Newsletters from No 10: 17 November 2009
Dear friends
As I hope you may have noticed, last week the Government published its National Policy Statements on energy, including the possible sites for new nuclear power stations and our policy framework for new coal and carbon capture and storage. These announcements mark a crucial step in the delivery of the Government’s Low Carbon Transition Plan; I thought you might be interested in a summary. In the next couple of days (if I may) I would like to update you on prospects for Copenhagen, on which there has been some misleading commentary recently on what can and cannot be achieved - but absolutely no weakening of the Government's goals.
National policy statements and the new planning system
The six National Policy Statements on energy (along with others for transport, the first of which, on ports, was published at the same time) are a core element of the new planning system for major infrastructure projects introduced by the 2008 Planning Act. As Gordon Brown originally envisaged when he initiated the reform process as Chancellor, from next March there will be a single planning and consenting regime to replace the myriad different (and frequently sequential) processes which caused such duplication and delay in the past. It will now take one year from the acceptance of a planning application to a decision. Small-scale projects (eg onshore windfarms under 50MW) will continue to be dealt with by local planning authorities.
At the heart of the new system is the distinction between national policy and local planning decisions. The need for new infrastructure must now be set out by the Government in draft National Policy Statements and subjected to public consultation and Parliamentary scrutiny. Once these policy statements have been properly considered by those national democratic processes, there must then be a local planning process to determine whether or not any particular site is appropriate or not. That will now be conducted not by the Government (acting, as in the past, as both prosecutor and jury) but by an Infrastructure Planning Commission made up of independent planning inspectors. The IPC must be guided by the regional and local plans drawn up by local authorities. This distinction will avoid the domination of local planning enquiries by national policy questions which was such a prominent feature of the old system (only 30 of the 340 days of the Sizewell B planning enquiry, for example, were about the local impacts). The Government hopes thereby to combine both a properly national and parliamentary debate about the country’s energy and other infrastructure needs with much more detailed public participation and local consultation about the specific local impacts of particular projects.
As many commentators have acknowledged, if we had not reformed the planning system in this way it would be impossible to achieve our energy security and low carbon objectives. So these NPSs are critically important. There is one overarching policy statement on energy as a whole and one each on fossil fuels, nuclear, renewables, transmission networks and oil and gas pipelines. They will now go to an extended 15 week consultation (to 22 February). Parliament scrutiny has already started and will continue for several months. The full statements are available at https://www.energynpsconsultation.decc.gov.uk/.
New nuclear
As part of the nuclear NPS the Government has announced the ten sites which, after a mammoth process of scrutiny, including a Habitats Directive assessment and Appraisal of Sustainability, are judged potentially suitable for new nuclear power stations. These are all next or near to existing nuclear sites: Sellafield, Braystones and Kirksanton in Cumbria, Heysham, Lancs; Wylfa, Anglesey; Oldbury, Glos; Hinkley Point, Somerset; Bradwell, Essex; Sizewell, Suffolk; and Hartlepool, Co Durham. The eleventh nominated site, Dungeness in Kent, has been judged unsuitable due to its unique local habitats and risk of coastal erosion. Three further potential sites were also examined, but each was found to have serious impediments which made them not credible for deployment by 2025. A programme of local consultations on the ten chosen sites has now been established prior to any planning applications being made.
The NPS explains the Government’s conclusion that, on the basis of the science and international experience, effective arrangements to manage and dispose of the waste from new nuclear power stations will be in place. As you may know, the Government's White Paper Managing Radioactive Waste Safely, published last year, was accompanied by a call for communities to express an interest in opening discussions with Government, without commitment, on the possibility of hosting a geological disposal facility at some point in the future. The Government is pleased that so far three local authorities (Copeland BC, Allerdale BC and Cumbria CC) have 'expressed an interest' for two areas (Copeland and Allerdale) and we hope that others may also do so. Separately, as part of the multiple processes the Government has instituted to enable new nuclear, a further consultation has been launched by DECC on two reactor designs.
