbon emissions. Indeed, with coal, that includes carbon capture, and there are still 300 million tonnes of coal under the surface in Wales.

From the point of view of the Assembly and the Government, Wales’s mission is for sustainable development to be mapped out in the Welsh Assembly Government’s policies. However, the Bill currently denies Wales decision-making in relation to a power-generating station of more than 50 megawatts. That just does not add up. The scale of potential renewable energy in Wales is enormous, and, frankly, denying the elected National Assembly for Wales the ability to legislate in this respect is unacceptable.

Potential production in Wales from hydroelectricity, wind and solar, as a replacement for aspects of gas and coal, is enormous. We want a low-carbon economy

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and, moreover, we want the transport infrastructure, including the rail system, to be run on renewable energy. Frankly, the north/south infrastructure in Wales is appalling, being akin to that of a third-world country. I have to tell the House that I can get to Scotland from where I live, just north of the south Wales coalfield, faster than I can get to Anglesey, and that is the situation for many of us in Wales. There is a need for enormous investment. The amendment would prevent the IPC taking a unilateral decision which should be made in Wales. It would give the Secretary of State for Wales, rather than the IPC, the power to make such decisions, which, I am sure the House will agree, is fair, correct and, in the context of climate change, very desirable.

Lord Hunt of Kings Heath: My Lords, this has been an extremely interesting debate, and I shall attempt to answer some of the points made. The noble Duke, the Duke of Montrose, asked about the Bill defining only overhead electricity lines, a point which we debated to a certain extent in Committee. The Bill defines only overhead electricity lines because permitted development rights relate to underground electricity lines. We are not seeking to change that through this Bill. Clause 15 has been drafted to reflect Section 37 of the Electricity Act 1989, which sets out the current regime for electricity line consents.

The noble Duke raised an interesting point about the cost of putting electricity lines underground. As he knows, it is not a simple matter—although, on the face of it, underground lines always seem an attractive option. They can be very expensive and, as I said in Committee, can involve additional environmental and social costs. None the less, it can clearly be an option. Permitted development rights are available, and under Clause 118(1) the IPC can require that sections of a proposed overground electricity line project are constructed underground if there are strong reasons for doing so.

The noble Duke also asked about electricity lines under territorial waters. We will shortly discuss a group of amendments on offshore generators.

The Duke of Montrose: My Lords, it is interesting that overhead lines are exempted from consideration under the Bill if they are less than 132 kilovolts. Is the Minister saying that there is no limit on underground lines and that regardless of the kilovolts any underground line would be a permitted development?

Lord Hunt of Kings Heath: My Lords, underground lines are covered by the permitted development procedure, so it applies to them. Electricity lines under territorial waters are not part of the Bill but they can be consented as part of a nationally significant project such as an offshore wind farm. Permission for electricity lines under the sea is currently granted by the Secretary of State under the Food and Environment Protection Act 1985 and will in future be granted by the marine management organisation, subject to legislation which we all hope to see in your Lordships’ House as quickly as possible.

The noble Duke raised some interesting points on the electricity transmission system in general. We clearly need new investment in the grid infrastructure together

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with changes to the existing access arrangements to support the connection of new renewable and other essential generation. That will help us to meet the UK share of the EU 2020 renewable energy target, which I need not remind noble Lords is extremely challenging. I understand that £560 million has already been committed to upgrading the network in Scotland and the north of England to connect renewable projects. In the recent transmission price control, Ofgem set out plans to invest some £4 billion in the electricity transmission network. In addition, as noble Lords who debated the issue during the passage of the Energy Bill will be aware, in June 2008 the Government and Ofgem set out a package of measures in the transmission access review which, taken together, will remove or significantly reduce grid-related access barriers. We have taken an order-making power in order to intervene if agreement is not reached between Ofgem and the companies concerned.

The noble Duke, the Duke of Montrose, raised a point about decisions on projects in England and Wales that are below 132 kilovolts. These decisions will continue to be taken by the Secretary of State under Section 37 of the Electricity Act subject to certain exceptions. We intend that the decisions will be made with regard to the electricity networks national policy statement. The intent is that the IPC will deal only with electricity lines of national significance. The Government intend to conduct a review of where such cases might best be decided in future. We intend to conduct it over a similar timescale to the review, to which my right honourable friend the Secretary of State, Ms Blears, has committed, to examine whether there is a case for extending the grounds for ministerial intervention in IPC decisions. My understanding is that the review is intended to commence about two years after the IPC has accepted its first application.

I sympathise with the commitment to renewables by the noble Lord, Lord Livsey, and his comments about railway infrastructure in Wales. I use railways in Wales, particularly from Birmingham to Aberystwyth, and I know what he means, but that is perhaps to stray a little from the point of our debate today, although it sets the context. He will not be surprised by my answer because, as was set out in the debates in the other place, the UK Government have taken the view that reserving powers on nationally significant energy infrastructure is the best way of developing the UK’s long-term energy strategy. The planning White Paper made it clear that the current devolution settlement works well, and the Government propose that it should continue. On that basis, the intention is that projects must be included within the IPC’s remit and thus benefit from a quicker and more effective system that improves the ability of individuals and local communities to participate in the process.

I noted carefully the noble Lord’s comments about Welsh confidence in the IPC process. I want to make it clear that, under our proposals, UK Ministers will consult Welsh Ministers in drawing up national policy statements that apply in Wales. This requirement will be imposed by secondary legislation. Welsh Ministers will also be consulted by developers in advance of any consent application and by the IPC during its consideration of any scheme in Wales. As for confidence

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in the IPC process, it is proposed that two or three IPC commissioners will be appointed on the advice of Welsh Ministers where an application to be determined by the IPC relates to land in Wales. Where reasonably practical, at least one of the members of the decision-making body—the panel or, for applications examined by a single commissioner, the council—should be a commissioner nominated by Welsh Ministers. We think that that is the best approach to ensuring consistency with the devolution settlement and sufficient involvement of the Welsh dynamic, if I may put it that way, in the process.

