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Draft National Policy Statement for Fossil Fuel Electricity Generating Infrastructure (EN-2)

I am dealing with its regulatory function. I accept the point that the Minister has made and I have discussed it with Mr Buchanan. It has estimated the average cost impact per household customer—this applies to gas and electricity—of the main environmental schemes in 2008, 2015 and 2020. There is quite a list of them because it includes the cost of the EU Emissions Trading Scheme, the renewables obligations, the feed-in tariffs—they are not yet available—and the renewable heat incentive, which is not yet available. But you have the Carbon Emissions Reduction Target scheme. You will have the CCS levy and you will have smart meters. I shall repeat a figure that I have quoted in speeches on the Floor of the House, basing my calculations on Ofgem. In 2008 the addition was £79 a year to average household gas and electricity bills. By 2015, it is estimated that the annual addition will be somewhere between £153 and £205 per annum, and by 2020 it will be between £294 and £426 per annum. I simply do not believe that any government could remotely tolerate that sort of addition to electricity bills and its extremely difficult impact on the vast majority of households, quite apart from its impact on industrial competitiveness. When one looks at the renewables obligation as a part of that, the cost of offshore wind goes up from £10 in 2008 to between £70 and £80 in 2020, a seven or eight-fold increase. That is why I say that it is simply impractical to think that someone is going to spend £75 billion on offshore wind, with all the huge costs that involves, while of course being subsidised by the renewables obligation certificates in order to be able to afford it. When one considers that offshore wind costs seven or eight times as much as a gas-fired power station and probably several times the cost of nuclear, it becomes quite unreal. What is the Minister’s estimate of the additional costs of these environmental schemes, and particularly of the ROCs, if they are going to secure all that additional wind power? I want to say a few words about gas storage as detailed in EN-4. It is now recognised that we need much more to ensure security in the supply of gas in case of an interruption in that supply, although hopefully not the kind of disaster that my noble friend Lord Crickhowell suggested might possibly happen in some of the terminals. Past planning applications have led to huge delays because of an enormous amount of misunderstanding of what they were all about. When I was Minister for Energy I had to face the problem of the proposal to build an underground gas storage facility at a place called Hirwaun in south Wales. The local population were quite convinced, of course, that it was going to get an underground bomb. We took the local people up to the north-east in coaches where there are such facilities for the storage of gas underground, but I have to tell noble Lords that it made not a blind bit of difference. I do not know what happened to the Hirwaun application because after that we lost the election and I ceased to be the Minister for Energy. It is quite right that these proposals should go to the IPC, and it is hoped that they will be able to deal with these things more speedily. But this is only about onshore gas storage; that is made clear in paragraph 2.6.1, which I do not need to read out. DECC remains responsible for offshore storage, as set out in paragraph 1.4.5, which again I do not need to quote. The IPC process is subject to tight timetables, so can the Minister tell us what the timetable is for settling applications for offshore gas storage? Finally and more briefly, I hope, I should like to say a few words about networks. DECC has received very comprehensive responses to its consultation from a number of bodies, including one from the Energy Networks Association, which contains a lot of useful points. I want to raise two of those with the Minister. The IPC process applies to above-ground lines of 132 kilovolts and above and, as he explained at the beginning of the debate, other networks associated with a nationally significant infrastructure project. All others remain subject to the normal town and country planning process. It is very important that there should be consistency between the two planning systems so that there will not be differences between the IPC on the one hand and the local authorities and DECC on the other. One asks, therefore, whether the national planning statement should be a relevant planning consideration for all above-ground lines and other infrastructure, including things such as transformer stations. Perhaps the Minister would like to comment. My last point arises out of last year’s report from a body called the Electricity Network Strategy Group about Great Britain transmission strategic investment. I suspect that the public know little about ENSG. It calls itself a, ""high level forum bringing together key stakeholders in electricity networks to support government in meeting the long-term energy challenges of tackling climate change and ensuring secure, clean and affordable energy."""The Group is jointly chaired by the Department of Energy and Climate Change (DECC) and Office of Gas and Electricity Markets (Ofgem). Its aim is to identify and co-ordinate work to help address key strategic issues"." One could go on, but I will not. In an appendix to its report, it has produced what one might call an order of priorities for network investment. It is in several different categories, including least regret, which are clearly the ones that should come first— there is a whole list of them—and low regret, which are projects to commence design and consenting, and a number of others; and then there are a few strategic investments but with no immediate work required. One purpose of the ENSG exercise was to establish those priorities. The question, therefore, is: what is the relationship of that report to what is being referred to the IPC under this planning procedure? As I understood it, the IPC has always to deal with each application that comes before it separately. The ENSG aims to prioritise projects. I would be very grateful if the Minister could explain how two processes will interact. I have asked rather a lot of questions, and I look forward to the answers.