Energy Bill [HL]

Lord Hain Excerpts

Tuesday 12th April 2016 Lords Chamber

[Lord Foulkes of Cumnock]

It is indeed. Absolutely. As my noble friend Lord O’Neill said, it is unusual—exceptional—for me to do that.

[Lord Hain (Lab)]

Unprecedented.

[Lord Foulkes of Cumnock]

It is unprecedented, as my noble friend Lord Hain says. I also want to reassure the Minister that no constituencies of English Conservative MPs will be affected by this because I know some of them are genuinely worried about the effect on their constituencies. What I am suggesting in my amendments and what others are suggesting in theirs deals with proposals principally in Scotland and with very important community projects in Scotland. Two categories are dealt with in my amendments. The first category is those covered by Section 75 which are unable to go ahead not because they do not have planning permission —they have managed to get that—but because of some technicality. We are suggesting that that technicality is creating huge problems for them. The other category is in relation to grid connections. There is a particular problem in Scotland with the transmission and distribution grids not necessarily being as easily available as south of the border and having different arrangements. Some projects have fallen foul of these regulations.

If we put the schemes together, they amount to only just under 90 megawatts of generation. It is not a huge amount we are asking for. It is a relatively small amount. They all have the democratic consent of the local council, which is one of the matters raised in the Conservative election manifesto. I shall give the House a couple of examples. There is a scheme in Sorbie, a working dairy farm in Ardrossan in north Ayrshire, that has full planning consent and for which bank finance has been secured, a turbine contract has been agreed and design work has been started. Nearly £1 million has been spent on the scheme by the people concerned. The family-run working dairy farm is already suffering because of the low price of milk. If this project were to be cancelled because of the Government not accepting the amendments being put forward today, it would be in real difficulty. That is the kind of problem that is being faced.

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[Lord Hardie (CB)]

My Lords, on Report I drew attention to the unfair effect upon a development on Skye. The original provisions about the date upon which the guillotine would fall on new onshore wind farms discriminated against a development at Glen Ullinish in Skye which had planning permission, control of the land, the support of the local community and an agreement to link to the grid; the developers were paying money to the grid in fulfilment of that agreement. The only reason why the development could not go ahead was that the grid had to be upgraded, and that could not be achieved within the appropriate time.

I voted with the amendment that removed the clause from the Bill, but afterwards I wrote to the Minister to explain that that was the only option I had. I called on him and the Secretary of State to consider accommodating this unusual situation. I am grateful to the Minister, the Secretary of State and officials in the department for giving this matter consideration. Unlike the noble Lord, Lord Foulkes of Cumnock, I read the new Clause 32LL as a solution to the difficulty that there is a grid or radar delay condition. I seek confirmation from the Minister that I am reading it correctly, but I genuinely think it has enabled the development at Glen Ullinish to proceed. As I indicated in my letter, if that problem were resolved and a clause were brought back that accommodated this issue, I would support it, subject to the Minister’s confirmation that my understanding of Clause 32LL is correct.

[Lord Hain (Lab)]

My Lords, I tabled Amendment 7T and took the liberty of giving the Minister a copy of my draft speech in advance, in the hope of his co-operation and acceptance of the amendment. The Bill as it stands puts at risk a multimillion pound investment in Wales in and around my home area of Neath Port Talbot, which is already facing massive economic haemorrhage resulting from the threat to Tata Steel. The issue at stake relates to an already consented project, Gamesa’s Llynfi Afan renewable energy project, which has had its planning condition varied through a Section 73 consent to allow for a different road access route. The project is ready to start construction, and some of the major work is going to local businesses, with obvious positive implications for jobs, which in that area is welcome.

On 27 August 2013, the Llynfi Afan renewable energy project was granted consent by Neath Port Talbot County Borough Council. Previous consent had already been granted by two other local authorities, Bridgend County Borough Council on 18 July 2013 and Rhondda Cynon Taff on 13 October 2011. However, due to a change in the proposed site access route, the developer, Gamesa, successfully applied for variation of two conditions of the Neath Port Talbot permission by way of Section 73 consent. I stress that the variations dealt solely with the access route for turbine component deliveries to the site of the consented generating station itself, and its capacity will remain unaltered. As such, the impact on the DECC budget is neutral.

The variations were approved on 24 February 2016 by Neath Port Talbot County Borough Council. As I understand it, where an application under Section 73 is granted, the effect of the Planning Act 1990 is the issue of a new planning permission, with a new decision date, sitting alongside the original permission, which remains intact and unamended. The consent and conditions of the original consent are preserved, as is the implementation date by which the construction of the generating station should have been started. On Report in the House of Lords, the noble Lord, Lord Bourne, said:

“Where consent is granted for development on or before 18 June and is subsequently varied”,—[Official Report, 21/10/15; col. 668.]

in this way, it will continue to fall within the approved development condition.

