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Energy National Policy Statements

With permission, I shall make a statement about the energy national policy statements and our proposals on clean coal. In the summer we published the low carbon transition plan, which explained how we would meet our commitments to carbon reduction for 2020 and beyond. New infrastructure is being provided for the coming years, with 20 GW under construction or consented to—more than the amount that will close by 2018—but in order to meet our low-carbon energy challenge, and owing to the intermittency of wind, we shall need significantly more generating capacity in the longer term. As our documents explain, over the next 15 years to 2025, one third of that larger future generating capacity must be consented to and built. Given that challenge, the imperative of reform in the planning system is clear. The current system is characterised by duplication, with several bodies responsible for different aspects of consent, overlapping responsibilities for politicians and independent decision makers, and delay. Today, to guide the decision making of the new Infrastructure Planning Commission, we are setting out for consultation six draft policy statements on energy, the most important being those on the trinity of fuels of our low-carbon future: renewables, nuclear power and clean fossil fuels. We need all of them in the long term, because the challenge of the low-carbon transition is so significant. We need renewables, which are a home-grown and plentiful source of supply and are already powering 2 million homes in the UK; we need nuclear power, which is a proven, reliable source of low-carbon energy and an important base load in the system; and we need fossil fuels—with carbon capture and storage—which make possible a flexible peak-load response. Last year, offshore wind generation increased by two thirds and onshore wind generation by one quarter. However, we need to increase the rate of progress significantly in order to meet our objective of 30 per cent. of our electricity coming from renewables by 2020. The national policy statement on renewables covers onshore renewables over 50 MW and offshore wind over 100 MW. Other onshore decisions remain with local authorities. The policy statement seeks to strike the right balance between achieving national objectives and avoiding adverse impacts on the local environment and biodiversity. While Government set out the framework in the policy statements, each application will be decided upon by the independent Infrastructure Planning Commission. The IPC will have to take account of regional and local plans drawn up by local authorities, and developers will have to ensure that they have consulted locally before any application is made, with local authorities submitting local impact reports. The Infrastructure Planning Commission will make its decisions on the basis of a clear timetable of a year from the acceptance of an application to a decision. That is a crucial change from the system that operated in the past. This system is right for energy security. By meeting our commitments on renewables we can limit the need for gas imports, holding them at 2010 levels for the rest of the decade. It is also the right thing to do for the environment, because there is no bigger threat to our countryside than climate change. But, according to the estimates that we are publishing today, even given our ambitious targets for renewables there will be a need for additional new non-renewable power. We need to use all available low-carbon sources, which is why we were right to end the moratorium on new nuclear power stations in this country last year. In response, energy companies have announced intentions to build 16 GW of new nuclear power. In the spring, we invited comments on the 11 sites that had been nominated for new nuclear, all of which are on or near existing nuclear sites. I can tell the House that 10 of the 11 sites have been judged potentially suitable and have been included in the draft policy statement. The next step will be consultation in the 10 selected sites, as well as nationally. The consultation proposes that the 11th site, Dungeness, not be included in this national policy statement. That is because, following advice from Natural England and others, the Government do not believe that a new nuclear power station can be built there without causing an adverse effect on the integrity of the internationally unique ecosystem. Under the habitats directive, we are obliged to consider alternative nuclear sites. An independent study has suggested that three—Kingsnorth, Druridge Bay and Owston Ferry—are "worthy of further consideration". We have concluded, however, that all of them have serious impediments and none of them is credible for deployment by the end of 2025, the period of the policy statement; nor do we believe they are necessary for our plans for new nuclear. Therefore, we have excluded all of them from being potential sites in the draft policy statement. On waste management, the Government are satisfied that, on the basis of the science and international experience, effective arrangements to manage and dispose of the waste from new nuclear power stations can be put in place. In addition, today we are opening consultation on the proposed regulatory justification for two different reactor designs. New nuclear is right for energy security and climate change, and it will be good for jobs too, creating up to 9,000 jobs to build and operate power stations at each site and helping leading companies to access the international market. As well as renewables and nuclear, the third part of our low-carbon future is clean fossil fuels. There is no solution to the problem of climate change either at home or abroad without a solution to the problem of coal—cheap and reliable, but the most polluting fuel. Already, €180 million has provisionally been offered from the European budget to assist Hatfield power station to fit carbon capture and storage, and I can confirm that we have received bids from E.ON and Scottish Power for the next stage of the current CCS competition for a post-combustion power station. Early next year, we will allocate the up to £90 million that has been set aside for the bid or bids that will go forward to the detailed design and engineering stage. Our aim is clear: for carbon capture and storage to be ready to be deployed 100 per cent. on all new coal-fired power stations by 2020. We are determined to ensure that, with the right combination of regulation and incentives, we make this happen, so I can confirm that, under our new framework, there will be no new coal-fired power stations without CCS. With immediate effect, in order to gain development consent all new coal plant will have to show that it will demonstrate CCS from the outset on around 400 MW of total output. Our plans are based on up to four projects between now and 2020, including up to two post-combustion projects and up to two pre-combustion projects. The pre-combustion demonstration projects are expected to have 100 per cent. CCS on their coal capacity from day one. The post-combustion projects will be expected to retrofit CCS to 100 per cent. of their capacity within five years of 2020. That will be enforced by the Environment Agency, and there will be a review to confirm it by 2018. If we conclude at that time that CCS will not be proven, we believe further regulatory measures will be required to restrict emissions from these plants, such as through an emissions performance standard. Even with the right regulation, however, if we leave the funding of CCS simply to private companies, it will not happen in time. To make CCS financially viable, our proposed energy Bill contains powers to introduce the levy to support demonstration that the Chancellor announced in the Budget; and, in response to points made in the consultation, the levy will also be available to support the move to 100 per cent. retrofit of CCS. Taken together, these policies are the most environmentally ambitious set of coal conditions of any country in the world, and they provide the opportunity for Britain to create thousands of jobs in carbon capture and storage throughout our country. On coal, nuclear and renewables, the aim of our national policy statements is clear: consistent with the advice of the Committee on Climate Change, we need to be on course for the long-term goal of near-zero carbon emissions from power. In the spring, we will publish further work on the pathway from 2020 to 2050 consistent with this trajectory. Alongside the overall policy statement and those for nuclear, renewables, fossil fuels and gas storage, we are also publishing the policy statement for electricity networks. Together, these documents represent a framework for the future of our energy supplies. In every area—onshore and offshore wind, and other renewables; nuclear; and clean fossil fuels—there will be people who wish to oppose specific planning applications. Their voice must be heard in the process, and we believe that it will be. The planning process must ensure that we give consent to the right projects in the right sites. Although of course we need a process that can turn down specific applications, saying no everywhere would not be in the national interest. As a country, we need nuclear, renewables and clean coal for our energy future. They are necessary for security of supply, tackling climate change and the future of our economy. That is why we are reforming the planning system and publishing our statements today. I urge all those in all parts of the House to unite behind these proposals, and I commend this statement to the House.