|Previous Section||Back to Table of Contents||Lords Hansard Home Page|
The Deputy Chairman of Committees (The Countess of Mar): My Lords, before the Minister moves that the first national policy statement be considered, could I remind noble Lords that, in the case of each national policy statement, the Motion before the Committee will be that the Committee do consider, rather than approve, the draft national policy statement in question? If there is a Division in the House, the Committee will adjourn for 10 minutes.
That the Grand Committee do report to the House that it has considered the Revised Draft Overarching National Policy Statement for Energy (EN-1).
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland): I am very pleased to open this debate on the revised draft energy national policy statements-the NPSs. The NPSs are a suite of documents that will comprise the decision-making framework for major energy infrastructure proposals. I will briefly explain the changes that we have made to them since the first consultation in November 2009.
First, I should explain briefly the role of Parliament in ensuring that the revised documents are as robust as possible. This debate is part of the scrutiny process set out in the Planning Act 2008. It is an opportunity to comment on the revised energy national policy statements, apart from the nuclear one, which we will debate on Thursday. The coalition Government believe that NPSs should be subject to approval by Parliament so that they have the strongest possible democratic legitimacy. This House has an important role in scrutinising draft NPSs, and this debate will help the Government prepare the final versions of NPSs. I hope your Lordships agree that we have taken on board the very helpful comments by noble Lords in shaping these NPSs. We intend to lay the final NPS for ratification in the spring.
The revised versions of the five non-nuclear NPSs take into account the previous Grand Committee debates and the recommendations from the Energy and Climate Change Select Committee. Details of these are set out in the response to parliamentary scrutiny. I have also placed a memorandum on the changes to the NPSs in the Library.
Throughout the NPSs we have tried to improve the clarity and consistency and we have removed repetitive material from the technology-specific NPSs where it could be said once in the overarching NPS. We have made significant changes to the statement of need in the overarching NPS, EN-1. This now includes research that was not available for the first draft, including more detailed analysis of scenarios to achieve an 80 per cent reduction in carbon emissions by 2050. However, the conclusions remain the same: we urgently need a new energy infrastructure.
In fact, the Pathways 2050 model shows that we might need at least twice the electricity-generation capacity by comparison with today in order to meet our climate change targets because we will need to electrify large amounts of industry, heating and transport. Our modelling shows we need about 59 gigawatts of new electricity capacity by 2025, of which more than half will come from renewables. We would like a significant proportion of the remaining non-renewable generation to be filled by either low-carbon technologies, such as nuclear or coal with CCS. New nuclear should be free to contribute as much as possible to this. We also need gas generation as part of our transition to low-carbon. We have also included more detail in EN-1 on what is required for an economic feasibility assessment to ensure that fossil fuel generation stations are carbon-capture ready.
In this Committee last February, the noble Lord, Lord Woolmer, suggested that the provisions in the fossil fuel generation stations NPS-EN-2-which require applicants to demonstrate the economic feasibility of carbon-capture readiness, were such that developers would have difficulty demonstrating economic feasibility. We have therefore added more detail in EN-2 on how applicants might demonstrate that their proposals for CCR would be economically feasible, including a model for an economic assessment that takes into account the difficulties of calculating variable costs over a long period. The revised overarching and fossil fuel NPSs also note that operators of fossil fuel generating stations will have to comply with an emissions performance standard. That may be introduced but it is not currently envisaged that it would be a development consent condition.
We have clarified that the renewables NPS-EN-3-does not cover alternative renewable energy technology, such as tidal and wave power or solar energy. We do not anticipate that most of these technologies will become commercially viable above the Planning Act 2008 thresholds in the near future. However, applications for consent for tidal range schemes may be submitted to the IPC or its successor in the next few years. We are therefore considering including tidal range schemes in the NPSs, either through an amendment to this NPS or through a separate NPS at an appropriate stage.
I thank the noble Baroness, Lady Young, for her suggestion in the previous debate that the renewables NPSs should set out specific directions to the IPC on assessing the sustainability of biomass for generating stations using it as fuel. We have considered this carefully. However, we believe that sustainability of biomass is best addressed through the renewables obligations. The revision of the renewables NPS explains
11 Jan 2011 : Column GC117
We have also revised the text with regard to noise for onshore wind farms. The ETSU-R-97 recommendations for noise limits for the operation of wind turbines have been criticised as being outdated. We have therefore made it clear that applicants should take into account the latest industry good practice on assessing noise from wind turbines, as well as existing guidance in ETSU-R-97. We are keen to ensure that planning authorities and developers have clarity about best practice to provide greater certainty and consistency in the planning system. Therefore, we have also commissioned research to analyse consideration of noise in development consents. This is due to be completed in March and will inform the text in the renewables NPS.
We have clarified that the gas supply infrastructure and gas and oil pipelines NPS-EN-4-covers only oil and natural gas pipelines, and not CO2 pipelines. We will seek views on the development of the CO2 infrastructure and intend to include onshore CO2 pipelines in a suite of NPSs at a later date. The noble Lord, Lord Crickhowell, suggests that NPSs should address safety in LNG deliveries to terminals. The Government agree, and the NPS has been amended to include an explanation of the regulatory controls that apply to ensure safe shipping of liquefied natural gas.
In the February debates the noble Lord, Lord Judd, was concerned about the impact of overhead electricity lines-I agree entirely with his concern, as a private matter-in areas of outstanding natural beauty. We have tried to ensure that the government policy on undergrounding and the need to treat each application on a case-by-case basis is expressed more clearly in the electricity NPS, EN-5. We have also added a new section on bird strike in this NPS to reflect findings in the revised appraisal of sustainability.
We have also substantially revised the appraisal of sustainability for the non-nuclear NPSs. This will make it easier for people to evaluate the likely environmental impacts of the revised draft national policy statement. We also set out strategic alternative approaches to the NPS policies and explained why at this stage we do not think that they represent better ways of achieving our energy policy objectives through the planning system.
The Localism Bill, which had its First Reading in the other place on 13 December, sets out our proposals to abolish the Infrastructure Planning Commission and replace it with a major infrastructure planning unit as part of the Planning Inspectorate. Under the reform regime, major infrastructure projects will be decided by Ministers in accordance with the policy framework, not by a quango, so there is an urgent need for the new major energy infrastructure. The energy national policy statements in place will provide a clear framework against which planning applications for this infrastructure will be assessed. I commend these national policy statements to the Committee.
Lord Giddens: My Lords, I see that the Government's passion for reducing bureaucracy does not extend to bureaucratic language. The Revised Draft Overarching National Policy Statement for Energy could have come from a satire by C Northcote Parkinson. I am pleased to hear that the Minister reduces this to "NPS" and "NPSs".
With regard to substance, as in previous debates, I congratulate the Government and the Minister on the seriousness of intent with which they are approaching issues of energy and climate change. I am also encouraged by the constructive relationship that seems to exist between the Department of Energy and Climate Change and the climate change committee. It is good to see that carbon mitigation policies are being pursued in such close conjunction with energy security and a proactive approach to adaptation. As one of those people who thinks that climate change is moving more quickly than mainstream opinion and is probably already embedded in the world climatic system, I am pleased to see that adaptation plays a significant part in these documents. We may have to prepare in more radical ways than are suggested there, depending on how we monitor the consequences of what is there in the system already.
The documents are commendably ambitious, but I wonder if there are some ways in which they are not ambitious enough. I have four main points to put to the Minister for his response. First, the Government want 30 per cent of the UK's electricity to be generated by renewables by 2030. It sounds as if they are aiming high until one realises that in Spain 35 per cent of demand was met by renewables-namely hydro, wind and solar power-in 2010, the year just gone. Wind power alone met 16 per cent of demand. At its peak on 9 December, wind generated 43 per cent of total electricity demand. One of the key figures in Spain's energy industry, Javier Breva, was quoted in the Guardian as saying:
I would like the Minister's response on what he makes of such comparative examples in relation to the proposals listed here. Incidentally, this example also shows, as I have mentioned in previous debates, that there is a big difference between the proportion of renewables in a system and the overall emission of CO2. Spain's emissions were growing quite radically until the recession in 2008, so having a high proportion of renewables does not guarantee a declining curve in emissions because it depends on what happens in the rest of the economy.
Secondly, because the Government believe that dependence on coal will last for quite a while to help act as an anchor for energy security, they place a strong emphasis on CCS, which is discussed extensively in the documents. What is the Government's fallback position if CCS does not work or encounters major problems which limit its application? Everyone who has followed the debate on CCS will know that it is surrounded by issues and problems. It is not a technology which one can immediately say will be capable of achieving the large-scale generalisation presaged in
11 Jan 2011 : Column GC119
Thirdly, it is stated in the documents that the,
Is it right for the Government to put so much faith in the ETS? The initial phase of the ETS has basically been a failure in limiting carbon emissions. It has generated markets and it has generated a lot of money, but the studies we have on its impact in European countries in reducing carbon emissions show that the proportion of reduction seems to be about 5 per cent. However, it is also likely that some countries exaggerated their carbon emissions in order to show themselves in a better light, and so it may be that the true impact of the ETS was close to zero. We have gone through two revisions since then, but it does not seem right to say that the ETS will guarantee a positive outcome for the UK economy in these terms. The new system which has been introduced may be more effective but it is as yet unproven. I would welcome the Minister's comments on that.
