South West Marine Energy Park

Wednesday 29th February 2012 Westminster Hall

16:30

[George Eustice (Camborne and Redruth) (Con)]

It is a pleasure to serve under your chairmanship for this debate, Mr Betts.

Looking back through some of my notes, I was reminded that a little more than a year ago, on 15 February 2011, we were last in this Chamber to discuss marine energy in the south-west, in particular in Cornwall. I am pleased that quite a lot of progress has been made over the past 12 months. In my speech last year, I referred to the renewable obligations certificate and how in Cornwall we needed to be given five ROCs, as Scotland has, and I am delighted that the Government have made some strong moves in that direction. We talked about the importance of focusing on and joining up the infrastructure in the south-west, and the decision to have a marine energy park in the south-west brings some of those ambitions to fruition. We talked about the importance of funding to bridge the risk and potential for wave-power projects, and a number of device developers have benefited from some Government support to establish their devices.

A great deal has been achieved, therefore, although I was reminded that it has happened not only in the past 12 months. In the summer of 2009, we talked about the potential for a marine energy park in Cornwall, when the Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Bexhill and Battle (Gregory Barker), then the shadow Minister, first came down to Cornwall, to the Tremough university campus. I was talking to someone in Cornwall recently who said, “Are you doing this then? When you said that, we thought it was only a story. We didn’t think it was actually going to be done.” So it is good to see that, in this Parliament, the Minister is delivering what he said, and we welcome that.

My constituency is home to the Wave Hub project, which is the central element of the new marine energy park. It is the first test facility of its type in the world, and it enables us to test commercial-scale arrays of marine energy devices. The smaller FaBTest project in Falmouth bay is linked, and the two facilities are at the heart of the marine energy park, so I have a direct interest in seeing it work. The facilities are supported by a strong supply chain in Devon and Cornwall, a strong university at Plymouth, which does a lot on marine biology, and the academics at the university of Exeter and the Camborne school of mines down at Tremough, which is doing a tremendous amount of work on researching moorings and other issues.

Since our debate a year ago, two device developers have signed agreements to plug into the Wave Hub facility off Hayle: Ocean Power Technologies, with Government support, is developing a device that we hope will deploy next year; and later this year a new entrant, Ocean Energy, hopes to deploy its device.

Before I move on to the main thrust of my comments, I want to talk about the marine renewables deployment fund and its importance. The Minister has already suggested that he anticipates that about half the £20 million set aside by the Department to encourage green energy will go to wave power. In response to a recent question that I asked, he said that he expected a significant sum to come down towards my part of the world, which I welcome. I understand the reluctance to commit in a rigid way, because the Department wants to keep its options open. With a number of people asking what the marine energy park delivers, however, an important principle to establish is that projects in such a park should at least be given some priority treatment in attracting funds to develop the deployment of marine devices. Wave Hub still has two berths left on its device, and we are anxious to attract additional device developers.

Another area that will be equally if not more important to the success of the marine energy park is removing some of the barriers that currently confront developers. That has always been one of the key issues that we wanted to see dealt with in a marine energy park. How can we simplify the consenting process? How can we make consultation less onerous than, frankly, it is? In doing so, we need to consult closely with the Minister’s colleagues in the Department for Environment, Food and Rural Affairs, because a lot of the decision making is by the Marine Management Organisation. The Crown Estate also has quite a big role to play. I want to argue that we should learn lessons from other countries in the world—in particular, Norway, which has a fantastic track record in adopting a pragmatic approach to device developers and not standing in their way. A few comparisons of what we do for marine device developers in the UK and the approach in Norway might be useful.

First, on the application process, in the UK a developer has to apply to the MMO for all construction, all alteration or any improvement of any works affecting the sea bed. That includes all renewable energy projects, unless they are huge and much larger than what we would be talking about in marine energy at this stage. Compare that with Norway, where simply the local municipal authority or, in some cases, the regional coastal authority makes such decisions.

On leases, in the UK developers need to get a lease for the sea bed for any fixed structures, including any anchors, even before they can deploy a test device. Leases are always needed from the Crown Estate, and they are negotiated on commercial terms. Compare that with Norway, which has no specific need for a sea bed lease—in particular, for small test devices—and a much more pragmatic approach is taken. Devices with temporary anchorage or deployment are deemed to have a low-risk impact, so there is no need for a sea bed lease, which is a considerable cost saving.

[Dr Sarah Wollaston (Totnes) (Con)]

Does my hon. Friend accept the importance of the marine energy park to companies in our west country constituencies, certainly in my constituency? The Searaser device, invented by Alvin Smith who lives in Dartmouth, is being developed locally, so there are huge implications for him. He is pleased to have a marine energy park that he can use for sea trials.