New coal and CCS
Following the Government’s original announcement in April, and after an intensive period of consultation, DECC also published last weekA Framework for the Development of Clean Coal (http://www.decc.gov.uk/en/content/cms/consultations/clean_coal/clean_coal.aspx) which sets out the Government’s policy on new coal-fired power stations and carbon capture and storage (CCS).
From today no new coal-fired power station will be consented unless it demonstrates CCS on at least around 400MW of output from its initial operation. That represents around 25% of the capacity of a major super-critical power station using post-combustion capture technology, or a higher percentage on a smaller plant. Where pre-combustion technology is used, the figure will by definition be 100% of coal-using capacity (since the coal is gasified and the CO2 captured before combustion occurs). At the same time the Government has confirmed that, where post-combustion technology is used, the plant will be expected to fully retrofit CCS (ie on 100% of capacity) by 2025. If this proves not to be a viable option, a rolling review to report in 2018 will consider the need for alternative policies, such as potentially an Emissions Performance Standard, to constrain emissions.
Since CCS will not be demonstrated at present carbon prices without additional assistance, Ed Miliband has confirmed that a new CCS Incentive will be introduced as part of an Energy Bill proposed for the forthcoming Parliamentary session. Importantly, and responding to the consultation, he announced that powers would be taken for the Incentive to cover retrofit as well as initial installation. So the Government will go ahead with its programme of support for up to four CCS demonstration plants. We’ve been able to confirm that two final bids have been received for the competition for the first CCS plant - from E.ON at Kingsnorth and Scottish Power at Longannet. These will now proceed to the next stage of the demonstration competition, with contracts for the detailed design stage expected to be concluded early next year. The Government has announced up to £90m funding for engineering design work. In addition, the European Commission has provisionally selected Powerfuels to receive €180m to develop a pre-combustion CCS power station at Hatfield in Yorkshire. So the Government's ambitious CCS programme remains very much on track.
Overall...
... these announcements represent another big advance in implementing the vision of a 'green technology revolution' which Gordon Brown set out two years ago (http://www.number10.gov.uk/Page13791). We've now got three consortia of energy companies publicly stating that they want to build 16 GW of new nuclear power stations in the UK (that’s more than our current nuclear generating capacity), we have the most radical coal and CCS policy in the world, and one of the most rapid growth paths for renewables. And unlike some critics, who (if I may say this) claim to support the ends but are not willing to support the means, the Government has shown through both our planning reforms and our financial commitment that these are not just plans on paper; we are determined to see them realised. It was notable that in the same week that the NPSs were published, DECC and HMT announced up to a further £1.4bn in loans for onshore windfarms through the European Investment Bank and three UK-based banks, a further tranche of the Government's Budget support package for investment in renewables.
And while I am at it, I can't help saying that the criticism that the Government should have done this several years ago is rather odd: we did start this process several years ago, which is why we already have a Planning Act on the statute book and an advanced planning and licencing process for new nuclear. The new policy framework is right on time for the investment decisions which energy companies need to make, as their very positive reaction to the announcements confirmed. Talk of 'the lights going out' in the middle of the next decade is completely off the mark: although 18GW of generating capacity is due to close by 2018, there is already over 20GW under construction or with planning consent and grid access, and a further 7.5GW now seeking consent.
AND FINALLY... OTHER GOOD NEWS
Although these emails are meant to be about the Government's energy and climate change policy, you will forgive me I hope for including this time some other environmental news. Last week the Government's Marine and Coastal Access Act was given Royal Assent. The Prime Minister and the whole Cabinet are immensely proud of this piece of legislation, the first of its kind in the world. The Act creates a new marine planning system designed to bring together the conservation, social and economic needs of England's seas, including a network of Marine Conservation Zones to protect rare and threatened species and habitats. It creates a streamlined consenting and licensing system for marine developments under a new Marine Management Organisation, and - perhaps most proudly of all - a single coastal path around England to give universal public access. See http://www.defra.gov.uk/environment/marine/legislation/index.htm for more details.
And for good measure, Hilary Benn announced at the same time the creation of the South Downs as England's ninth National Park. An excellent day all round.
With best wishes
Michael Jacobs
Michael Jacobs
Special Adviser to the Prime Minister
10 Downing St
London SW1A 2AA
