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899 National Policy Statements 1 DECEMBER 2010 National Policy Statements 900 [Charles Hendry] policy statement or to introduce one specifically for marine technologies. In this country, we have a network of rivers, which are a potential source for electricity generation that we are keen to see harnessed. Ian Swales (Redcar) (LD): The Minister has discussed the urgent need for new renewable electricity generation capacity. If that is the case, why is the banding review of renewables not reporting until August 2012 with implementation in March 2013? Will he consider speeding up that process, so that we can get the capital that is waiting for, for example, biomass power stations released and get such projects under way? Charles Hendry: One of the issues for investors in this area is certainty. They want to be able to plan for the long term and to know what rate of support they will get under whatever mechanism is in place. A date of 2013 enables people to plan a transition to whatever the banded level will be after that. I understand the need for early clarity, and if there are ways we can provide that, we shall seek to do so. We seek to work constructively because we understand that the alternative can be a hiatus in investment, with investment dropping off for a period of years in advance of the threshold and the level of support changing. It is important, in terms of national interest, to have a continuous flow of investment. I turn now to the issues that have been covered in the energy national policy statements. Perhaps it would be helpful if I briefly set out the purpose of the documents before us today. The revised draft energy national policy statements consist of a suite of six national policy statements and a number of associated documents. They are not intended to set out new energy policy. They are consistent with and explain current energy policy and how it relates to the planning consent process. Similarly, we are not using national policy statements to change the standard for consenting projects. They neither raise nor lower the bar on how a major energy infrastructure project is examined and consented. They are there to explain how such decisions should be made. They set out the consenting policies that need to be considered in the examination of major energy infrastructure and the decision on whether to grant or decline consent. At the same time, they will ensure that new major energy infrastructure projects respect the principles of sustainable development. They will allow not only the Infrastructure Planning Commission but developers and local residents to see the basis on which applications must be considered. There is an overarching energy national policy statement that sets out the Government’s policy on energy and energy infrastructure development; an energy need statement on the need for new nationally significant energy infrastructure projects; the assessment principles that need to be taken into account in examining and deciding on proposals for energy infrastructure development; and generic impacts for all energy infrastructure, and how they should be assessed and mitigated to ensure that the right balance is reached between securing our energy needs and protecting the environment. There are also five technology-specific energy national policy statements, covering fossil fuel electricity generation; renewable energy infrastructure, which deals with onshore wind, offshore wind and energy from biomass and/or waste; gas supply infrastructure and gas and oil pipelines; electricity networks infrastructure; and nuclear power generation. David Morris (Morecambe and Lunesdale) (Con): We know that we are legally required to reduce carbon emissions by about 80% in the next 40 years. Can we fulfil that requirement, given that of the 59 GW of new capacity required in the next 25 years, 33 GW of which is needed from renewables, we have only 2 GW currently under construction? The other 26 GW that is needed will, presumably, come from low-carbon nuclear. The Government have made enormous progress in this area—I acknowledge that—but would there be more scope to look at nuclear if we, for whatever reason, did not hit those targets? Charles Hendry: I pay tribute to the work that my hon. Friend has done as an ardent supporter of the Heysham plant in his constituency and of the case for a new plant in that area. The role for nuclear has been set out clearly in the national policy statements. We believe that it has a fundamental role, but we also have to be realistic about what is achievable. We have identified sites that could be used for 16 GW of new nuclear power, but that is as much as the energy companies believe can be constructed over the next 15 years, which is the time scale that the national policy statements cover. That is not necessarily the end of the ambition, but it looks like what is achievable and realisable over those 15 years. There is no doubt about the Government’s ambition in terms of new nuclear. Martin Horwood: On the subject of what is realistic, and referring back to what the Minister was saying about sustainability, is he aware that the Chartered Institution of Water and Environmental Management has said that current known reserves of economically extractable uranium may last only between 40 and 85 years? Given that other economies are also investing in new nuclear, we may be looking at the lower end of that scale rather than the higher, so new nuclear cannot be regarded as sustainable in any real sense. Charles Hendry: I have certainly heard that point before. The OECD has a fundamentally different view of the availability of uranium stocks, and there is work to be done in plutonium reprocessing, which would provide an additional source of fuel. Furthermore, work is being done on the development of thorium reactors, which do not give rise to many of the concerns that people have about uranium reactors. A great deal of progress can be made and, at the end of the day, the decision is for investors to make. If they do not believe that there is sufficient uranium to power their plants for their lifetime, they will not make that investment. They will base their decision on the facts available to them and they will need to be reassured about the availability of stocks. The overarching national policy statement contains information on the impacts that need to be considered for all energy infrastructure, while the technology-specific NPSs contain additional information on the impacts that are specific to each technology. They take into account the appraisals of sustainability. We have revised the AOSs for the non-nuclear NPSs substantially, which is why we are a carrying out a fresh consultation.