Fourthly and finally, I have a point which echoes the one I made in our previous energy debate, on the final day before the recess. No systematic attention seems to be given in these documents or elsewhere to the wider economic implications of transformations in the energy system. It seems incoherent to accept the need for comprehensive planning for the energy system while supposing that all the rest can seemingly be left to the hazards of the markets. In other words, as I argued previously, some form of targeted regional planning is surely needed.
There are many suggestions in the documents and in the responses to them. I ask for the Minister's view on one suggestion which I read in some detail-the proposal from the Royal Town Planning Institute for a national spatial planning framework. I cannot see why the Government should accept the need for systematic long-term planning for energy-which of course is necessary-but imply that it stops there. All the economic implications are very considerable. You have to balance them out in a planning framework with the consequences for the rest of the economy and the wider society. I should welcome the Minister's response to my queries.
Lord Teverson: My Lords, perhaps I may start by giving a personal opinion. When we previously considered these draft policy statements it was done in a Grand Committee-style rather than a Second Reading-style debate. I think that that probably works better for draft statements, although we now have only one more to consider. As the Minister said, a large number of intelligent and profound points came out of that process. That was partly because the session was less formal than today's session will be-although I am sure that we will be equally productive.
One of the things that are always useful about this type of statement is that it goes through the bare facts of the background of the situation. Immediately when you read the first sections of the overarching statement you realise that, as an economy, a climate, a nation
11 Jan 2011 : Column GC120
The other thing that really stood out to me-I must have read this before but I did not really realise it-is that, on average, only half of that 85 gigawatts is used. It is a degree of peaking, which we are aware of, but, in terms of capacity, we already have to add on 100 per cent to what we normally need. One of the things that that says to me as a past corporate economist, and as an economist more generally, is that there is a major market failure here. Clearly you cannot take peaking completely out of energy markets-that would be impossible-but it is staggering that it is at that level. In conjunction with Ofgem, DECC is looking at market structures. This huge market failure also should be looked at. In consumer terms, off-peak electricity is clearly too expensive. I have a background in industry. If I saw most of my assets doing nothing for half the time, I would say that it is a very ineffective way to run the infrastructure of a business, let alone of a country. That is one of the major messages that comes out to me. I hope the Minister will take that thought forward very strongly in terms of market-mechanism reviews.
I will concentrate mainly on the overarching statement. In paragraph 2.2.14 the Government express a strong preference and commitment to reach a 30 per cent reduction in emissions at European level by 2020, rather than the current 20 per cent. I know that that is very much one of the Secretary of State's aims and targets and I hope that he has success in that very important area.
Perhaps I may go through some of the areas that bring up more questions than answers. One of them, as the noble Lord, Lord Giddens, said, is carbon capture and storage. Although carbon capture and storage is an important strategy and a great technology in that, in many ways, it sweeps the pollutants under the carpet-or under the North Sea, or underground, or wherever you want to put them-the statement in fact says that there is uncertainty about that technology. The report actually states that, which I think is very honest, and it is a good thing that it does so. However, there are all sorts of areas around CCS that we need to make sure we do not completely sell our soul on. We need to make sure that it is going to work economically and, necessarily, technically. It can probably work technically, but will it work at a cost in terms of investment that power organisations will be able to absorb?
I have been a Member of this House for four and a half years now and for most of that time we have been talking about demonstration projects, contracts, competitions, getting these things on board, Britain being ahead, and regarding this as not exactly a silver bullet but as an important part of solving the whole
11 Jan 2011 : Column GC121
Another small thing on CCS: it seems to me that if CCS is going to require anything, it will be pipelines to disperse the carbon dioxide that we take out of energy production. However, the pipeline part of the energy draft statement relates only to oil and gas pipelines. I assume that there will be quite a few carbon dioxide ones in future as well.
I return to one of the broader issues, which is air quality. I shall quote from paragraph 5.5.2. I largely welcome these statements, but this is an area-I am not sure that I have got the reference right; I apologise. The Government specifically exclude carbon dioxide as one of the pollutants in the atmosphere. The NPS goes through the sulphur and nitrous oxides and so on, but it says that carbon dioxide is dealt with through other regulations in other ways. If we look at the American experience with its Environmental Protection Agency, which finally agreed a couple of years ago that CO2 was a pollutant, we can see that the Government should not be afraid of CO2 being classified as such, and it should be taken into consideration with regard to these draft statements. There are other mechanisms by which CO2 is dealt with, but we should accept that it is an atmospheric pollutant and deal with it on that basis. We should not avoid that issue.
There is a small chapter on socioeconomic issues. I come from the south-west, and I know that in terms of new nuclear-I will not expand on this too much because this subject will come back in a future nuclear debate-there are potentially huge disruptions for local communities when construction takes place. To have a power station you have to have a construction process and inevitably you bring in a large number of contractors and workers, but there is certainly a great fear-for example, around Hinkley Point-that all the holiday home accommodation will disappear for three years and kill the holiday industry in the longer term, and that social housing will be filled or the private sector part of social housing will disappear, putting all sorts of pressures on local authorities. Perhaps I could come back to that when we debate the nuclear areas.
On consultation, I do not pretend that I have read every word of these documents but I have read pretty well most of them. There does not seem, and I do not understand this, to be any requirement to consult anyone specifically as part of the planning process. Maybe I misunderstand these documents and that is not supposed to be part of this process, but there is no requirement that the planning authority and the Minister take evidence from local authorities or, for instance, from the devolved Assembly in Wales. I do not understand from these documents who has to be consulted. Surely we have to ensure that someone definitely is consulted; everyone will be aware that a nuclear power station or an offshore wind complex is being built. There perhaps needs to be more rigour in that area, but maybe I misunderstand what these documents are supposed to do.
To come back to EN-3, as an individual document on renewable energy, I welcome the statement that the Government intend to have a test of sustainability against biomass. I am a great supporter of biomass for energy generation, but sustainable credentials of that biomass in order to benefit from renewable obligations or other incentives are very important. I congratulate the Minister on including that, but I would be interested to understand the timescales involved.
The Lord Bishop of Liverpool: My Lords, I, too, am pleased to contribute to this debate on the revised statements. I recognise how much the Minister has taken on board points from the previous debates. I also recognise the huge importance of ensuring a continued sufficient and secure power supply to UK homes and businesses over the coming decades. I am concerned that the national policy statements, although revised from the previous Government's, still do not go far enough to ensure that we develop green and sustainable low-carbon power generation for the future. If the UK is to achieve its 2015 carbon targets, we need to make the right decisions now about low-carbon power generation. My concern is that, notwithstanding the Minister's reassurances, these NPSs tie us into familiar carbon-emitting power generation and do not do enough to ensure investment in renewables and the opportunity to become a world leader in renewable technologies.
While in opposition, both the Conservatives and the Liberal Democrats were vocal in their concerns about the Infrastructure Planning Commission. I was encouraged to hear the coalition Government announce in the first weeks of their tenure their intention to abolish the IPC. However, the timing of the NPSs and the Localism Bill, under which the IPC will, I hope, be abolished, means that during the next 12 months the IPC will make decisions about infrastructure planning on the strengths of these NPSs. It is therefore possible for the IPC in the coming 12 months to grant permission to build a significant number of coal and gas-fired power stations. I would be interested in the Minister's comments on this supposition. That permission is possible within the framework offered by these revised NPSs. I understand that several applications are already being considered, which, if granted, could lock the UK into another generation of carbon-emitting energy supply. I would like to be corrected and proved wrong; perhaps the Minister will do so shortly. I cannot believe that this is the Government's intention, bearing in mind their commitment to being the greenest Government ever. However, this may be an unintended consequence of these statements.
It is also possible that this year the IPC will grant planning permission to several nuclear power stations. Again, I would like to be corrected but I understand that this is a possibility. I know that this will be debated on Thursday. I hope your Lordships will give me permission to make just one point about this now because, unfortunately, I cannot be in the House on Thursday. The Government have a responsibility to respond seriously to concerns raised in the debates on the previous NPSs which have not been adequately addressed by the revised nuclear NPS. The Minister
11 Jan 2011 : Column GC123
The Minister will be aware that during consideration of the Planning Bill and in the NPS debates under the previous Government, I raised concerns about counting the carbon. I am disappointed to see that the revised NPSs still do not include this specific requirement. The Committee on Climate Change recommended that applicants conduct,
of their proposal, to be considered by the IPC. However, even with this recommendation, the Government do not seem to accept the importance of counting the carbon. From what the Minister has just said, I accept that the environmental impact assessment directive goes some way to addressing this, as does the Climate Change Act. However, I fail to be convinced that this is enough. I urge the Minister to reconsider the inclusion of a requirement in the NPS for full carbon counting. If this is not done, we could find ourselves building stations that pull the rug from beneath the Government's explicit targets on reducing carbon emissions.
By the time the responsibility for decisions about major infrastructure moves to the Secretary of State, a number of infrastructure applications may well have been granted. My concern is not simply that we will find ourselves locked into carbon-emitting energy generation for decades but that we will have missed the opportunity to participate in the growing global green economy. As I am sure the Minister will be aware, according to research done by the Pew Center, China is emerging as the world's cleanest energy powerhouse. It has already become the world's leading investor in renewables, aiming for 15 per cent of its energy to be generated through renewables by 2020. It has already designated five provinces and eight cities as low-carbon pilots, representing some 350 million people-27 per cent of the population-and a third of its economy. The centre of gravity is shifting from west to east not just for the world's economy but for its green economy. We have in these blue folders before us a global economic opportunity. I wonder-the Minister may like to address this point-whether this was on the agenda of the Prime Minister's meeting with the Deputy Prime Minister of China yesterday.
