National Grid (Montgomeryshire)

Amber Rudd Excerpts

Wednesday 4th February 2015 Westminster Hall

[The Parliamentary Under-Secretary of State for Energy and Climate Change (Amber Rudd)]

I congratulate my hon. Friend the Member for Montgomeryshire (Glyn Davies) on securing the debate. The need for and impact of electricity network infrastructure is an important and sensitive issue. I will, if I may, deal with that issue in principle, then come on to his specific questions, to which I will seek answers from my Department, if I cannot give them in the Chamber.

I welcome the opportunity to explain the need to upgrade the electricity network, and to clarify the approach to deciding where and how new infrastructure is delivered, and how that relates to my hon. Friend’s concerns about the impacts that onshore wind developments and associated networks can have on local communities. The Government are clear that onshore wind farms and the associated network connections must be appropriately sited, and that local communities should be properly engaged. The coalition Government are committed to meeting the UK’s climate change targets, maintaining energy security—with the appropriate siting, as I said—and delivering economic growth. Achieving those objectives represents a significant challenge.

The UK is increasingly dependent on fossil fuel imports, leaving us more exposed to risks from rising global demand, limitations on production, supply constraints and price volatility. At the same time, we expect to lose around a quarter of our electricity generation capacity by 2020, as old or more polluting generation plant closes. That is why we need a mix of energy for the future, comprising nuclear, fossil fuels with carbon capture, and a major roll-out of renewables. As well as onshore wind, we want to see expansions in offshore wind, solar power and sustainable bioenergy. The Government have set the framework for delivering the appropriate energy mix through, for example, electricity market reform.

Turning to onshore wind, which is the driver for National Grid activities in Montgomeryshire, we set out in the renewables roadmap and in the electricity market reform delivery plan our ambition for 11 to 13 GW of onshore wind by 2020. That must be appropriately sited. We are clear that local communities must be properly engaged and see real benefits from hosting wind farms. A declaration on community benefits from onshore wind has been signed by developers in Wales to ensure a consistent and transparent approach to the way in which they engage with communities. Wales is already seeing community benefit funds of £5,000 per megawatt per year. The Welsh Government have developed a community benefit register to ensure greater transparency and probity. It means that everyone will be able to see and track the impact of benefits to communities and to the wider economy.

In order to accommodate the new generation, we require such sources as onshore wind, but also others such as nuclear and offshore wind, and the existing electricity network will need to be expanded.

[Sir Tony Cunningham (Workington) (Lab)]

In Cumbria, on a number of occasions I have dealt with National Grid staff on new nuclear build. I have always found them to be extremely professional. When I have wanted them to do special consultations with farmers, for example, they have always done so.

[Amber Rudd]

It is reassuring to hear of the hon. Gentleman’s experience in Cumbria, although that has clearly not been the experience of my hon. Friend the Member for Montgomeryshire. I will suggest some possible remedies as I make progress.

[Tessa Munt (Wells) (LD)]

I have every sympathy with the hon. Member for Montgomeryshire (Glyn Davies), because of my constituents. Eight thousand people replied to a consultation, decrying what National Grid proposed, but it has been utterly high-handed in dismissing such concerns, and completely ignored the possibility of the power connections and the line being put underground or undersea. Technology develops, but National Grid has ignored it completely, much to the distress of my constituents. There are probably many similarities with the situation described by the hon. Gentleman.

[Amber Rudd]

I am not familiar with the particular example given by the hon. Lady, but I hope that the Planning Inspectorate would review the consultation process as part of its consideration. That is part of the inspectorate’s legal obligation.

I was discussing the need to upgrade infrastructure to accommodate renewables, which in part explains why National Grid is going ahead in Montgomeryshire and why the hon. Lady had her experience. Developers of new generation, however, need the reassurance that the network will be delivered in line with their project time scales, so that they are able to generate electricity once those projects are completed. We should recognise that such generation projects are substantial long-term investments, and timely network delivery is crucial to their viability.

Before I address National Grid’s activity in Montgomeryshire, it might be helpful to explain the wider approach to deciding on new network infrastructure. Under the current regulatory framework, it is for network companies, such as National Grid, to submit proposals for new network infrastructure to the industry regulator, Ofgem, and the relevant planning authorities. My hon. Friend the Member for Montgomeryshire made some interesting points about Ofgem’s potential concerns, and referred specifically to conversations with its chief executive. I assure him that I will follow up on this debate by writing to Mr Nolan to establish whether the formal position has moved, and will come back to my hon. Friend on that. Under the current set-up, proposals are based on a well-justified need case—say, the connection of new generation, or the maintenance of a safe and secure network—but it is important to us that Ofgem feels confident of the proposals.

The network companies also propose routes and types of infrastructure. In doing so they are required to make a balanced assessment of the benefits of reducing any adverse environmental and other impacts of new infrastructure against the costs and technical challenges of doing so, following extensive consultation with stakeholders. The requirements are set out in their licence obligations under the Electricity Act 1989: they must develop economic and efficient networks, and have regard to the preservation of amenity and the mitigation of the effects that their activities could have on the natural beauty of the countryside. The 1989 Act also stipulates that network companies must provide connection offers when requested to do so by developers.

[Albert Owen]

I agree with the wider strategy that the Minister has outlined, but on the specific issue of defined and suggested routes in the consultation, communities are frustrated by the fact that the suggested route always goes ahead with only fine amendments. Will she encourage National Grid and Ofgem to have some sort of community involvement or appeals mechanism? When the preferred route goes ahead, communities fear that their words and deeds are not taken on board.

