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Energy: National Policy Statements

That is for the Infrastructure Planning Commission to decide. It has to accept the application, and one of the conditions for accepting the application is that the developer has gone through a proper pre-consultation process. I will look at that to decide whether we need to clarify it, but I am reluctant to give a ruling in relation to what consultation may or may not have taken place. It is clear that the IPC has to be satisfied that the developer has gone through a proper process before it goes through the stages. The noble Lord will know that local people will have every opportunity to make their views known at the likely open hearings of the IPC. The noble Lord, Lord Jenkin, took me to task when I suggested that the IPC is the sole consenter in this system. I should emphasise that that is in relation to planning consent. A number of other regulatory bodies, including the Environment Agency, Natural England and the Health and Safety Executive, have a very important and relevant role to play in sustainability. However, a range of consents, including Environment Agency consents, can be covered by a development consent order, with the agreement of the regulator. That suggests that the IPC is not taking over the role of other regulatory bodies that need to give consents. It can, however, work with other regulatory bodies to ensure that the process is as streamlined as possible. On local government, the noble Lord, Lord Reay, asked me about the letter sent by the chief planning officer. My understanding is that the quotation that he gave from the clarification that has been given is absolutely correct. There was no intention in the letter of suggesting that the draft NPS should be treated any differently from any other statement of government policy. I hope that that reassures the noble Lord. Although we have not discussed the role of local authorities very much, we think that they will have an important role to play. I re-emphasise their input into the pre-application consultation by the developer. The noble Lord, Lord Reay, also touched on climate science. I am not going to go there, except to say that we should be very wary of saying that the whole of climate science is at risk because of what happened at the University of East Anglia, into which there is an ongoing inquiry, and the IPCC and the glacier issue. That is not true at all. Scientists are overwhelmingly of the view that climate change is happening, and we cannot take the risk. The potential catastrophe for the world, unless we start to take action to mitigate carbon emissions, is so great that we have to proceed in the way in which we have decided. Of course, we cannot discuss national policy statements on energy without discussing the energy infrastructure over the next few years. I may have suggested in my opening remarks that we might do so, but I did not think that we would get away with it. Then we came to the contributions of the noble Lords, Lord Jenkin and Lord Dixon-Smith, and the noble Baroness, Lady Wilcox, on that subject. We are well aware that a number of organisations have expressed concern about the impact of the closure of some of our current energy infrastructure because of the large combustion plant directive and the fact that many of our existing nuclear power stations will go out of commission in the next 10 to 15 years, but at the moment we are seeing significant investment in the energy sector and significant generating capacity is being commissioned. We are confident that we will have sufficient electricity generation in the next 10 years and, although one should never be complacent, one should be very wary of falling into the trap of thinking that for some reason the mixture will not be right and will not provide enough energy. We cannot, of course, be complacent. I read with great interest the Project Discovery work by Ofgem, which I describe as a contribution to the debate, because it is for government to set the policy while Ofgem is an economic regulator. No doubt it has a view in the light of its experience, but the key point here is the Government’s own work on markets, ensuring that they and the energy structure that we have continue to be fit for purpose while moving on over the next 10, 20, 30 or 40 years. We are very busily working on that at the moment. The noble Lord, Lord Jenkin, referred to the interview given by my right honourable friend the Secretary of State in the Times two or three weeks ago. We are working on a project called the energy market assessment, alongside work on the road map to 2050. Essentially, it is looking very hard at the energy mix that will be required in the years ahead to make sure that the Government have the right interventions to get the energy mix that we require. We hope that some of the preliminary work on that will be available at the time of the Budget. The noble Lord, Lord Jenkin, went on to suggest that because we were doing that work, it called into question the relevance of the national policy statements that the Committee is debating. I have to say that it does not, because of what we are essentially looking at. We have set out the policy and the kind of energy mix that we believe we require for energy security and in low-carbon terms. As I see it, the question is not whether the mix is right but whether we have the necessary interventions to make sure that we achieve that mix. I would make that essential distinction between the work that we are doing on markets and what the national policy statement contains. If one looks at Ofgem’s work, for instance, a lot of its proposals generally relate to electricity pricing and do not directly affect planning considerations. The noble Lord, Lord Broers, once again made an interesting intervention. He was pressing me to say on what the scenarios and indications that we have set out of the kind of energy mix that we need in the future were based. Perhaps I might refer him to the draft overarching national policy statement, which refers to modelling work undertaken by Redpoint Energy and Trilemma UK Ltd to assess options for changes to the renewable obligation. That work focuses on the lead scenario published in the renewable energy strategy