We must look in these revised NPSs for a sound road map towards creating a secure energy supply that is green and sustainable, one which enables the Government to live up to their claim to be the greenest Government ever and enables the UK to be a global market leader in green energy generation.
Lord Jenkin of Roding: My Lords, I must begin by declaring a couple of interests. I am the honorary president of the National Skills Academy for Nuclear
11 Jan 2011 : Column GC124
I also applaud the acknowledgement in the statements that we need to look beyond 2025. We have all recognised the importance of the Pathways 2050 paper which the department produced last year. A number of points in these documents reflect that work and I shall return to them in a moment.
I also welcome the proposal to extend CCS beyond just coal. I recognise that CCS for coal is the most important because coal is the greatest pollutant, but the policy statements now recognise that any generating capacity over 300 megawatts should include gas as well as coal. Given that the market in gas is huge, such a move is very valuable. I also welcome the details that have been given in response to both Houses of Parliament on the technical and economic feasibility both of carbon capture and storage and carbon-capture readiness. I shall return to that later, because it raises a few questions.
It is right to mention one or two points which were raised during the consultation with interested organisations but which, so far as I can see, are not reflected in the revised drafts. I am an officer of the All-Party Oil and Gas Group and I have had my attention drawn by Oil & Gas UK to a couple of points. It had argued that there should be an explicit obligation on the IPC or its successor to consider prior established rights for, for example, offshore applications when they have to determine applications under the policy statements. It was disappointed that there was no statement to that effect in the key principles which are in paragraph 4.1.3. Perhaps the Minister could comment on that.
Then, there is a related concern that if there is a conflict between, for instance, offshore oil and gas and the requirements of offshore wind power, the national policy statements do not really represent the scale and complexity and safety requirements of offshore oil and gas activities in the UK's continental shelf. Too many of the provisions, it will argue, are somewhat woolly and imprecise and leave the resolution of difficulties between offshore wind power and oil and gas simply to be settled by the commercial companies involved. Given the role of DECC in both these matters it would seem to me that there is a case for arguing that there needs to be rather more guidance on this from the department. These are just a couple of points where there is a little disappointment.
I think that we should look at the context-indeed, all the previous speakers have done this-in which we are considering these revised national policy statements. My noble friend mentioned the planning reforms.
11 Jan 2011 : Column GC125
However, there are certain other planning developments still to come. We are told that there is to be a national planning policy framework and some rationalisation of the planning policy statements-both of which are no doubt very desirable-and everybody agrees that it is vital to build the confidence of investors, particularly for the major energy investments, if these things are to happen. To do that one needs to reduce uncertainty and achieve policy stability. Therefore I ask two things of my noble friend. First, what undertaking can he give to designate these new revised national policy statements as soon as possible after the consultations have been completed? Secondly, given that there are going to be these further developments coming along later, could he ensure that the national policy statements should stand as clear guidance and should slot unscathed into the revised suite of policies and the guidance as they are developed? That is a point that has been put to me and I entirely support it. As has been said, there is to be huge energy investment over the next 10 to 15 years and anything that can achieve certainty on this is to be welcomed.
Can my noble friend tell me something about the future timetable on this? I have been assured by the usual channels that we could, if we wished, repeat last year's processes and table resolutions that could be debated on the Floor of the House, and that would, in theory, be divisible. I am not sure whether that will be necessary on this occasion as most of these national policy statements will attract wide agreement. I have been told that this will happen in the other place and that there will be a vote on a Motion from the Government to approve the national policy statements. Can my noble friend say whether anything like that is likely to happen in this House?
A few moments ago I referred to the 2025 span for the national policy statements and the 2050 figure in the pathways paper. Perhaps I may draw attention to what was said about that in paragraph 3.3.16 of the overarching statement, which states:
"The Government has therefore considered a planning horizon of 2025 for the energy NPSs in general and for EN-6 in particular, as an interim milestone".
It is important to notice that phrase. The following paragraph states:
"The Government will keep the relevance of this interim milestone of 2025 for the energy NPSs under review".
The question that I should like to put to my noble friend is: how will that be done; and when does he anticipate that it will be appropriate to extend the review either in new national policy statements, as he suggested, or in some form of amendment? I will refer
11 Jan 2011 : Column GC126
I return to the policy statements we are considering today. There are a great many issues to which I am sure noble Lords in all parts of the Grand Committee will wish to refer. I should like to pick out the question of gas infrastructure. I refer to the figures that have been quoted at paragraph 3.8.4 and are the subject of figure 3.1, which makes it clear that there will have to be considerable use of gas over the foreseeable future if we are going to have intermittent renewable energy and sufficient overall energy to keep the lights on. All I can say is that that is a welcome realism. It has not always been apparent in some of the public statements that have been made, but it is only realistic. There are ample supplies of gas. It is much more easily adjustable to the changing patterns of demand and we are inevitably going to use it. Gas will remain a significant source.
However, it is also made clear in the paragraphs that there are uncertainties. In particular the document mentions energy prices. In this context, I was mildly surprised that there is no reference to the comparatively recent advent, especially in the United States, of shale gas. This was mentioned in a briefing sent to a number of us last November by the department. It stated:
"Additional supplies in the US may now have a limited impact on international gas markets (since it is now largely self-sufficient), unless the US were able to export some of this gas".
I read an article the other day which indicated that although it is true that current plans to convert some of the LNG terminals in the United States to export terminals have for the time being been set aside, the fact of the matter is that the US is now producing shale gas at considerably below the world market gas price. There must therefore come a point when there will be an undoubted incentive to try to use some of that on the world markets and therefore to have an impact on prices. That is likely to have an impact on the balance of gas on our markets here and might at some stage require a revision of the figures to which I referred a few moments ago.
As the right reverend Prelate and others have said, gas is of course a fossil fuel and therefore emits greenhouse gases. If it is going to be a larger part of our energy scene, and if that is undesirable, that implies that other sources will have to be expanded to stop that happening. One sees that the obvious answer, as a very low-carbon source, is more nuclear. That is another point that my noble friend might like to mention.
Other speakers have referred to CCS and carbon-capture readiness. I shall refer to two issues related to that. One is the whole question of carbon dioxide transport and storage, and the other is the process by which the IPC or its successor is to decide on approval, or not, of a CCR plant.
On the question of pipelines and storage, there is a requirement on the IPC under paragraph 3.6.5 to take account of further developments of CCS that will require further carbon transport and storage. This seems to be really quite difficult. The industry itself, in paragraph 4.7.7, is asked when planning its investment
11 Jan 2011 : Column GC127
I come to the more difficult, and more problematical, question of CCR, where a plant can be produced but it has to be established that it is carbon-capture ready, and how the IPC is to handle those applications. This will be a very difficult problem. One has to remember that this all came via the European Union.
Lord Shutt of Greetland: My Lords, even in the benign atmosphere of the Grand Committee, the noble Lord has had 17 minutes and I am afraid that 15 minutes is the recommended time. I do hope that he will be able to conclude his remarks.
Lord Jenkin of Roding: I can conclude my remarks extremely briefly by saying that I hope that my noble friend will give us some explanation of how the new guidance on CCR is intended to work, and what the remaining role of the IPC will be in that. I am sorry if I have tested the patience of noble Lords on this, but I think that these are relevant points.
Lord Judd: My Lords, I declare an interest as an honorary officer of both the Friends of the Lake District, which represents CPRE in Cumbria, and the Campaign for National Parks. I was struck by what my noble friend Lord Giddens said about the urgency of climate change. I find myself completely in harmony with him, although there have been moments in Cumbria in the past few weeks when I have had to hang on to that conviction. However, it remains absolutely firm.
It seems that this statement again brings home to us the question of what we are trying to achieve. There is a danger that our preoccupations with energy and energy policy become an end in themselves, which they are not. They are about how we get a society worth having. If we are to take that seriously, it is not an appendix to our considerations; it is central to our considerations that we take responsibility for stewardship of our aesthetic, environmental and landscape inheritance, which is envied by the world. It would be easy, under the pressures that exist, to repeat the mistakes of the first Industrial Revolution. With hindsight we can see that they were mistakes, but surely we have a capacity to learn as a society from the faults of our predecessors. It was not necessary to do all that was done in the way that it was done, raping some of the richest, most important inheritance in our countryside and landscape across the nation.
There are those aesthetic considerations but there are also social challenges. How do we avoid a situation in which the weight of what is being done falls on those who are already relatively socially disadvantaged or less articulate? How do we avoid the "not in my backyard" syndrome, where those who do not have the same influence end up with a disproportionate amount of what has to be done on their doorstep?
All this has to be put together, which is why a national statement has the potential to be so important. I must confess to some disappointment about the draft that is before us. In what I have just talked about, the guidance on spatial issues is inadequate. There is room for much more detailed spelling out of criteria. Quite apart from the considerations that I have just mentioned, without more detailed criteria we are creating greater uncertainty for planners and public alike. Potentially, all parts of the countryside are up for grabs as the policy goes forward. This will lead to great public anxiety and pressure that, however much the Government want to speed up the process, will in the end find ways of delaying it. If there were more information available and more specificity on these issues, it would speed up the process in the way that the Government would like.