As for the 50 megawatt threshold raised by the noble Lord, it is defined in the Electricity Act 1989 as being the appropriate boundary between national—in other words, England and Wales—and sub-national decision-making, and no case has been brought before us to suggest that we should change the threshold.

4.15 pm

Baroness Carnegy of Lour: My Lords, before the Minister sits down, will he clarify something for me? If a new interconnector was constructed that crossed the border between Scotland and England, under what planning procedure and under which Act would that fall?

Lord Hunt of Kings Heath: My Lords, my understanding—it is complex because it has to be consistent with the devolution settlement—is that overhead line consents between England and Scotland would need to be split at the border. For a 132 kilowatt electricity line project, therefore, the IPC would consider the part in England and Scottish Ministers would consider the part in Scotland under the existing regime. We must hope that, within the context of the devolution settlement, it all works well together.

Lord Howie of Troon: My Lords, I hesitate to intervene before my noble friend sits down, especially on Report, when we should be on our best behaviour, but will he remind the noble Duke, the Duke of Montrose, who made a very interesting and informative contribution to our debates, as he often does, that offshore wind farms produce about 25 per cent of their rated capacity, much of which would be lost in the underwater cables that the noble Duke proposes and that more would be lost when we got to the grid? That suggests that we should not rush too madly into proposing any more offshore wind farms.

Lord Hunt of Kings Heath: My Lords, my noble friend pushes us a little far from our debate. I very much welcome him to our debates; it is very good to see him in his place. Although there are issues about connection, offshore wind has a potential part to play in meeting our renewables target, but not just offshore wind. I am very keen on technology development in wave power and the other marine technology in which this country has a lead. Having seen a prototype model in Lowestoft on Friday, I am especially enthusiastic. We should not underestimate the potential that water, through offshore wind and wave, has to make to meeting our renewables obligation.

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Lord Livsey of Talgarth: My Lords, with the leave of the House, I take note of what the Minister said, but the Electricity Act 1989 is pre-devolution—prehistory as far as the constitution is concerned. We want measures to come from the Welsh Assembly to meet the sustainability targets in Wales. The priorities are different in Wales because, as I explained, there is a surplus of electricity in Wales. We need to convert to lower carbon types of electricity production. Those are our priorities, which are not necessarily those of the IPC in that context.

Lord Bridges: My Lords, can the Minister answer one question on offshore wind that puzzles me? I understand that some proposed offshore wind projects are close to but actually outside our territorial limits. Will the provisions of the Bill apply to such plans?

Lord Hunt of Kings Heath: My Lords, we are on Report. Perhaps I can write to the noble Lord on that rather than go into an extensive debate.

Lord Bridges: My Lords, I am happy to receive a letter from the Minister, but would he be so kind as to place a copy of it in the Library, as a fundamental point is raised that I have not seen addressed in any of the official communications on this subject?

The Duke of Montrose: My Lords, I thank the Minister for that wide-ranging response, but he did not address the point about fibre optics; I do not know whether he has anything to say about that. He creates an interesting scene in my mind. If there is no limit to the size and extent of underground cables and someone started to put the main interconnector—not that that is necessarily a very big cable—underground, in the north of England, and heading for Scotland, and did not need planning permission, could they simply dig a hole and put it in without anyone having any say in the matter?

Lord Hunt of Kings Heath: My Lords, I am sorry that I did not answer the fibre-optic question. My understanding is that the IPC could not consent to fibre-optics cables in their own right, although if they were part of a nationally significant infrastructure project that required them, a promoter could apply to have them as part of an NSIP—as associated work—under Clause 113.

The Duke of Montrose: My Lords, it has been of great interest to the House to hear from the Minister how sea-situated connectors will be considered under the marine Bill. When we get to that stage, I think we will all want to be very sure about how this ties in with Ofgem’s responsibility for security of supply. It will have to look at several Bills to ensure that it can carry out its available duties. I shall read what the Minister has to say, but, in the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Hamwee moved Amendment No. 53:

53: Clause 14, page 8, line 11, leave out “add a new type of project or”

The noble Baroness said: My Lords, Amendment No. 53 returns us to overarching points of principle

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because it would remove from Clause 14 the Secretary of State’s ability to amend the list of nationally significant infrastructure projects by, among other things, adding a new type of project. I bring this amendment back because, when I raised the point in Committee, the Minister’s answer was very much about possible future changes in technology. When I read Hansard after the debate, I realised that I should have pursued the matter in Committee because such changes are by no means all that this provision might cover. Any fundamental changes in technology that allow for new projects could give rise to some very important questions that required more than the secondary legislation that would apply to enable the Secretary of State to add to the list. I hope that we do not need to detain the House for very long, but I invite the Minister to expand on his answer on a previous occasion. I have been in touch with his office, so I hope that I am not asking him to do anything unexpected. I beg to move.

Lord Hunt of Kings Heath: My Lords, I am glad to respond to the noble Baroness on this matter. She has raised an important point and it is important at the very least that I place on record the Government’s view of the intent behind the clause. As she suggested, Clause 14 sets out in broad terms what types of project will be nationally significant infrastructure projects for the purposes of the Bill. The detailed thresholds for each type of project are spelt out in subsequent clauses. It is right that the Secretary of State should have the ability to make secondary legislation at a later date, as provided for at Clause 14(3), in order to respond to the changes in circumstances that may arise. That flexibility is an important balance to the other provisions in the Bill.

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