901 National Policy Statements 1 DECEMBER 2010 National Policy Statements 902 We believe that the revised appraisals put readers in a much better position to evaluate the revised draft NPSs. The revised AOSs give a clear picture of the likely significant impacts at the strategic level of consenting energy infrastructure projects in accordance with the NPSs, by reference to a wide range of relevant environmental, social and economic factors. They also explain more clearly why we have not chosen a number of alternative policies that others proposed, but which would not have been as good in meeting our overall objectives of maintaining safe, secure and affordable energy supplies while moving to a low carbon economy and reducing carbon emissions by 80% by 2050. We have made significant changes to the statement of need in the overarching national policy statement. It now includes research that was not available for the first draft, including more detailed analysis of scenarios to achieve an 80% reduction in carbon emissions by 2050. We have also included more detail on what is required for an economic feasibility assessment to ensure that fossil fuel generating stations are carbon capture-ready. Neil Carmichael: The NPS gives great support to those of us who support a green investment bank because it provides a framework for investment, which is necessary to the platform of support that investors might require. How important does the Minister think the green investment bank will be in delivering some of the outcomes? Charles Hendry: The Government have committed £1 billion to the green investment bank, with additional funding to follow in due course. I am extremely pleased that the Environmental Audit Committee is to examine how the bank might work. Infrastructure banks in other countries—for example, the one in Holland, which was funded with ¤2 billion of initial capital, but brought in ¤100 billion of additional finance—can play a critical role, particularly in getting business through the so-called valley of death. Returning to the technology-specific NPSs, we have revised the fossil fuels policy statement—document No. 2—to clarify the requirements for carbon capture readiness in terms of technical and economic feasibility in line with the request made by the Energy and Climate Change Committee. Ian Lavery (Wansbeck) (Lab): On carbon capture and storage, will new applications for gas-fired power stations be treated the same as applications for new coal-fired power stations in that they will have to be carbon capture-ready before they can be accepted at the planning stage? Charles Hendry: A new coal plant will have to be equipped with some degree of carbon capture and storage capability—we have made it clear that there will be no role for unabated coal in the future—whereas a new gas plant will have to be carbon capture-ready, because of the much lower levels of emissions associated with modern gas plants. Emissions from the most efficient coal plant are perhaps 750 grams per kWh, whereas the figure for the most sophisticated gas plant is perhaps 350 grams per kWh. Given the significant difference in emission levels, we are looking at requiring CCS to be part of the programme. That is why we have allocated £1 billion, which is more than any Government anywhere in the world have allocated to a single plant. We are keen to take forward the development, but we have also said that as part of the subsequent pilot projects 2 to 4, we are keen to see whether that can be applied to gas. Ian Lavery: The Minister said that £1 billion had been invested in the carbon capture and storage programme. There were four initial demonstration plants, the first of which is to be a coal-fired demonstration plant. The contract will be awarded, I believe, in December 2011. Will that not take most of the £1 billion? If so, is he confident that moneys will be available to secure the phase 2, 3 and 4 carbon capture and storage projects? Charles Hendry: The hon. Gentleman makes an important point. The £1 billion is specifically and only for that project. As I said, that is more than any Government anywhere in the world have allocated to a single project. The additional plants will be funded either by the levy introduced in the Energy Act 2010, or from general taxation. We are looking at the best way forward in terms of deliverability and the Treasury is examining the issue. The funding of projects 2 to 4 is separate from the funding of project 1, which has the £1 billion available to it. The revised renewables NPS has taken particular account of comments on biomass sustainability for generating stations using biomass as fuel. We have also revised the text regarding noise from onshore wind farms, which is different from general industrial noise, so a specific assessment methodology is used to take that into account. The method of assessing noise from a wind farm is described in “The Assessment and Rating of Noise from Wind Farms”, known as ETSU-R-97. The report recommends noise limits that seek to protect the amenity of those living close to wind farms. The recommended noise levels are determined by a combination of absolute noise limits and noise limits relative to the existing background noise levels around the site at different wind speeds. Policy document 4 relates to gas supply and oil pipelines. We have clarified that the gas supply infrastructure and gas and oil pipelines NPS covers only oil and natural gas pipelines and not CO 2 pipelines, which will be an important matter in relation to carbon capture and storage development. We have also added a new section describing the impacts on gas emissions due to the flaring or venting of gas. Policy paper 5 relates to electricity networks. We have tried to make sure that Government policy on undergrounding and the need to treat each application case by case is expressed more clearly. I welcome the decision by the Institute of Engineering and Technology to make an authoritative investigation of the costs of undergrounding, particularly in relation to the issues that the hon. Member for Wells (Tessa Munt) has raised, so that we can have a clear fact-based assessment of the different costs involved. Tessa Munt (Wells) (LD) rose— Charles Hendry: I thought that might encourage the hon. Lady.
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