All this is brought out rather well by CPRE. It gives a specific example in an interesting brief that has been prepared. Underlining that it is not a theoretical concern, CPRE spells out that,
There is an apparent underlying assumption that there is an almost unlimited need for new energy infrastructure, but how much examination has there been of what has already been consented to? What are the implications for need and what we may have to do in the future of what has already been consented to?
This is a missed opportunity to provide for effective integration of different planning needs, to examine reasonable alternatives or to complete a convincing appraisal of sustainability. I referred earlier to what my noble friend Lord Giddens said about the urgency of climate change. I endorsed that view and said that we faced a challenge. The challenge is probably of greater significance in some ways for the history of the species than the Second World War. What strikes me in any reading of the history of the Second World War, when we faced that huge challenge in which we had to succeed, is how much work was going on at that very time into the quality of society that we wanted when the war was won and what was necessary to ensure it. Are we in danger now, in our very materialist age, of getting so preoccupied with the means that we are not facing up to the challenges that were faced up to by that great Government from 1940 to 1945?
The statements are a missed opportunity, but there are other aspects, too. The protection of areas of outstanding natural beauty, to which the Minister referred in his introduction, and national parks is, I fear, weakened in the revised drafts. One can identify this weakening by looking at the issue of the national grid and the Holford principles. Perhaps I could be forgiven for drawing in this matter again on the wisdom-there is a lot of wisdom and experience there-of CPRE.
The majority of 1,100 public responses to questions on electricity transmission policies in the first drafts of the NPSs, which was almost a third of the 3,000 responses received to the consultation on all six NPSs as a whole, called for stronger policies to control the visual impact of overhead lines. That is a pretty substantial indication of public feeling and what the public are looking for.
Disturbingly, however, the second draft of the NPS on electricity networks proposes to weaken the standing of the Holford rules. The original draft stated that decision makers should recognise that the rules should form the basis for the approach to routing new overhead lines, and applicants should be expected to follow them where possible. This latest draft says only that decision makers should bear the rules in mind. This would mean a significant weakening of the rules. It is likely to mean that there will be no requirement on either electricity companies to demonstrate that they have sought to avoid damaging impacts to important areas of landscape or on the decision maker to base its evaluation of a proposed overhead transmission line scheme on whether the Holford rules have been met. Nor is there any expectation that the mitigation measures suggested in paragraph 2.8.9 of EN-5 should be carried out for schemes where one or more of the Holford rules are not met. The effect of this could well be seriously to weaken the protection of the countryside from unnecessary and intrusive energy infrastructure.
Of course, since the NPS was drafted, significant policy changes have occurred, the most notable of which is the review announced by National Grid on 15 December of its policy on undergrounding electricity lines. This review comes in the context of a review of the costs of undergrounding led by the Institution of Engineering and Technology and KEMA. Their estimate of costs appears to be much lower than the inflated figures cited in the previous draft NPSs. In the light of these reviews and of the scale of proposed new electricity transmission infrastructure, will the Minister not agree that the Holford rules should surely continue to form the basis of planning for new overhead lines, and that the IPC should be empowered to require underground or undersea transmission in areas which are environmentally sensitive?
Before I conclude, I wish to deal, if I may, with what have been described as "minor changes" to the new drafting. After quite a number of years in politics, I am always very cautious about minor changes in drafting, because they sometimes have far more implications than are recognised. I suggest that the public have not been alerted at all well to the implications of some of the so-called minor changes and their-I shall be generous-unintended consequences, although
11 Jan 2011 : Column GC130
I shall give examples. Paragraphs in section 5.8 of EN-1, on the historic environment, almost exactly repeat existing protections in PPS5, except that they remove references to non-designated areas. In particular, paragraphs 5.8.12 and 5.8.17 add the word "designated" to existing language in PPS5, thereby weakening protection for non-designated heritage assets, such as the buried remains of Roman Winchester. According to English Heritage, these are of at least equivalent importance to that of many places that are designated. To give a sense of scale, less than 15 per cent of historic buildings on farms are nationally designated.
Paragraph 5.9.9 of EN-1, on visual and landscape impacts, repeats the new contribution-to-the-regional-economy criterion which first appeared in the previous draft EN-1. This is a major departure from existing protections for nationally designated areas and significantly reduces their protection.
Paragraph 5.12.8 identifies developer contributions as a material consideration for planning decisions. It is right to consider these benefits through the planning process. However, the NPS should specify that contributions must relate to the purpose of the project. For example, community benefits for energy projects should contribute to local energy saving or microgeneration.
I feel very sad. I have talked about the thinking that went on during the war about the kind of Britain that we wanted to have when it was won. Paragraph 5.10.12 of EN-1 advises applicants on ways in which to circumvent green belt protection. That is deplorable.
On Thursday, nuclear policy is to be discussed and this is therefore not the time to do so. However, there is a close interrelationship. Apart from all the other issues that I have mentioned-aesthetic, environmental and the rest-there are of course geological considerations. This was recently brought home tellingly by the earthquake in Cumbria. I raised this with the Minister in a Written Question and I am grateful for his full and helpful reply, which noble Lords can read for themselves in Hansard. In that reply, he says:
"Vibrations associated with earthquakes experienced in the UK will not significantly affect a repository at depth, but any potential for changes to the rock mass containing a GDF must be thoroughly investigated". -[Official Report, 10/1/11; col. WA375.]
We are talking about hundreds of years ahead. I wonder whether some of our successors may look very closely at that confident prediction that vibrations associated with earthquakes experienced in the UK will not significantly affect a repository at depth. It does not sound to me like quite the careful drafting that there should be on a matter of this significance.
Lord Reay: My Lords, I find myself in a position in which I may rain somewhat on the parade. As I see it, the NPSs are essentially tools designed to help force through the planning system the Government's energy policy, which, above all, reflects a quixotic desire to achieve the most exacting renewable energy targets in the world at whatever cost there may be to economic growth and irrespective of whether any other country does likewise.
It is on wind power that the Government must place virtually all their hopes of achieving their renewable energy targets. Last year renewable energy provided 6.6 per cent of our electricity and, out of that, wind power only 2.4 per cent. Nevertheless, only wind power has shown any substantial growth, having tripled the amount of electricity it has generated in the past four years, while hydro and biomass have not managed increases of even 20 per cent. However, the main trouble with onshore wind from the Government's point of view is that it is extremely unpopular. It is noteworthy that the Committee on Climate Change, in its recently published Fourth Carbon Budget report, recognised that the unpopularity of onshore wind turbines poses a risk to their deployment. In the measured-indeed, understated-words of the committee on page 248,
There are now several hundred protest groups throughout the country, tenaciously opposing the imposition of industrial-scale turbines on their rural landscapes. In an increasing number of cases, they have persuaded planning inspectors of the justice of their case.
The Government's answer to this seems to be to follow the example of the developers and seek to bribe local authorities with financial rewards if they grant planning permission in the first place. There are provisions to enable this in the Localism Bill. In such a way do the Government seek to reconcile their claim to be handing more powers of decision to local authorities with their determination to impose on them their green agenda. However, it may be-I hope that it will be-that the planning system that we still have, enforced ultimately by the Planning Inspectorate that we still have, will succeed in protecting the countryside from this onslaught. In that case, our planning system, so wonderfully successful in the last century in protecting our landscape from uncontrolled ribbon development, may save it for a second time this century from the worst consequences of today's scandalous vandalism.
Offshore wind is less unpopular because it is further away; indeed, some of it is out of sight. That aside, it has even more disadvantages than onshore wind. As the Committee on Climate Change report puts it:
"Offshore wind generation has much more complex engineering aspects (e.g. relating to the salt-water environment), is at an earlier stage of deployment and is much more costly than onshore wind".
Indeed, it costs the poor consumer, who is paying for the subsidy, twice as much per unit of electricity produced as onshore wind, and it is no more efficient at producing it than onshore wind, with a load factor last year that was no higher than that for onshore wind, at 26 per cent.
I have no doubt that circumstances will eventually force the Government to retreat from their ruinously expensive policy, as other countries have already shown signs of doing. The tragedy is that so much will have been wasted-indeed, scattered to the wind-in the mean time. Each accredited wind farm will be able to claim its enormous ROC subsidy at the rate originally
11 Jan 2011 : Column GC132
I should like to say something about gas and take up a point that the noble Lord, Lord Jenkin of Roding, made. I could find no proper discussion in any of the NPSs about shale gas, and I find that astonishing. Even the Committee on Climate Change, in its report that was published at about the same time, had something to say on the subject, including this:
"There is the possibility that potentially abundant supplies of unconventional gas will result in considerably lower gas prices";
"The emergence of unconventional gas supplies, particularly in the North American market, has led to the prospect of a possible new 'dash for gas' in some regions of the world".
Yet the Government apparently cannot find space in several hundred pages of their energy national policy statements to acknowledge the existence of this potentially game-changing development. Gas is now cheap, the price having decoupled from the oil price, and it is going to be accessible in many countries worldwide, not least in Europe. It emits 50 per cent to 70 per cent less carbon than coal, with the result that when the previous "dash for gas" took place in the 1990s and gas to some extent took over from coal, our power station carbon emissions fell overall by some 30 per cent.