[George Eustice]

I certainly agree. I hope to achieve in the debate some progress on what we want the marine energy park to deliver. My hon. Friend is right that such marine energy developers are taking considerable risks. They are pioneers of the industry and are expected to invest large sums of money in development. The least that the Government and their agencies can do is to get on and make things as easy as possible for them as they develop those pioneering ideas. I completely agree with her point.

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Gentleman for bringing the matter before the House today. In my constituency of Strangford—in particular, with SeaGen at Portaferry—there have been successful trials of harnessing wave and tidal movement at the narrows of Strangford lough. Does he agree that there could be an exchange of information from different regions in the United Kingdom? In this case, what we have learned in Northern Ireland might be of advantage to those in England.

[George Eustice]

Indeed. The more we join up such academic research, the better. I know that EMEC—the European Marine Energy Centre—in Scotland worked closely with our academics at Tremough. I would be delighted to see us also working with academics in Northern Ireland, to ensure that we learn the lessons that they have learned.

Another area in which there is a big difference between Norway and the United Kingdom is consultation, which is onerous in the UK. The process in the UK is clearly defined, first a pre-screening consultation with the MMO and then a formal environmental assessment, which is the screening and scoping element. After that there is all the documentation preparation, with a series of environmental statements, and only then the formal application, which is followed by a whole bout of consultation, feedback and mediations to adjust things. Only then can there be a licence determination, after which there is a wait for the licence to be issued, which may cause problems and take time. Then, there are management returns and monitoring reports, and finally the process of decommissioning and proving compliance. The consultation procedure is very complicated.

Let us compare the procedure with that in Norway, which takes a much more pragmatic approach. The handling authority may choose to consult with other bodies, such as fisheries organisations or harbour authorities, but the consultation is loose, pragmatic and sensible. Typically, it takes no more than four weeks. On the environmental assessment here, the MMO must decide in every case whether there should be an assessment, whereas in Norway there are formal environmental assessments only for pre-defined and designated environmentally sensitive areas. In all other cases, self-assessment is generally the guiding principle. Here, the Crown Estate frequently insists on onerous requirements for insurance for decommissioning, but there are no such formal requirements in Norway. There are no application fees in Norway, where the process is completely free because it has maintained a light-touch system.

What happens here in the United Kingdom? Two hours of free pre-application advice is the most that is available, and after that advice is charged at £80 a hour to device developers. An application typically costs from £7,200, which is a huge additional cost. There is also a time implication. In the UK, an application to deploy might typically take nine months, compared with just one month, or three months at the outside, in Norway.

We can learn a lot from Norway. Clearly, we have different structures here. We have the MMO, with which we must work. I want to spend a few minutes reflecting on how to incorporate into our approach some of the lessons from Norway. First, could we not require the test facility operator to be responsible for deploying test devices within its test facility? The important point is that there is a lot of duplication. Wave Hub and FaBTest have had to go through the onerous screening, scoping and consultation processes. If someone wants to deploy a device on that test facility, they must go through the same process again. There is a lot of duplication, and giving authority to test facility operators would be the equivalent in Norway of giving harbourmasters greater control.

Secondly, can we simplify the consultation process within the test areas, given that they have been through huge amounts of consultation and screening? Let us remove the need for the screening and scoping stage because, again, it duplicates work that has already been done. The estimates suggest that, if just that element were removed, three months would be chopped off the application time. If the Norwegian authorities can agree the deployment of these devices in just a month, or three months at the outside, let us set a more stretching and challenging time scale for the MMO. Let us not allow it to sit on projects, letting them stew for months on end, and allowing matters to drag on for nine months. Let us tell it that we expect it to deliver within a month or two months.

Finally, we must enable the MMO to exercise more judgment, particularly on minor alterations to deployment. Sometimes, when a device developer is ready to deploy, it may decide that it needs to change a small aspect of its deployment. At the moment, it must go back to square one and go through the complicated consultation procedure again. The MMO must then consult with other people again, even when that is unnecessary because the suggested change is quite small. The ability to close out consent conditions would be more sensible, and the MMO could exercise judgment without necessarily having to return to the statutory consultees over and again.

Those are technical points, but if we are to make the marine energy park work, a key component is dismantling the barriers that stand in the way of marine energy developers. They take tremendous risks to pioneer an industry. Sometimes, they invest tens of millions of pounds to develop the technology. The very least that the Government can do is to make sure that Government-controlled agencies get off people’s backs and allow them to get ahead and to make a success of the industry.