--- Later in debate ---

[Amber Rudd]

I appreciate the sentiment expressed by the hon. Gentleman. His point is valid, and if the experience of hon. Members present is that the current consultation process is not sufficient, I will follow up on it. Some progress has been made: Ofgem has recently published information for stakeholders on how their views should be taken into account. That information clarifies that network companies are required to consider wider impacts and alternative solutions to overhead lines, as mentioned by the hon. Member for Wells (Tessa Munt).

[Daniel Kawczynski]

On the point that I made earlier about how far the site in Montgomeryshire is from the national grid, are the Government doing any work to look at the grid and evaluate how projects can be initiated closer to it, rather than so far away? Some sort of strategic work must be under way on that.

[Amber Rudd]

As I said earlier, National Grid is looking at the process as part of the preparation for potential new generation through wind farms. It has reviewed where the grid will be required, and then has to take its proposals to the Planning Inspectorate. The whole process is overseen by Ofgem. Obviously, my hon. Friend will be aware that although my Government have a policy role in encouraging the development of renewable energy and ensuring that it can be accessed, we do not interfere with planning, which is a very sensitive issue.

[Roger Williams (Brecon and Radnorshire) (LD)]

The important point made by the hon. Member for Montgomeryshire (Glyn Davies) was about the attitude of National Grid, which I experienced when a pipeline was being laid to take liquefied natural gas from Milford Haven to Gloucestershire. National Grid took no notice whatever of representations about the integrity of rivers and spawning areas—it was incredible. I think it is that attitude that gets people’s anger up.

[Amber Rudd]

Where there are particular examples, I urge hon. Members to write to me, and I will write to Ofgem. It sounds to me like there might be particular examples; that does not necessarily mean that the whole system is flawed, but it might mean that particular examples of insensitivity require some sort of redress. I will happily look into that for the hon. Gentleman.

[Tessa Munt]

I am grateful to the Minister for her generosity in giving way. Will she write to me on two specific points? First, there is the business of a “willingness to pay” study, which I believe has been carried out in Essex or Suffolk but not in other areas. That study has proven that, given the chance, people want new pylons and other infrastructure to be put underground. That should be done for existing pylons as well.

Secondly, the Government’s legislation says that there should be a social and environmental impact assessment. At no point have I or other Members been given any clarity on exactly what that entails. If the Minister could write to me to explain how that is implemented, that would be most kind.

[Amber Rudd]

I would be delighted to write to the hon. Lady and will take up the two points that she has raised. She is of course correct that it is possible to bury the cables; the cost is approximately 10 times as much, but that is obviously part of the consideration.

The regulatory approach to which I was referring and that is overseen by Ofgem is reinforced by the Government’s national energy policy statements. They set out the framework for factors to be considered when consenting to an infrastructure project of national significance. They make clear that for electricity networks, cost should not be the only factor in determining the type of network technology used, and that there should be proper consideration given to other feasible means of connection, including undersea cables.

Within the framework, National Grid, the transmission network owner in England and Wales, published a new approach to building new transmission infrastructure. Using that approach, National Grid puts greater emphasis on mitigating the environmental and visual impact of its new electricity lines, while balancing other considerations, such as the need to manage the effect on costs, which are of course ultimately funded through consumer energy bills. I hope that that balanced approach provides reassurance to hon. Members who are concerned about network infrastructure that alternatives are being considered.

Since the costs and technical difficulties vary so much from project to project, it is important that each one is assessed case by case. The Government consider the costs and benefits of undergrounding electricity lines to be important issues, which is why the Department of Energy and Climate Change supported an independent study—I think that it is the one to which the hon. Member for Wells referred—to give clarity on the practicality, whole-life costs and impacts of undergrounding and subsea cabling as alternatives to overhead lines. The report was published in January 2012, and its findings are generally consistent with the comparative costs that National Grid has quoted.

The potential need for and development of transmission network infrastructure in Montgomeryshire is the reason behind National Grid’s activities in the area. The application for the proposed new electricity network infrastructure to connect the proposed wind farms in mid-Wales has yet to be submitted to the Planning Inspectorate. After examination, any application would be decided by the appropriate planning authorities and Ministers, so it is not appropriate for me to give a view on the particulars of the project—as my hon. Friend the Member for Montgomeryshire has observed—or indeed on the proposed wind farms in mid-Wales, which have been subject to a public inquiry. However, I recognise that many people feel very strongly about overhead lines and other network infrastructure, and the possible effect on the landscape. In introducing the debate, my hon. Friend spoke passionately about the beauty of the landscape and the wonders of mid-Wales. He has been a champion of maintaining the landscape as it is, and we will take that on board.

Effective consultation with local communities and other interested parties is a vital part of the planning and regulatory approval process. When making proposals for new infrastructure, National Grid must demonstrate that alternatives were considered and why the preferred option is justified. It must also demonstrate that stakeholders have been engaged. At the root of the issues raised by my hon. Friend the Member for Montgomeryshire is his concern that, although safeguards exist and there are many levels of requirements for consultations, those consultations are either not taking place or not taking place satisfactorily. By law, the redress for that is through the Planning Inspectorate, which will look at the consultation process as part of the planning application. If it is not good enough, the planning application could be refused, because the request for planning permission requires a good consultation. My hon. Friend has made his points very clearly today, but I urge him to make them to the Planning Inspectorate as well at the appropriate time.

My hon. Friend spoke passionately about his constituency and mid-Wales in general. We have heard specific concerns about National Grid, but we believe that, overall, it is regulated carefully and diligently. Nevertheless, if hon. Members have specific concerns about incidents, they should write to me and I will certainly look into them. I urge all Members to continue to protect their constituencies as they have done, and congratulate my hon. Friend the Member for Montgomeryshire on leading this debate and being so assiduous in protecting his constituency.