What is the point of persisting with ever-rising subsidies for wind power in order to meet renewable energy targets when abundant, cheap and relatively CO2-clean gas is available? What is the point of having to install 130-plus gigawatts of generating power in order to be able to provide 100 per cent back-up for wind power, when 80 or 90 gigawatts would be enough to satisfy peak demand using any other fuels? Do the Government think that consumers will tolerate ever-rising electricity bills in order to be able to enjoy the mystical advantage of having their electricity powered by wind rather than more cheaply by gas? At Question Time today, my noble friend the Minister seemed to wring his hands and say that it was regrettable that electricity prices were going up. The surest way of bringing them down would be to remove renewable energy subsidies.
I turn to gas and the CCR requirement. It is clear from EN-2 that the IPC may not give consent to any combustion plant above 300 megawatts, including any gas-fired plant, that has not demonstrated carbon-capture readiness. As I understand it, it is already the case today that any new large-scale gas plant, of which there are many in the pipeline-24 gigawatts' worth, according to the Committee on Climate Change-must demonstrate carbon-capture readiness. Is that correct? If it is, what does that add to their costs? Does it result in delays? Has it affected where gas plants can be sited? Could we have the Government's views on that?
On CCS itself, the Government have already committed £1 billion towards the cost of just the first of the four demonstration plants that they have planned. As I read it, they have already pledged to CCS as much as all other countries combined. However, the signs of success are not universally apparent. Last autumn, Norway announced a vast increase in the cost of its Mongstad project and put back by some years the
11 Jan 2011 : Column GC133
I should like to say something about the grid and take up what the noble Lord, Lord Judd, said. According to the CPRE, we face what is expected to be the largest rollout of new power lines in a generation. This is required primarily to transport the electricity generated by wind farms in distant places to the centres of demand in the Midlands and the south-east. Even though those power lines will operate at the same capacity as wind power's load factor-that is, under 30 per cent over the year-they must be capable of carrying full capacity for when the wind is right.
Concern has been growing, as the noble Lord, Lord Judd, said, about the damage that all this will do to the landscape. I therefore welcome with him the consultation that National Grid has launched on its approach to undergrounding energy cables, as well as the study on the comparative costs of underground and overhead cables which the Institution of Engineering and Technology has agreed to undertake. Underground cables are the rule in cities. Why cannot we see more of them in the country? Like the noble Lord, I am concerned about the apparent weakening in the NPS of the Holford rules. I have passed a question to the Minister's officials asking why this apparent weakening has been introduced.
I end by referring to the Met Office, that old friend. The Government place all their faith in immensely long-distant temperature forecasts provided by an organisation that has time and again given proof that it is not able to forecast accurately beyond about next week, probably because its computers are programmed to provide the answers that its masters so passionately desire; namely, evidence to show that they have been right all along and that we are on the verge of being overwhelmed by a global warming catastrophe unless we do something about it. How can it be sensible for the Government to rely on that? Are the Government establishing a most urgent enquiry, as they should, into why they should continue to pay £200 million a year for the advice of the Met Office, which has just misled the whole country with regard to the weather in December, which in October it predicted would be mild? Is this the best use of taxpayers' money? Are there no better advisers around?
Lord Crickhowell: My Lords, I should like to speak briefly in the gap about the safety issues referred to by my noble friend the Minister. I have to say that I find paragraph 2.4.2 of statement EN-4, about the maritime risks for LNG, extremely unsatisfactory. We are told that,
In my previous speeches, I indicated why our experience in Milford Haven suggested that we should not be able to rely on that, because a port authority with a conflict of interest might decide, as it did in that case, to vary
11 Jan 2011 : Column GC134
I am even more disappointed about paragraph 2.11.6, which comes under the heading "Factors influencing site selection by applicant", and states:
"The primary technical siting considerations for a conventional LNG terminal will be the combination of a deepwater jetty for berthing LNG carriers, the availability of a suitably large site for industrial development and pipeline access from the LNG terminal to the National Transmission System".
There is absolutely no reference to offshore berthing terminals, about which I spoke at considerable length at our earlier sessions, and of which I gave more than one example, particularly regarding the Adriatic, south of Venice. There are huge advantages in such terminals because they can mean that the LNG vessels are unloaded well away from population areas. What is more, the pipelines can be much shorter because you can site the terminals close to where you wish to consume the gas. It is extraordinary that there is no reference at all to this highly desirable siting of terminals, which is the policy followed by a good many countries overseas.
I turn to pipeline safety. I did not really raise this on the previous occasion, but people have come to see me, engineers of considerable experience, who have produced worrying evidence to me that safety standards have not always been met to the highest standards in the construction of a major pipeline from Milford Haven across south Wales into England. I have photographic evidence shown to me of some of the shortcomings, and I take it seriously. More worrying still, the HSE has said clearly that it does not have sufficient resources to inspect the whole operation and check on every aspect. Yet we have rules that say that the pipeline safety regulations place general duties on all pipeline operators, and the pipelines have to be designed, constructed and operated so that the risks are as low as is reasonably practical-ALARP, if that is the right phrase for the safety standards. In paragraph 2.18.6 we are told that the pipeline operators should be able to demonstrate "equivalent levels of safety" if they move away from the ordinary established standards, and in paragraph 2.18.5 that:
"In determining compliance, HSE expects pipeline operators to apply relevant good practice as a minimum".
It is necessary, when we are dealing with pipelines that can create real hazards and have done so elsewhere in the world, that local people, who can be considerably worried by the safety aspect, should be shown clear evidence, and the IPC should insist on clear statements, of what safety precautions have been taken. The HSE must give full information so that people's anxieties can be properly mitigated.
The Lord Bishop of Chester: My Lords, in the gap I doff my warm woolly hat, or even my mitre, in three directions-three areas where I think the policy statements are inadequate. The first has been covered partly by
11 Jan 2011 : Column GC135
Secondly, due to the occupational hazards of being a bishop, I, too, cannot be here on Thursday, like my right reverend friend the Bishop of Liverpool, but I have a question about nuclear. The policy statement makes a clear case for major nuclear investment, but why is there not the same subsidy as is available to wind power, given all the constraints and difficulties that exist in relation to wind power? I hope that the Government can answer that on Thursday.
I should like to spend a little more time on the third area, and ask how these policies relate to events in the wider world. Every country on earth that has fossil fuels, especially underground oil and gas, feels a compelling economic requirement to exploit them. We are told on page 13 of the report that it is the Government's policy to maximise production of oil and gas from the North Sea. If you are the Sudan or the United States of America, you feel the same compulsion. You would feel the same compulsion if you suddenly discovered vast amounts of additional gas in the form of shale gas. What will become of the oil and gas that is taken out of the ground? It will be turned into carbon dioxide; that is the only useful thing you can effectively do with it, because its value is tied up in the energy in the carbon-carbon and carbon-hydrogen bonds in the molecules. Whatever we do in this country, the great presumption must be that there will be a huge increase in carbon dioxide in the atmosphere worldwide. Any policy in this country has to be co-ordinated much more with international policy, lest we end up with very expensive energy and economic consequences that we are not currently facing.
We are told on page 54 of EN-1 that the global increase in coal production simply continues. What will happen to that coal? It will be turned into carbon dioxide. That is the only useful thing that you can do with it. It is extraordinary to assume that carbon capture and storage will come to the rescue of all this. In a previous incarnation, I was a chemist-the very foothills of science when compared with the noble Lord, Lord Oxburgh, and perhaps others here in the Room. There are difficulties in the chemical processes of capturing the carbon dioxide in the first place, potentially involving vast amounts of hydrogen and carbon monoxide, both of which are very combustible gases. Who will pay for transporting the CO2 through vast pipelines or for storing it underground? How secure will that be geologically? That point was raised
11 Jan 2011 : Column GC136
I hope that I can simply doff my cap in the direction of the Minister and ask for some replies-either today or in writing.
Lord Oxburgh: My Lords, I had not expected to speak today, but I should like to make a few comments in the gap on carbon capture and storage, in so far as it has been mentioned in a number of noble Lords' speeches. I declare an interest as honorary president of the Carbon Capture and Storage Association. In a funny way, I wish we did not have to carry out carbon capture and storage, but as long as we are committed to providing energy to people in this country-an obligation similar to those of Governments and industries around the world-we have no choice, provided we believe that controlling CO2 concentrations in the atmosphere is one of our priorities. I associate myself with the remarks of the noble Lord, Lord Giddens, and others on the urgency of doing something about this.
I will comment a little on the risk associated with CCS, to which the noble Lords, Lord Giddens and Lord Teverson, referred. I do not think that there is any serious technical risk associated with CCS technology; it has for more than a year been demonstrated and operated by the Chinese on a 100-megawatt plant north of Beijing, and they are implementing it at a 300-megawatt plant further south.
What is uncertain about carbon capture and storage is the longer-term cost. In terms of what we do in this country and in Europe in general, the problem, to which the noble Lord, Lord Teverson, was the first to refer, and others mentioned, is the infrastructure associated with CCS. The Minister will be familiar with the report of the expert group commissioned to look into this issue by his party shortly before the election-a group in which I have the honour to participate. One thing is absolutely clear: if we are serious about carbon capture and storage, the lead time needed for the infrastructure is enormous. Perhaps this is something that tends to be forgotten, or not fully recognised, by Governments and certainly by civil servants. We are talking here about heavy engineering. In terms of the capture technology, there is a lot of learning by doing. This does not happen simply because it appears in the report of the Committee on Climate Change or a government department. It is hard work. Frankly, the reason that we are not further ahead today is that progress at a governmental level, and in a public demonstration of government commitment, has been glacial. We must move ahead rapidly.