16:45

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

I congratulate my hon. Friend the Member for Camborne and Redruth (George Eustice) on yet again securing a debate. He is an extraordinary champion of marine power in the south-west. It is no discourtesy to any of his colleagues in the region to say that he has undoubtedly been the most tenacious champion over a number years, and preceding his time in the House, in encouraging the formation of marine energy parks, and driving in the Conservative party an ambitious transformational approach to harnessing the power of the sea. He previously secured a Westminster Hall debate on funding for wave power, and his constituency is home to the ground-breaking Wave Hub testing facility for wave energy devices, which remains an important vital component of the South West Marine Energy Park.

I commend my hon. Friend the Member for Totnes (Dr Wollaston) for her comments and interest, and the real and growing interest in her constituency. I also commend the hon. Member for Strangford (Jim Shannon) for his comments; I look forward to visiting Northern Ireland to see for myself the huge potential for marine energy, and some of the exciting developments there.

[Jim Shannon]

The Assembly in Northern Ireland, which has devolved responsibility for this matter, has just concluded legislation on marine technology, so it might be possible to take advantage of that, because people will be eager to tell the Minister what we have done.

[Gregory Barker]

I look forward to opening the post. During the next few minutes I will endeavour to answer in detail the points that my hon. Friend the Member for Camborne and Redruth made. He gave a serious critique of the progress we are making, and the progress that we could make if we improved further the marine energy park and the processes underlying it. If I am unable to give an immediate response, I will write to him, and I will study and reflect on his important points and examples. He is an important voice on this agenda, and I assure him that we take it seriously.

Alongside the other UK marine energy testing facilities at EMEC in the Orkneys, and the marine drive train testing facility that is opening in the spring at the National Renewable Energy Centre—NaREC—in the north-east of England, Wave Hub helps to give Britain a unique offer to this emerging sector not just in the British Isles, but globally. Here in the UK, we continue to be a global focus for an important long-term global industry. It is vital to maintain that competitive advantage, given the significant and increasing interest in other parts of the world. I am constantly looking at how to push forward that agenda in partnership with the industry.

Combining the world-beating testing infrastructure that we have in the UK, particularly in the south-west, with world-class academic expertise, and the funding stream for marine energy, which I will talk about briefly, the coalition has created in the UK the most attractive environment for developing marine energy. It is still a nascent industry, but we believe that it is now the most encouraging environment anywhere in the world, and I am very proud of that.

Before I say anything about today’s topic, let me use this opportunity to welcome the report from the Select Committee on Energy and Climate Change on “The Future of Marine Renewables in the UK”, which was published last week. It underlines the great potential benefits that development of a thriving marine energy sector can bring to the UK, and recognises the coalition’s work to support development of the sector. When I spoke to the Committee last year, I underlined the Government’s determination to grow a thriving marine sector, building on Britain’s wealth of experience and expertise. We will carefully review the report and respond to its recommendations in due course.

I appreciate the concerns voiced by my hon. Friend. He has been a champion of this agenda in the past and it is right to listen to his concerns and take them seriously. I assure him that the Government are fully committed to maximising the benefits that the wave and tidal sectors can deliver. That commitment is explicitly underlined in the coalition agreement, and I am committed to ensuring that it is delivered.

I want to know if there are inefficiencies in the system, and I always look with interest at other models from abroad, or at best practice wherever it is found, to see how that can help to improve the design of our emerging marine economy. That is why I established the marine energy programme board, which brings together the Government, regulators and the marine energy sector. The programme is a vehicle to drive through ambitious changes that will enable marine energy to prosper, including by streamlining the leasing and licensing processes. The network of marine energy parks that we are creating around the UK will be another vital tool for driving home success on the ground.

Last month, I was delighted to be invited to visit the south-west and launch the first marine energy park, which received widespread positive coverage in the press. As hon. Members may know, marine energy parks are central to the Government’s goal to transform prospects for the sector, and they are something that I championed both in government and opposition.

Although wave and tidal technologies are very different, the clustering of activities through marine energy parks can help to drive the required innovation and growth in the sector, in a way that is not dissimilar to what clustering in silicon valley did, and continues to do, for the IT industry. Last year, I challenged the south-west to develop the UK’s first marine energy park. The expertise in the south-west, and the region’s commitment to developing wave and tidal energy, meant that it was among the first to successfully create such a park. I commend the south-west, and in particular its MPs who have been driving the agenda, on the dedication and willingness that has been shown in delivering this outstanding work, and on everything that has been done to turn the vision into reality. It is gratifying to see that the south-west is already using the marine energy park as a way of fostering co-operation and collaboration between sector players in a co-ordinated action to maximise opportunities open to the region, whether by encouraging investment or by maximising access to funds at Westminster or even European level.

I touched earlier on the marine energy programme. Working with key industry and Government stakeholders on the programme board, we can focus on the real issues facing the sector and show the leadership that is needed to tackle the barriers that impede development, and drive the sector forward. I am not complacent about the need to remove more barriers and create a glide path to deployment, which is why I take my hon. Friend’s points so seriously.

