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Energy: National Policy Statements

My Lords, I am pleased to open this debate on the draft overarching national policy statement for energy infrastructure. This is rather a unique debate, which sets the pattern for consideration of all future national policy statements in your Lordships' House. National policy statements are a key part of the planning reforms introduced by the Planning Act 2008. They are the policy statements against which the Infrastructure Planning Commission will determine applications for development consents by those wishing to build major energy infrastructure. Parliamentary scrutiny of the statements is an essential step towards getting them right. Under the scrutiny arrangements for national policy statements agreed by the Procedure Committee and approved by the House, the Government have undertaken to arrange debates on national policy statements in Grand Committee for up to four hours. To give each of the six energy infrastructure NPSs the detailed consideration it deserves, we are having three separate sittings in Grand Committee. The first, today, will look at the overarching energy NPS, which sets out policy and will be the primary document for energy development consents. The second sitting, in a couple of weeks’ time, will consider in detail the nuclear NPS. The final sitting will be on the other technology-specific energy NPSs. At the end of these sittings, the Grand Committee will report to the House on the NPSs. The House of course retains the right to adopt a resolution in respect of a specific national policy statement if it so wishes. My noble friend the Leader, whom I am glad to see in Committee today, has indicated that in the event of a Motion for resolution being tabled, the usual channels would undertake to provide time for a debate in the Chamber. In the first instance, we hope to address concerns and questions raised by noble Lords in today’s debate and the two other debates that we will have in a fortnight’s time. The other place is giving the NPSs similar scrutiny through a Select Committee, to which I have given evidence. My understanding from the hearing at which I was present is that the committee is expected to report at the end of March. The NPSs set out the Government’s policy on energy infrastructure and the need for new energy infrastructure. They do not, however, set out new policy. An NPS is a guidance document for the IPC. The purpose of today’s debate is not to reopen discussions on government policy, although no doubt some noble Lords will be tempted down that route, but to consider whether the NPSs provide a framework that the IPC can use in determining applications for development consents for new energy infrastructure. We are here to consider whether the drafts before us do that job. The Infrastructure Planning Commission development consents process will be faster and more transparent than the current planning regimes. It introduces a single consents regime for major infrastructure projects to replace what can sometimes seem to be a bewildering number of regimes. It will provide for public consultation and engagement in the consents process, and it will reduce the delays in development consent for major projects that often happen at the moment. By setting out clearly government policy on energy and the high and urgent need for new infrastructure, the energy national policy statements will help to avoid time-consuming discussions on government policy during hearings on applications. The commission will be able to consider the important issues for each application: what the local impacts might be; how they can be mitigated or avoided; and how the impacts are balanced against local and national benefits. The six energy NPSs have been carefully structured to achieve this. The overarching NPS sets the framework on environmental, social and economic objectives and the need for infrastructure in four parts. Part 1 explains how the NPS fits into the development consents regime and how it should be considered by the IPC. It states what infrastructure is covered by the energy NPSs and the geographical extent. It explains that there are special arrangements for consideration of infrastructure in Wales and that, apart from pipelines and power cables running across the border, it does not apply in Scotland, although it may be a material consideration for Scottish planning consents. Part 2 of the overarching NPS is the statement of government policy on energy. It sets out how new energy infrastructure will contribute to our low-carbon targets and to energy security. This part looks in detail at the implications for power generation and carbon emissions and states our belief that a diverse energy mix is essential for security of supply as we move to a low-carbon economy. The need for new energy infrastructure is urgent, as many reports have recently stated, so part 3 of the overarching NPS explains exactly what that means. The lead scenarios estimate that demand for electricity up to 2025 will remain at around 60 gigawatts. Our present generation capacity is 80 gigawatts, which provides a buffer to meet demand when, for example, a generating station is offline for maintenance. However, there will be a loss of capacity over the next decade as around 12 gigawatts of coal-fired capacity closes by 2015 in response to more stringent emission standards set by the large combustion plant directive and around 10 gigawatts of nuclear capacity reaches the end of its life. We also anticipate that some gas-fired generating stations built before 2002 will close in response to the industrial emissions directive. This capacity must be replaced. However, the lights will not go out in 2015, as some commentators would have us believe. The recent cold spell demonstrated that our energy infrastructure has the capacity to cope, but we must build new infrastructure to meet future demands, infrastructure that helps achieve our target for the decarbonisation of electricity generation by 2050. Our policies set out in the low-carbon transition plan and the renewable energy strategy will do this. We estimate that around 30 per cent of electricity generation should be from renewable sources, mostly