Although I commonly agree with the comments of the noble Lord, Lord Teverson, I hope the Minister does not follow his advice and refer to CO2 as a pollutant. Let us bear in mind that life on earth would not be possible without the CO2 in the atmosphere. We have to be a little careful about what we call a pollutant.
To pick up a final point made by several speakers, shale gas is a game-changer. It is still a somewhat uncertain game-changer. It has certainly ensured the
11 Jan 2011 : Column GC137
Lord Deben: My Lords, I will say a word or two in the break. I first declare my interest and my involvement in alternative forms of energy. I very much welcome these documents and the commitment of the Government to making the changes that they seek.
It would be a foolish and irresponsible Government who did not recognise that the overwhelming majority of scientific advice is that climate change is happening and that mankind is affecting it. Even if that were untrue, a population of 9 billion and a shortage of resources will mean that most, if not all, of these actions would have to be taken in any case. The argument is over. There is no point in arguing; if you do not believe in climate change, you must just accept the population argument and the changes that will be needed to reserve and conserve the resources that we have. That means that those of us who are committed to this should also be careful to ensure that the cost of the change is as low as possible. Cost-effectiveness is crucial but it would be foolish to tell people that because they do not like the rise in the cost of electricity we should not allow it to happen. They will be much angrier if we allow the world to be endangered because we have not taken these steps.
Can the Minister confirm that there is a real need to get rid of several of the impediments to what we are trying to do? I note that the Government have already set up a group of specialists in the agricultural area to look at how impediments to agriculture can be removed. There are many such impediments here. For example, the economic advantage to the providers of overhead power lines of having a new power line militates against the much more sensible policy of restringing old power lines. It is simply to their advantage to have a large amount of new investment in those circumstances. There is a whole range of such areas which are not covered in these documents but could very much benefit the nation.
Someone said that offshore wind is much more popular than onshore wind. I chair an offshore wind company, and I will tell your Lordships why it is much more popular: because it is a long way away. Once you start connecting it onshore, though, a good deal of that unpopularity will return to it. We have to be pretty tough about the changes in the planning arrangements, and I fundamentally disagree with the noble Lord, Lord Judd, on this. We really cannot run our whole system on that basis; if we had done that in the 19th century we would not have had a railway, and
11 Jan 2011 : Column GC138
I agree with the noble Lord, Lord Oxburgh, that carbon dioxide is not a pollutant, but black carbon is a major concern that people ignore at their peril. It is particularly damaging to the health of people here and throughout the world. Unless we do something about black carbon here, we will not be able to help the Indians, for example. In that country, black carbon is a real issue for the health of its population.
That leads to me to answer a point that I hope the Minister will emphasise: of course we are doing more than other people, because we are taking the lead and because we want the physical and financial advantages of doing so. If we want to get other people to do it, we have to do it first ourselves. I say to the right reverend Prelate the Bishop of Chester that I am entirely in favour of co-operation with our neighbours, but if we want that co-operation we have to set the scene and the leadership example. My only concern about the coalition policy on this is that we have to recognise that this is above all a European issue, that we have to work within the European Union, that the EU is crucial to the future of this, and that a little less attacking of the EU and a little more support for it would make it very much easier to deliver what we need to do.
Baroness Smith of Basildon: My Lords, many of us here today saw the old parliamentary year out with an energy debate, and we are seeing the new year in with another one. I hope that that is not just an accident of parliamentary timing by the usual channels; I think that it shows the importance and urgency of the issues before us today and the other issues that we are debating. Today's debate is welcome. I thank the Government for ensuring that we have two debates; there will be a separate debate later this week on the nuclear statement.
Unfortunately, I was not part of your Lordships' House during the previous debates. Having read them, though, it is clear to me that the Minister has taken on board a number of comments that were made, which has been welcomed by the noble Lords, Lord Giddens, Lord Teverson and Lord Jenkin of Roding. I congratulate the Government on recognising the scale of the challenge that is before us and on taking on board the comments that have been made. In many ways, these revised policy statements are aspirational, which emphasises how crucial they are-they are the framework under which the decisions, including how we secure energy supplies and the infrastructure to deliver them, will be made in future.
We have heard today that there is evidence of the urgency of the need to address infrastructure. By 2018 one-quarter of our energy capacity will close, and as much as 30 per cent will have to be replaced by 2020. We see many of our nuclear power stations coming to the end of their lives and coal-fired power stations being retired, but at the same time, by the Government's
11 Jan 2011 : Column GC139
These are huge issues that, as the statements recognise, can be addressed only by a combination or a blend of solutions. We will need to invest in carbon capture and storage and the rapid decarbonisation of the electricity sector. We will need to see increased capacity in renewables, in low-carbon energy and decentralised energy. As other noble Lords have indicated, we have to take this in the context of other issues under debate. The energy and market reform proposals, although not being debated today, are vital to progress, as will be our forthcoming debate, which I am sure we all look forward to, on the Government's Energy Bill. None of these issues can be seen in isolation.
Can I first ask the Minister about the process? This has been also raised by noble Lords. The Government's response to the Select Committee, which was emphasised by the Minister, made it clear that they want the "strongest possible democratic legitimacy" for these statements, and I am sure that all of us would applaud that aim. Now that the Localism Bill has been published, we have had the opportunity to look at Clause 109 on national policy statements and how Parliament should ratify them. Under this clause, if an NPS is an amended version of an earlier proposal, further consultation need not be carried out if the earlier proposal was consulted on and the amendments that have been made do not materially affect the policy. The clause goes on to state that where a proposal is laid before Parliament for approval by the House of Commons, it is not necessary to comply with the parliamentary scrutiny requirements in relation to the proposal, if they have been complied with in an earlier proposal.
I therefore have two questions-and one that occurred to me during the comments of the noble Lord, Lord Crickhowell. The first relates to the definition of material amendments. Perhaps I have picked up on the scepticism of my noble friend Lord Judd about the language. The definition of material amendments is a matter of judgment for the Secretary of State. Would the amendments in these revised documents be classified by the Minister as being material and, as such, if the Localism Bill's provisions were in force today, would these changes be subject to parliamentary scrutiny, in the way that they are now?
Secondly, what is the level of parliamentary scrutiny that would not be required? Does this mean that if the Secretary of State in future does not consider that any revisions made to the policy statements are not material, parliamentary scrutiny or ratification would not be required? I raise this because, given the significant legal weight that will be given to the national policy statements under the proposals in the Localism Bill to get rid of the IPC, I would totally support the Government's intention to ensure that these statements have "the strongest possible democratic legitimacy". What I am not clear about is how this will be achieved under the proposals. It would be helpful if the Minister could clarify and reassure me on those points.
Particularly after listening to my noble friend Lord Judd and the noble Lord, Lord Crickhowell, it strikes me that if the Minister and his colleagues are to take on board comments made in this debate and, as a result, seek to make amendments to the national policy statements, will we have to go through the entire process of consultation, revised documents and procedures in this House again. Or is the debate today simply an opportunity for noble Lords to speak and will have no impact on what can go in the documents and what changes can be made?
Finally, given that the ratification process refers only to the House of Commons and not your Lordships' House, would it be helpful for the other place if, prior to its deliberations, there were always to be an advisory debate in your Lordships' House that could help inform the process?
From these statements, there has to be the political will to tackle the issues. As much as we welcome what is in these documents, the Government will want to show that they will put support and investment behind these policy statements for them to be truly effective. In this regard, can I raise two areas of concern? The first relates to another clause in the Localism Bill and the Government's plans to abolish the Infrastructure Planning Commission and replace it with a new body called the major infrastructure planning unit, within the Planning Inspectorate. When the IPC was established in 2008, the intention was for it to be an independent body with the expertise to make balanced independent decisions without ministerial political influence. It sought to make the planning system for major infrastructure projects quicker, more efficient and set within clear guidelines, whereby it would be more predictable. That laid down the right conditions for investment in the kind of energy infrastructure that we urgently need.
Under the new system proposed by the Government, the new body, the MIPU, will make recommendations to the Secretary of State, who will make decisions in accordance with these national policy statements. The Government will have to ensure that these plans do not add delays to the system or remove the clarity and certainty that the industry needs if it is to invest in energy infrastructure, particularly renewables and, as we will be discussing later in the week, nuclear.
Also, given that the Localism Bill is not due to be enacted until 2012, it would be helpful if the Minister said something about the transitional arrangements and what will happen before the MIPU is established. I am sure he will understand that we are anxious that a further change in the system should not create delays that have a potential impact on energy security.
My other concern is about the investment required. I concur entirely with the noble Lord, Lord Teverson, about the need for certainty in this. Can I ask the Minister for further information on the green investment bank in this regard? We already know that the £1 billion investment being proposed is significantly less than the suggested figure of around £6 billion needed to make the necessary impact, but I know that the Government hope that private investment will be brought in.
Can I share with the Minister one of my concerns about this? The green investment bank will be tempted to invest in and focus on tried and trusted technologies-that is, the safe bets that it is pretty certain will deliver results-rather than seek to develop new, potentially more risky technologies that could have greater long-term potential. Can the Government give any further information about how the bank will operate and how it will guard against those problems?
Turning to the specifics of the documents, I will look at the need case. Although we agree that there is an urgent need for a diverse range of new, nationally significant energy infrastructure-I emphasise "diverse range"-does the Minister consider that enough is being done to avoid this dash for gas without any carbon abatement; and that the case for additional electricity capacity has been effectively made?