One of the first major tasks to which the marine energy programme board contributed was the review of the renewables obligation banding. The evidence that members of the board fed into the review through the board’s finance working group was invaluable, and led to the consultation proposal for enhanced levels of revenue support for wave and tidal stream to five renewables obligation certificates per megawatt, subject to a 30MW project cap.

The consultation on the proposed banding is now closed, and although I am obviously unable to prejudge the final outcome of the review, the work will stand us in good stead when reaching the right decision about the level of ROCs needed to take the sector through to early commercial-scale deployment. The Government’s response to the consultation will be published in spring.

Our work with the sector through the programme board has demonstrated that as well as revenue support, the sector needs capital investment if it is to move towards commercialisation. I therefore announced last June that following the success of the £22 million marine renewables proving fund, the Department of Energy and Climate Change has also allocated up to £20 million for the development of pre-commercial wave and tidal arrays. I remind hon. Members that that funding represents a significant proportion of the overall DECC innovation funding allocated for the spending period at a time of severe retrenchment and austerity, so it is a good outcome for the sector.

My officials have been working with the sector on designing the marine energy array demonstrator fund, or MEAD. The overall framework of the scheme is nearing completion, and we envisage that it will be open for applications this spring. More recently, there has been a welcome announcement of additional funding from the Scottish Government. It is important, however, that that funding complements the support already put in place by DECC, the Energy Technologies Institute, the Technology Strategy Board and others, as well as the opportunities presented by the EU new entrants reserve. My officials are working with their Scottish Government counterparts to ensure that funding is complementary, used effectively, and offers best value for money. However, the success of the industry does not rest solely on financial support.

We have also made progress on planning and consents—a point close to my hon. Friend’s heart. In particular, DECC completed the offshore energy strategic environmental assessment for wave and tidal energy in English and Welsh waters last year. The SEA complements the existing work for Scotland, Northern Ireland and the Severn estuary, and opens up suitable sites across the UK for consideration concerning the potential deployment of marine energy devices.

My hon. Friend raised concerns about the Crown Estate, and I will take them on board when I further consider his remarks. We should not, however, overlook the work that the Crown Estate is doing with the sector to enable commercial-scale deployment. At the end of last year, the Crown Estate launched a tidal stream leasing round in Northern Ireland, which followed the success of the world’s first commercial-scale wave and tidal leasing round, in which the Crown Estate leased 11 sites in Scotland’s Pentland firth and Orkney waters, which could extend to 1.6 GW of capacity.

Work is already under way to consider how the practicalities of sea-bed leasing can be best approached. Later this year, the Crown Estate plans to run a consultation with industry on future wave and tidal leasing, which will be informed by work that it is undertaking to clarify the size and distribution of wave and tidal energy resources across the UK. Leasing for small test deployments is currently dealt with case by case through a newly set up fast-track process. Such deployments should not be subjected to the same complexity of process as larger, commercial-scale deployment, and I would be keen to hear whether that is the experience of stakeholders.

On licensing and planning, we need to build on the work that has already started in Scotland to ensure that a coherent and efficient system of planning and consenting is adopted across the UK. I have asked the Marine Management Organisation, and Marine Scotland, to work with the sector to look at ways of ensuring that the licensing process is as efficient as possible, while maintaining the necessary level of protection for the environment.

The Department for Environment, Food and Rural Affairs is reviewing the implementation of the birds and habitats directives, which are important environmental directives that affect the renewable energy sector. The views of the offshore renewables sector are being fed into the review, so that the right balance between efficient deployment of marine energy and the safeguarding of our marine habitat can be struck. I will, however, take on board my hon. Friend’s comments about Norway.

[George Eustice]

At the start of my speech I noted that the issue also involves DEFRA. Would the Minister be willing to meet the chief executive of Wave Hub, the Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon) and me to thrash out the detail of some of these problems, which he could then feed into the programme board?

[Gregory Barker]

That sounds like an excellent idea. Obviously, I cannot commit my hon. Friend the Under-Secretary of State to that, but he is an amenable chap and I am sure that, subject to our diaries, we can work something out.

We have achieved a lot since our last debate on wave energy, but I recognise that there is much more to be done and we do not intend to rest on our laurels. Over the coming months, the Government will continue to work on a number of priority areas. It is important to ensure a place for marine energy within electricity market reform proposals, and the next meeting of the marine energy programme board will be in Scotland in the summer. There is a lot more to do, but the Government have a lot of ambition. I am grateful to my hon. Friend for his continued enthusiasm and support for this exciting agenda.

Question put and agreed to.

16:59

Sitting adjourned.