wind, by 2020. Wind is, as we know, intermittent and other renewable energy sources are also intermittent. There must be sufficient alternative generation capacity to meet demand when the wind is not blowing. Fossil fuels provide a flexible capacity, but have high emissions. The national policy statements therefore set out how the IPC should implement our policy, set out in the framework for coal, that requires all new fossil fuel and biomass generating stations to be carbon-capture ready and all new coal-fired generating stations to have carbon capture and storage on at least 300 megawatt net generating capacity. The Government are providing funding for four CCS demonstration plants, although this does not preclude developers bringing forward more proposals for coal-fired generating stations with CCS if they consider it to be a commercial proposition. It is necessary that we explain how our policies should be applied by the IPC. It is also important that we explain to developers, to the IPC and to any other interested party what considerations should apply to individual project applications. Any major infrastructure project will have impacts. Part 4 of the overarching NPS describes the range of factors, both commercial and regulatory, that developers will need to consider when bringing forward an application, and sets out principal generic impacts, with indications of what mitigation could be applied. The technology-specific NPSs on fossil fuel generating stations, renewable energy infrastructure, gas and oil infrastructure, electricity networks—that is, power lines—and new nuclear power stations set out any additional locational criteria and impacts that the IPC should consider. In drafting the technology-specific NPSs, we have sought to avoid unnecessary duplication, so if an impact or locational criterion is set out in the overarching NPS, and there are no additional considerations, we do not repeat the information. We make it clear that they must be read in conjunction with the overarching NPS. We also make it clear that the locational criteria are not, and cannot be, exhaustive. Each project must be considered individually. It will be for the developer, after appropriate pre-application consultation, to describe the project’s impacts and mitigation in an environmental statement that should accompany an application. The nuclear NPS is, of course, different from the other technology-specific ones. First and foremost, it is site-specific and identifies 10 sites that are considered potentially suitable for new nuclear power stations. The draft nuclear NPS also explains the Government’s assessment of arrangements for the management and disposal of radioactive waste. We are satisfied that effective arrangements will exist based on safe and secure interim storage, followed by long-term storage in a geological disposal facility. The draft nuclear NPS sets out clearly that new nuclear power stations should be free to contribute as much as possible towards meeting the need for 25 gigawatts of new non-renewable capacity by 2025. Alongside nuclear, we also need new gas and oil infrastructure. As domestic production reduces, a higher percentage of the UK’s requirement for gas and oil will be met by imports. We will need new gas storage facilities; new LNG terminals through which to import gas; pipelines to take it to the storage facilities; and transmission networks to get it to customers. Similarly, we will need new oil infrastructure. The NPSs set out the framework for the IPC to consider development consent applications. The Planning Act requires that each NPS is accompanied by an appraisal of sustainability. The appraisals of sustainability include analysis that meets the requirements of the strategic environmental assessment directive and additional appraisal of socio-economic effects. By that I mean employment and the broader benefits for the economy. As the NPSs do not generally put forward new policies, these appraisals considered how an NPS would have an effect on consenting development applications compared with consenting development without an NPS. I know that it has been suggested that the appraisal should have assessed a wider range of options, and not just different ways of delivering current government policy, but I do not think that would have been appropriate. The NPSs largely codify existing policy so that the IPC can determine development consents. They do that because the Planning Act creates a new system to deliver the same results more effectively and efficiently for development proposals. It is not, in itself, intended to trigger a reappraisal of basic energy policy. To consider and evaluate in detail options that are not current government policy would surely require us to do just that. There may be a time and a place for such an exercise, but it is not in these appraisals of sustainability. We continually review policy to make sure that it delivers our objectives. If policy changes, there is provision to revise an NPS to reflect new policy. Depending on the context of any such new policy developments, it may be appropriate to review and evaluate a wider range of options in a new appraisal of sustainability as part of that process. In a small way, it can be seen that we have followed that approach now in the few areas where the NPSs set out for the first time—and in a systematic way—new policies, such as for clean coal and for nuclear, where the range of options assessed has gone somewhat wider. We have just completed a comprehensive consultation on the national policy statements. It ran from 9 November 2009 until yesterday. The events were well attended and many important issues were raised which will be considered carefully and reflected appropriately in the final national policy statements. The overarching energy national policy statement is a critical document to bring forward new energy infrastructure and to ensure that developers, the IPC and the general public understand the criteria that are used in considering development consents. I believe that it sets a framework that the IPC can use in deciding whether energy infrastructure projects should be given development consent. I commend the draft statement to the committee for consideration.