Tidal Lagoons and UK Energy Strategy

Jim Shannon Excerpts

Tuesday 6th December 2016 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to serve under your chairmanship for the first time, Mr Paisley. It is good to have a colleague in the Chair. I also thank the right hon. Member for Preseli Pembrokeshire (Stephen Crabb) for presenting such a good case.

Strangford lough in my constituency is one of the most beautiful loughs in the whole world. I defy any Member of this House to come and have a coffee and a delicious scone in Harrisons of Greyabbey, sit on the veranda looking over the lough and argue that the view could be beaten. I would argue that the view could never, ever be beaten. Not only is Strangford lough the most beautiful, but it has the potential for so much energy production. Indeed, we were proud to trial the world’s first tidal current energy turbine, the SeaGen. Tidal power is an important part of any renewable energy plan as it is a guaranteed source of power and, unlike wind power, can be relied on every day. Generating electricity from two massive underwater propellers, the SeaGen was lowered into place in 2008 and bolted to the seabed in one of the world’s fastest tidal currents.

Strangford lough is one of Europe’s most protected areas, providing unique habitats for marine and bird life. It is a Ramsar area and also an area of special scientific interest. The location was chosen for the turbine project because it offered sheltered waters close to shore, but still exposed the generating device to the full rigours of the tides. The pull of the waters of the Narrows in Portaferry and Strangford is significant and in the early stages some of the blades were damaged. SeaGen generated 1.2 MW: enough power for around 1,500 homes.

There were of course environmental aspects and questions. A study of the environmental impact of SeaGen will, I hope, open the door for other such projects. There had been fears that large marine mammals such as seals would be hit by the propellers. We have a good colony of seals in Strangford lough. The environmental monitoring report that gave the all-clear stated:

“There have been no changes in abundance of either seals or porpoises detected which can be attributed to SeaGen; seals and porpoises are continuing to swim past SeaGen, demonstrating a lack of any concern or hindrance.”

[David Simpson (Upper Bann) (DUP)]

Does my hon. Friend agree that, as the United Kingdom prepares to leave the European Union, it is essential that we get the energy strategy correct across the whole of the United Kingdom, so that we can offer companies a competitive spirit for business?

[Jim Shannon]

I thank my hon. Friend for that intervention. As a businessman, he focuses on the issues that we want the debate to focus on. The Minister will, I hope, respond to that.

The SeaGen project ended and was dismantled in January this year. The years of operation have opened the door for other such tests. There has been consideration of similar projects on a larger scale in other coastal areas, so the SeaGen project in Strangford lough has given the necessary information to the Department to use for further projects. Perhaps the Minister will give us some idea of how the SeaGen project can be used for the furtherment of other projects.

My opinion is clear: the less dependent we are on crude oil and its supply from other countries, and the more we can get from our own renewable resources, the better. I support such projects for that reason.

The levy control framework, established by the former Department of Energy and Climate Change and Her Majesty’s Treasury, set a cap for the forecast costs of certain policies funded through levies on energy companies and ultimately to be paid for by consumers. Since November 2012, the framework has covered three schemes to support investment in low-carbon energy generation: the renewables obligation, feed-in tariffs and contracts for difference. It sets annual caps on costs for each year to 2020-21, with a cap of £7.6 billion in 2020-21, in 2011-12 prices. According to the latest forecast, the schemes are expected to exceed the cap and will cost £8.7 billion by 2020-21. That is equivalent to £110—around 11%—on the typical household fuel energy bill in 2020. That is £17 more than if the schemes stayed within the cap.

I will conclude shortly. I understand other Members want to speak, so I will not take extra time. We need to do more, and projects such as SeaGen at Strangford lough are possibly the way to go as they also seek to address the environmental impact duty that we must stick by. The environmental reasons for renewable energy are clear and compelling. Although I am not someone who would ban the use of fossil fuel or nuclear reactors as needed, I do feel we should make the most of the great resources that we have in our tidal energy provision. I am anxious to see how we can develop that in Strangford lough and throughout the Province—indeed, across this great nation of the United Kingdom of Great Britain and Northern Ireland—so that we rely less on fossil fuels and other energy sources that are not on our doorstep.

--- Later in debate ---

[Jesse Norman]

That is a perfectly reasonable question. Historically, the expectation has always been that technologies have to demonstrate that they are capable of benefiting from support. Given that the distance in the range of cost is so high, a judgment has been made that that technology has not done so at the moment, but other technologies have succeeded in doing so.

Other colleagues raised issues such as the rate at which costs might fall with other lagoons, the degree to which different projects could inspire different learning, and the first mover advantages, all of which should be resolved and discussed in the context of the Hendry review.

[Jim Shannon]

In my contribution, I mentioned the SeaGen project in Strangford lough in Northern Ireland—a pilot scheme sponsored by the Government to get results in relation to the environment. Perhaps the Minister is going to tell us what the results of that pilot scheme are so that we have some idea of what we are doing now.

[Jesse Norman]

I am sorry to have given up time for that intervention, because I was coming to that point. SeaGen, as the hon. Gentleman recognises, was a research test bed, and it is being decommissioned now. It received a £10 million grant from the Department, and those conclusions are being carefully assessed. It is a project in which there has already been public investment. [Official Report, 14 December 2016, Vol. 618, c. 6MC.]

It is clear that we cannot allocate subsidies to every technology that asks for them. We have said that our focus will be on key technologies that have the potential to scale and deliver long-term cost savings, in which the UK has a comparative advantage and whose costs to consumers are acceptable.