While that is very welcome and positive for this project, regrettably, his statement by itself has proved insufficient to achieve adequate investor confidence. That is because the renewable obligation certificate is awarded after the wind farm has been built and has proven to be exporting electricity to the grid. Investors therefore need certainty before construction, otherwise there is a risk that the project could be built but not receive the required support. As a result, investors wish for certainty reflected in the legislation, and without the amendment the project will be put at risk. The amendment therefore aims to resolve the issue and ensure that the project can go ahead, matching government intent and delivering investment in the local community. My understanding is that without the amendment, such variation permissions as Section 73 would not qualify under the Government’s grace period condition.

The investors’ legal advisers have said that, as the Energy Bill currently stands, it fails to reflect the position that variation consents are fresh planning permissions as a matter of law, as used to be the case. They assert that without an amendment, such variation permissions would not qualify under the Government’s grace period condition. Amending the Bill would make it absolutely clear and avoid any additional funding being added other than what the Government have already allowed for.

In the particular case of Llynfi Afan Renewable Energy Park, tens of millions of pounds will be invested in the construction and operational phases. The communities have widely supported Gamesa’s Section 73 application, as they support the project and wish to see it happen. The local community stands to gain substantially in community benefits, and in terms of business rates and direct and indirect local employment opportunities. Gamesa is in the final stages of appointing a contractor who will be responsible for building the wind farm and, as such, will require employment and services from the locality. It has been Gamesa’s aim to work wherever possible with local companies, involving local jobs, and will continue to do so during the construction and operational phases.

I appeal to the Minister to agree to the amendment. If he finds some technical fault with it—although it is not obvious to me what that might be—will he agree to write a letter to the developers explaining why the Bill as it stands, without the amendment, meets their objectives and that they will be able to proceed, notwithstanding the fact that this amendment may not be accepted by the House?

[Lord Wallace of Tankerness (LD)]

My Lords, the Minister has moved Amendment 6 and spoken to Amendment 7, and I want to speak principally to my amendments to Amendment 7. My noble friend Lady Featherstone may say something about the wider issue of the early closure of the renewables obligation in respect of onshore wind generating stations. The Minister has repeated the Conservative Party manifesto commitment that there will be no new subsidies for onshore wind, but I well recall the comment from the noble Baroness, Lady Worthington, that it is difficult to think that a new subsidy is actually the early closure of a long-existing subsidy. The Minister repeats that again and again, but no one is seeking to overturn the early closure. However, the grounds he has stated— that it is a manifesto commitment—are somewhat doubtful.

I have yet to find many people in the industry who think this is a very wise move at all. It is not simply about what is being done with onshore wind; as we have already heard in this debate, a large amount of the investment made in developments over a long period will be cut off at a fairly arbitrary date. The Government’s capriciously cutting off developments in the way proposed affects the confidence of those who want to invest not only in onshore wind renewables but in the entire renewables industry and, indeed, in other infrastructure developments.

Turning to the amendments, I begin by thanking the Minister for his willingness to engage through exchanges of letters and in meetings. One reason why we on these Benches were very happy to support the move to take out the principal clause in the original Bill was not that we did not expect the Government to try to bring back the clause, but that we felt that it would give them an opportunity to reflect on and try to improve the grace periods. Although they were welcome as far as they went, they certainly fell far short of what many people in the industry—I would say almost universally—thought was required.

What has been disappointing, and perhaps not in keeping with the way this House operates when we ask the Government to think again, is that we have absolutely no sense that they are willing to compromise in any way whatever. They have said that there is no compromise, and that is why the amendments that I have tabled—particularly Amendment 7X—embody quite a number of the changes which the industry wants to see and on which we have had representations. I invite your Lordships to support that amendment. I hope that if that measure is brought back in—after all, the Bill has to go back to the Commons because the Government have brought forward amendments to their own amendments—there will be a further opportunity for the kind of engagement that is part and parcel of the way this House operates. Certainly, when I had the privilege of sitting on the Front Bench and dealing with amendments, I tried to find some means of compromise when there were Lords defeats.

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Tabled by

[Lord Hain]

7T: Line 145, after “2015,” insert “regardless of whether it was varied after that date by any planning permission, consent or development consent issued under section 73 of the Town and Country Planning Act 1990 (determination of applications to develop land without compliance with conditions previously attached), section 42 of the Town and Country Planning (Scotland) Act 1997 (determination of applications to develop land without compliance with conditions previously attached), section 36C of this Act (variation of consents under section 36) or under the Planning Act 2008,”

[Lord Hain]

My Lords, on the basis of the Minister’s kind offer to write to the developer, I will not move the amendment.

Amendment 7T, as an amendment to Commons Amendment 7, not moved.