Revised Draft Overarching National Policy Statement for Energy (EN-1)

Lord Reay Excerpts

Tuesday 11th January 2011 Grand Committee

[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 questions over the extent to which the full practical potential can be exploited, given local opposition in some areas”.

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 applied for a guaranteed 20 years, whatever happens to subsidies in the future. In such a way has the green obsession resulted in the mortgaging of our future.

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”;

and this:

“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 expected completion date. I wonder whether the Government still hold faith in their own timetable. What is that timetable?

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?