In the overarching document it is calculated that the 26 gigawatts of required new electricity energy supply, over and above the 33 gigawatts that would need to come from renewables, would in effect be determined by industry. As the right reverend Prelate the Bishop of Liverpool said, there is a concern that the balance could come largely from gas, thus undermining both the Government's declared commitment to an energy mix and carbon reduction. Since the earlier NPS, projections for gas demand have changed significantly. It would be helpful if the Minister could explain why that is the case. Given that this is a significant change, when does he think the NPSs will next be updated?
If we look at the new gas capacity in the pipeline-forgive the pun-there is already over 14 gigawatts with consent, being built or still in the pre-IPC regime. There are also further gas and nuclear applications in the IPC system at the moment. The noble Lord, Lord Judd, and the right reverend Prelate the Bishop of Liverpool raised concerns on this issue about the need to assess those applications at different stages of the planning process. Obviously, the Government want to encourage greater capacity for renewables as part of the diverse range, but there is a concern that the new gas and nuclear applications could crowd out the renewables. Can the Minister give an assurance that this will not happen? How will he ensure that we strengthen our renewable capacity as part of ensuring that we have a diverse range of new energy infrastructure and meet our target for renewables of 15 per cent by 2020?
The noble Lord, Lord Giddens, spoke of progress on renewables in Spain, particularly on wind energy. Does the Minister share my concern that Renewables UK has reported a 50 per cent drop in planning approvals for wind farms in England over the last year? What plans do the Government have to reverse this trend?
Looking at the figures for projections of capacity in part 3 of the overarching statement, the Minister will be aware of the potential for a significant energy gap. At the same time, there are doubts about the assessment on which this is based. There will need to be a more thorough assessment of electricity demand and generation, including of that already in the pipeline of the planning
11 Jan 2011 : Column GC142
These are highly complex issues. Significant planning and risk analysis is essential. If, for any reason, any of the assumptions on which the Government have based their plans are wrong, or if there are delays in providing infrastructure caused by planning or other reasons, the Government will have to find other ways of meeting the targets to ensure energy security and low-carbon energy. The noble Lords, Lord Giddens and Lord Teverson, also raised this issue in relation to carbon capture and storage. What if it proves not to be successful? I take on board the comments of the noble Lord about its effectiveness but that has yet to be tested so that we and investors can have absolute confidence. What are the implications if it is not successful? Is there a plan B?
I noted that the recommendation from the Committee on Climate Change, endorsed by the Select Committee in another place, that it should be clear in the NPS that the electricity sector should be fully decarbonised by 2030. That was rejected by the Government. I hope that the Government can look at this issue again to see if it is possible.
Finally, there is something that I was disappointed that the Minister did not raise in his speech. He will understand why I am doing so. The previous Government paved the way on these policy statements and did much of the groundwork on the documents. The greatest fear now must be delay. That means getting the planning, assumptions and alternatives right. If we do not, we underestimate the seriousness of the issue and the implications of not getting it right. I welcome our debate today. The challenge now is to ensure that the Government can deliver these objectives. We will do our best, as always, to co-operate with the Government to ensure that we have energy security and-as I pointed out in my question to the noble Lord in the House earlier, when I was grateful for his answer-that consumers do not pay the highest price. I look forward to the Minister's comments.
Lord Marland: I thank all noble Lords who have contributed and all those who have come to listen; it is much appreciated and shows the keenness with which we take this subject. As the noble Baroness said, we finished the year off with energy, we are starting it with energy, and, my goodness, we are going to be spending a lot of time on energy over the next month. We have got a lot on our plate. I hope that despite some complaining in the ranks, noble Lords here recognise that this Government do listen. I think that it is probably mistaken to get into the technicalities of a lot of the parliamentary procedure, because we have a lot of conversations outside the Chamber-we have a lot of listening; we have breakfast; we have had all sorts of things. I hope that you agree that we are listening.
The reason we are doing this is that this is a subject that transcends all Governments. It is fundamental to the country that we have a time line that goes to 2100, as I shall enunciate in a few minutes. In fact, our own
11 Jan 2011 : Column GC143
I turn to the specific questions which, if I may, I shall take in order. The noble Lord, Lord Giddens, as always, is excellent on this subject. He questions our striving for renewables and indicates that we want to achieve 30 per cent. In fact, as I said in our opening speech, we are committed to 50 per cent-which, even for a thicko like me, is larger than 30 per cent. That is our commitment: to have half our energy from renewables by 2050. The noble Lord is also right that there is a huge amount to do.
The noble Lord also asked what happens if CCS does not work. I am very grateful to my noble friend Lord Oxburgh, who really said it all for me. It means that I have to say very little-so I will not. If it does not work, which we fully intend it to do, we will obviously rely on nuclear. I shall come back to the CCS demo project later, if I may.
The noble Lord also asked whether we should put faith in ETSs. ETSs are what we have got as a European standard. As the noble Lord, Lord Deben, said, we should listen to the EU on these subjects. I do not entirely agree with him, but we should listen on some things, and I think that this is good because it works. We should challenge it the whole time and ensure that it is ticking the box. But there is a considerable take-up in this area.
If I could wave a magic wand, of course we would have targeted regional planning. It makes complete sense. It requires a lot of cross-government co-operation, and now that we have been in government for six to nine months, it is a subject where we should be looking to achieve, particularly if we are going to develop the offshore renewables industry. If this is going to become one of our great exporting subjects, we should have a centre of excellence, and I have suggested to our Secretary of State that that is a subject we should take on. I am grateful for those comments.
The noble Lord, Lord Teverson, asked about the CCS competition update. As I am leading the negotiations on the competition, I can tell the Committee that next week we have our second meeting with the chairmen of Shell, National Grid and Iberdrola at 8 am on 19 February. They are coming back to us with their offer regarding what they can achieve within the budget that we have set them. I have no doubt that we will not accept their offer, they will go back and then come back again, hopefully, with something that is more acceptable. The timetable that we have set ourselves is a vigorous one; I want to see heads of agreement signed early this year with a view to having a legally binding document by October, and they are committed
11 Jan 2011 : Column GC144
The noble Lord, Lord Teverson, mentioned consultation with local planning authorities and where we go on that. It is a requirement of the Act that local planning has to happen first. That is the normal practice that we have had in this country and we are not changing it. For major infrastructure projects, we are abolishing the IPC because we believe that it is a quango-it is not an elected body-and ultimately it should be the Secretary of State who makes the decision on major planning projects. We have debated and talked about that on many occasions. The noble Lord also talked about the biomass timescale. That is set out in the Renewables Obligation Order 2011, which should be implemented in April this year.
I enjoyed hearing the dulcet tones of the right reverend Prelate the Bishop of Liverpool this morning on "Thought for the Day" as I was trying to think for the day and about how to deal with this debate; it was marvellous to hear them coming through on the subject of bankers. He can talk about any subject, can't he? It is marvellous to have such expertise in this House and indeed in Liverpool. The right reverend Prelate wants to know what goals we have set ourselves. Pathway 2050 is one of the clearest documents that have been produced by the Government and shows the enormous challenges and the principles that we have to confront. The document is there as a target, and 2050 is a long way off.
The right reverend Prelate asked us to raise the subject of nuclear risk assessment, particularly in the flood areas. We can do no more than consult the experts, who have laid out the agreement up to the year 2100-hopefully, I will still be alive then-which is the timeframe within which the flood assessment is contained.
He also mentioned carbon counting, an issue that he has raised before, and I am grateful for that. There is a suggestion that the IPC should be responsible for carbon counting. We think that the Government's policy in this area is perfectly adequate. Obviously it is something that we have to take seriously and, as with all these things, I will take the right reverend Prelate's suggestions away and consider them further. With regard to his comments on China; yes, these issues have been raised with the Chinese delegation at a private meeting with the Secretary of State as well as through the Prime Minister's Office.
There was the issue of the gap between planning applications and the IPC and when that will happen; the noble Baroness asked about that as well. As my noble friend Lord Jenkin said, we are grateful that the IPC has thoroughly co-operated in this process, and it is to be commended. In fact, I think that my noble friend went public in saying that it should co-operate with us, and I am glad that it has taken on board what he has suggested. There are two planning applications for power stations that are likely to be approved by the IPC, but anything other than that will be in this interregnum period, which looks like being a fairly smooth process.
My noble friend Lord Jenkin, eruditely as always, asked a number of questions on the issue of offshore and onshore. It is our belief, and I think it is a Conservative tenet, that market forces are best placed to determine how the two marry up together. I have referred to that, and I will do so again at a later stage.
The noble Lord also mentioned shale gas, as have a number of noble Lords. We welcome shale gas, of course; if it reduces the price of gas, that will be fantastic. There are no signs as yet that the Americans are going to supply it to the outside world, as they are intending at the moment to keep it within their own country, but anything that reduces the price of gas will be of great benefit.
I have mentioned parliamentary process, but will now mention it in more detail. I am not going to try to second-guess the parliamentary process regarding these national policy statements. It is not for me to do so; I am only a young whippersnapper in this world. But the changes that are being made through the Localism Bill will give the opportunity, within a 21-day period, for people to register their amendments, and then there will be a vote on them. The difference between now and then is that that vote will be binding, whereas before it was not worth the paper it was written on. If you add that to the general consultation that we are having through these various debates and parliamentary issues, I feel confident that all noble Lords will recognise that we are having our say. The Energy Bill is starting in this House, where it will be honed, argued over, debated and made fit for purpose. That shows the intent of the Government and the recognition of the excellent contribution that noble Lords make here.