document, and represents one scenario of how the UK could meet our renewable energy target. I shall write to him with further details of that, and I hope that the work we are now doing on the energy markets assessment to 2050 will also contain some helpful information. Perhaps I might move on to some questions that were raised about the energy mix, in particular to an old favourite of ours in your Lordship’s House: whether the Government’s emphasis on renewable energy is right. The noble Lord, Lord Reay, once again raised concerns about the policy of developing renewable energy. He was backed up particularly by the noble Lord, Lord Willoughby De Broke, in the sense that the argument—if I have understood it—is that the intermittency of many renewables means that they are not an efficient use of energy. I do not think that we are going to agree on this. We have set ourselves a target of moving to 15 per cent renewable energy by 2020, which roughly translates into about 30 per cent electricity, 12 per cent heat and 10 per cent transport. We need a diverse energy mix in which renewable energy has an important role to play. Yes, one has to accept that, because of the intermittent nature of renewable energy, some generating plant may not be in use the whole time. Indeed, one issue that we are looking at in the energy markets assessment is whether there is a particular issue with investment in those fixed costs. We are aware, of course, of what that can mean to investment. Noble Lords refer to Germany, but it is not as though that country is alone in moving towards and recognising the impact of renewable energy. Even the countries that found themselves in great difficulty at Copenhagen in coming to an agreement have policies of developing renewable energy. Given the resource that we have in wind, it seems senseless for us not to see it as a big resource. It is becoming clear that companies are now very interested in coming to the UK to develop manufacturing capacity for wind, particularly the offshore wind industry. That brings great investment opportunities for this country. On biomass and Drax, I met the chief executive of Drax this morning. We already have a group looking at grandfathering the renewable obligation on biomass. I also discussed the separate issue of the recognition of or a cap on renewable obligation certificates for co-firing with biomass. I think that we had a constructive discussion, and I am sure that my officials and the people at Drax will continue to have discussions. I am keen to see a resolution of this issue. The right reverend Prelate the Bishop of Liverpool was disappointed that the national policy statement did not make enough of climate change. In a sense, that was replicated by a number of other comments. Essentially, the argument is that the IPC should either be directly concerned with carbon emissions of a particular application or, as has been suggested, that there might be a hierarchy of consents whereby the lowest carbon-emitting application would go to the top of the tree. I well understand why noble Lords argue for that, but the risk is that it would turn the IPC from a body that should be concerned with consent applications and that deals with them on their own individual merits to a body that essentially takes over government policy responsibility. That is why we have not gone down that route. It is for government to ensure that the whole system works and that we get the energy mix that we require and have set out. It is not for the IPC to do so. If it turns out that it is not working and we are not seeing the right energy mix, it is not for the IPC to intervene but for government. In a sense, the work that we are doing on the energy market assessment is an illustration of that; the Government are asking whether we have the right interventions and whether the changes that we need to make are in the market or are incentives to ensure that we get the right mix. I do not think that it would be right for the IPC to do it—and it is noteworthy that the IPC itself, when asked about that in the DECC Select Committee, made that point, too. The noble Lord, Lord Teverson, raised the issue of energy efficiency. Of course, he is right; we need to do more on energy efficiency, but again that is not an issue for the national policy statement or the guidance that is given to the IPC. That, again, is for the Government to set out their policy and ensure that it is implemented. I listened with a great deal of interest to the question about Dungeness raised by the noble Lords, Lord Jenkin and Lord Dixon-Smith. I was somewhat worried because the noble Lord, Lord Jenkin, suggested that I may have given too much hope in this regard. I clearly said that these are draft national policy statements. The Government are listening very carefully to the comments that have been made. We will come to the Dungeness issue in due course, so perhaps we should resist talking about it any more until we come to the nuclear national policy statement, which sets out the reasons why we decided not to choose the site. However, we are listening to the points that are being put to us. The right reverend Prelate raised the subject of climate change and the impact of flooding. I reassure him that all nominated sites were assessed through the strategic site assessment for protection against flooding risk, storm surge and coastal processes against projections for sea rise until 2100, which is as far as we have reliable projections. It is not as if that is set in stone. As projections go forward, we expect the regulatory bodies to keep the matter in view. I reassure him on that point. I noted the questions about the appraisal of sustainability and the relationship between the national policy statements and other policy guidance. I make it clear to the noble Lord, Lord Chorley, and my noble friend Lord Judd, that the national policy statements have been drafted to be consistent with planning policy as laid out in the PPSs. The NPSs have primacy for IPC decision-making; the Planning Act requires the IPC to decide in accordance with the relevant NPSs, unless certain circumstances apply, including whether the adverse impacts outweigh the benefits. I am very clear that what is set out here is consistent with other government policy.