My noble friend Lord Jenkin raised a number of other issues. I will be happy to discuss them with him afterwards or put them in writing to him. Some of the issues refer to nuclear and I will deal with them, if I may, in the nuclear debate, on which I notice his name is down to speak. He asked why we have an interim milestone of 2025. We have to have interim milestones; we have to have something that most of us can believe we will actually see, and 2025 is a perfectly reasonable figure.
I was disappointed that the noble Lord, Lord Judd, was not as complimentary as he might be, although I took some of the serious and excellent comments that he made on board. I take no persuading of his view on overhead power cables; in fact, when I was a parliamentary candidate I was asked what was the one Private Member's Bill that I would introduce and I said the removal of overhead cables, so he is preaching to the converted. Of course the CPRE is an excellent organisation, and we listen to it with great intent-well, I do, anyway.
I really think that the noble Lord has got the wrong end of the stick on the Holford rules. I want to read something that I read earlier, paragraph 2.8.5 in EN-5:
"Guidelines for the routeing of new overhead lines, the Holford Rules, were originally set out in 1959 by Lord Holford, intended as a common sense approach to the routeing of new overhead lines. These guidelines were reviewed and updated by the industry in the 1990s, and the IPC should bear them and any updates in mind as they examine applications for overhead lines".
It goes on to list what the Holford rules state-on pages 12 and 13, for those who have the statement-and then continues:
"In considering whether all or part of proposed electricity lines should be placed underground to obtain the benefits of reductions in landscape and/or visual impacts, the IPC will need to weigh the reductions in visual intrusion against the impacts (economic, environmental and social) and technical challenges of undergrounding".
That seems to be a common-sense approach.
Lord Judd: I am grateful to the Minister for giving way, and it is wonderful to have his emotional sympathy for the general drift of my commitment, but can he spell out what he understands by the injunction to "bear in mind", in terms of actually achieving a situation in which we can be confident that these things will prevail?
Lord Marland: I look to the opening words, which state that the Holford rules were,
In other words, it was a very 1959, laissez-faire rule. What we are doing is hardening the rules. We are not giving anything away on them. We have merely said that the Holford rules should apply, but if there are implications in terms of whether it is not geologically feasible to put lines underground, the rules should be borne in mind for the same reason as the noble Lord, Lord Deben, said-the cost. We cannot impose unrealistic costs just because we are completely determined, as the noble Lord, Lord Judd, and I are, to place those lines underground. However, I assure him that he has my greatest support and sympathy, and I have taken on board what he said. I shall fight the good fight, as he will, on these issues.
I am also grateful for the noble Lord's point that we have to consider the future of our society. That is fundamental, and it is something that your Lordships' House takes more seriously than most, because we take a long-term view of these things. What the noble Lord said was very important.
My noble friend Lord Reay is well known for his views on onshore wind. I cannot comment on whether I share them or not, because onshore wind is a government policy. However, I am always interested in his views. He asked some good questions. Onshore wind is part of a mixed portfolio required under our 2050 pathway if we are to supply this country with twice the supply that it needs today. Onshore wind supplies not a significant amount but a relevant amount. We know where the significant amounts of supply will come from, and we talked about them earlier. We want to be very careful about getting sidetracked into the smaller aspects of supply and concentrate our firepower as a Government on the major things, such as new nuclear, CCS and converting our waste into something much more effective.
Of course, onshore wind has tremendous support in certain parts of the country, particularly in Scotland and Wales, where local communities have come together and determined that there are benefits. Equally, a huge number of communities in England do not see the financial benefits to them. Luckily, we have rigorous planning procedures which ensure that fair play is maintained.
The noble Lord asked what the effects are on the CCR requirement and what extra costs there are on the companies for fulfilling it. There are no delays at the moment because everyone who applies for CCS is just buying the land next to them. There have been no problems with approval on that. The only extra cost is that of purchasing the land. I have mentioned two or three good points about CCS and the Holford rules, with which I hope the noble Lord is satisfied.
As far as the Met Office is concerned, the Government should review several things. First, should we be the owners of the Met Office? There are compelling reasons for the Government not owning an institution, and I am on the PEX-A committee which is reviewing whether the Met Office and its advice should be owned by the Government. However, people tell me that there is only one nation in the world that does not own its own meteorological office and that is Malta. That would be an interesting combination.
I am disappointed that the noble Lord, Lord Crickhowell, did not applaud me to the rooftops for the changes that we have made on LNG and siting. We have made great strides and have listened carefully to what he has said, as I said in my opening speech. The noble Lord, who is an expert in this field, notes that this is a complicated area. There is no single legislative body and there are many different licensing conditions. Clearly, the Government are absolutely adamant that safety at all standards must be maintained. We have the best health and safety standards in the world. On the pipelines, he raises the very good point that standards should be maintained and constantly reviewed. Lessons should be learnt from the BP incident in the Gulf of Mexico. We are reappraising standards rigorously. Perhaps the noble Lord is going to applaud me to the rooftops.
Lord Crickhowell: Clearly, we are not just dealing with the safety of individuals and property. The security of our whole energy policy is dependent on these facilities being safe. However, I hope that the Minister and his colleagues will look again at the possibility of referring to offshore LNG facilities, rather than taking the view that these facilities must in future always be close to centres of population with long pipelines. Examples from other parts of the world should guide us here.
Lord Marland: As I said, the noble Lord has great knowledge in this area and we take on board what he has to say. I am perfectly happy to discuss this with him later to see how we can improve. It is a complicated area, as the noble Lord knows.
I will deal with the issue, raised by the right reverend Prelate the Bishop of Chester, of nuclear subsidy. The Government do not intend to provide a subsidy for nuclear because it is a very mature market. Subsidies should be for new technologies, which we can pump-prime to generate electricity. Of course we should maximise our resources in oil and gas, but we should also husband them because they do not last forever, as the noble Lord, Lord Deben, said. That requirement is satisfied. We have just granted licences in the Shetlands to allow new oil drilling to happen.
I thank the noble Lord, Lord Oxburgh, for answering half my questions and the noble Lord, Lord Deben, for his sage-like remarks and for laying out the landscape
11 Jan 2011 : Column GC148
I will be as brief as I can in answering the noble Baroness, Lady Smith, whom I thank for her co-operation. She asked about the Localism Bill and what is material in the Secretary of State putting a matter to the vote. I am not the arbiter of what is material and neither is she. We all know in our heart of hearts what is material and what we would expect. We will bring the usual pressures to bear through the other place or here to make sure that anything material gets debated because of the cross-relationship.
I mentioned earlier our reason for abolishing the IPC. The noble Baroness asked me to talk about the green investment bank, which is complicated. We have committed money to it. It is being set up primarily to commit to new technologies. We are investing taxpayers' money and other banking institutions' money in it. Therefore, there will be a rigorous test of whether it is a profitable enterprise. It is not a giveaway bank; it is an investment bank. However, it is an investment opportunity that will be available to people with new technologies to help them develop, provided they have a profitable end to them. We are not in the business of unprofitable enterprises.
The need case that was referred to is set out clearly in the 2050 Pathways Analysis, which is a very substantive document. If the noble Baroness would like to discuss issues on that after the event, I am very happy to do so. She also mentioned Renewables UK, the "dash for gas" and all those sorts of things. We need to have a broad portfolio in order to achieve our 2050 pathway, which is an enormous task. There is no point in saying, "I don't like that, and I don't like that". We have to like it all because we need it, and we owe it to the next generations among us here to provide it. We cannot say, in our own isolated world, that we think this and we think that. We owe it to the next generations to deliver their requirements in a low-carbon, secure-energy framework. That is why I commend these NPSs to the Committee.
Baroness Smith of Basildon: I thank the noble Lord for the time and care that he has taken to address many of the questions asked of him today. Perhaps I can press him on one point that I do not think he was able to answer. He said, in response to the comments of the noble Lord, Lord Crickhowell, that he would look at it again and take it back and discuss it with colleagues. If he were to do that and if changes were made to the national policy statement as a result, would that have to go through another round of consultation and another revised document, or could it be inserted as a result of the consultation and before it was put to a vote in the House of Commons?
Lord Marland: This matter goes to the House of Commons for a vote, where they can vote. It will happen in the spring. They are perfectly entitled to have amendments put in there for consultation. It may or may not be feasible that the comments of the noble Lord, Lord Crickhowell, will be something that the Government want to achieve. I am happy to explore them with him, as one would with any development of
11 Jan 2011 : Column GC149
That the Grand Committee do report to the House that it has considered the Revised Draft National Policy Statement for Fossil Fuel Electricity Generating Infrastructure (EN-2).
That the Grand Committee do report to the House that it has considered the Revised Draft National Policy Statement for Renewable Energy Infrastructure (EN-3).
That the Grand Committee do report to the House that it has considered the Revised Draft National Policy Statement for Gas Supply Infrastructure and Gas and Oil Pipelines (EN-4).
That the Grand Committee do report to the House that it has considered the Revised Draft National Policy Statement for Electricity Networks Infrastructure (EN-5).
Committee adjourned at 5.53 pm.
|Next Section||Back to Table of Contents||Lords Hansard Home Page|