Select Committee on Environment, Transport and Regional Affairs Report


Memorandum by the Severn Tidal Power Group (CC 21)

THE UK CLIMATE CHANGE PROGRAMME

INTRODUCTION

  1. The Severn Tidal Power Group (STPG) is a joint venture between six of the UK's leading power engineering and construction companies.[19] It was formed in 1984 following publication of the favourable report of the Severn Barrage Committee[20] which identified the viability of an electricity generating barrage in the Severn Estuary to capture the energy form the world's second highest tidal range. STPG has been entrusted with the development of the Severn Barrage project ever since.

  2. The Severn Barrage Committee was set up by government following the oil price crisis of the late 1970's to examine the engineering options and technical feasibility for the project, its contribution to the security of electricity supplies and the wider regional benefits that would ensue. The miners' strike and the Chernobyl catastrophe raised further concerns in regard to security of UK electricity supplies, and in 1986 a definitive £4.2 million study of the Severn Barrage was commissioned by the Secretary of State for Energy, funded jointly by the Government, the CEGB and STPG.

  3. This study, reported in Energy Paper 57,[21] confirmed the technical feasibly of the project and included discussion of the environmental effects, regional implications and estuary management issues. Detailed reports have also been published by ETSU between 1989 and 1994, including further studies on environmental and regional issues.

  4. As a consequence of the privatisation of the electricity industry in 1990, a study of how the Severn Barrage Project may be financed was postponed until the new market conditions stabilised. In 1993, STPG proposed that a full financing study should be undertaken to examine how the project could be taken forward as a joint venture between the public and private sectors in the spirit of the recently announced Private Finance Initiative. Unfortunately, the decision by government to cease the funding of further research as tidal power appeared uneconomic precluded the implementation of this essential study.

  5. A new proposal by STPG to examine how the project could be taken forward was submitted to the DTI in September 1997. In February 1998, STPG was invited by the President of the Board of Trade, the Rt Hon Margaret Beckett MP, and the Energy Minister, John Battle MP, to discuss the project in the light of the Government's targets for sustainable development and renewable energy. It was concluded that because of the very long term nature of the project it was doubtful that the Severn Barrage could be financed solely in the private sector. The priority was therefore identified as a new appraisal of the project to take into account the changes in the electricity market, the different attitudes to environmental issues, and the PFI experience of public sector/private sector joint ventures which value the wider regional, economic and environmental benefits. STPG has sought the Government's support for this essential new research and eagerly awaits a response.

THE SEVERN BARRAGE PROJECT

  6. An electricity generating barrage across the Severn Estuary, to capture the energy from the second highest tidal range in the world, will produce, on average, 17,000 million kWh each year, or some 6 per cent of the annual electricity demand of England and Wales. If it were to replace coal fired generation, it would enable the UK to reduce its total annual CO2 emissions by 16 million tonnes, approximately 3 per cent of the UK's carbon emissions from all sources. If detailed development of the project is commenced now, power would be available from around 2012, throughout the next century, and beyond.

  7. The Severn Barrage is therefore the largest single renewable energy project able to make a significant contribution to UK electricity supplies in a reasonable time scale. When fully commissioned it would make a major contribution towards the Government long-term targets for renewable energy and the reduction of emissions of greenhouse gases.

  8. The project will cost some £10 billion and require 200,000 man years of employment, representing 35,000 jobs at peak, many of which will be away from the barrage site in the manufacturing regions of the UK. The project will also bring significant regional benefits through the more benign conditions that will be created in the basin above the barrage and from a fourth crossing of the estuary. Substantial growth is anticipated in the Severnside region with an estimated 40,000 jobs being created.

  9. In the light of the recent discussions at the Kyoto and Buenos Aires conferences, pollution free electricity from the Severn Barrage will be a valuable asset in regard to internal emissions trading, particularly if new coal fired stations are to be considered.

  10. Unlike most other renewables, tidal power is predictable and with reasonable maintenance the Severn Barrage will have virtually indefinite life. Its contribution can therefore be planned within a comprehensive long-term energy policy.

RESPONSE TO ISSUES IDENTIFIED IN THE ETRA COMMITTEE'S PRESS NOTICE 82/97-98 (19 NOVEMBER 1998)

The desirability of the options contained in the UK Climate Change Strategy in the light of non EU countries' commitments

  11. World population is predicted to grow such that by 2020 nearly 85 per cent will be in the emerging nations. These people will demand the services that energy can provide: heating; cooling; cooking; lighting; mobility and motive power.

  12. The demand for energy is therefore expected to double by 2020 in comparison with 1990 levels requiring that, if greenhouse gas emissions are to be stabilised, either this increase in energy must come from non-fossil fuel sources, or that carbon sequestration techniques are developed in conjunction with fossil fuel energy conversion technologies.

  13. Development of appropriate technologies and strategies to meet the UK's own targets will enable British industry to export these technologies in the growing world markets, especially those of the emerging nations.

  14. Significant reductions in the UK's own emissions will enable it to play a leading role in emissions trading.

The role of the climate change strategy as the first step towards greater reductions in the longer term, i.e., beyond 2010, with particular reference to behavioural change.

  15. The three most important elements of the climate change strategy are:

    —  to place greater emphasis on energy saving through improved efficiency and better energy management;

    —  to introduce controls to reduce the use of energy for transport, particularly the use of fossil fuels;

    —  to place greater reliance on the use of renewable energy for electricity generation.

  16. People will continue to demand the services that energy can provide and government should not seek to restrict or regulate access to these services. Government's aim should be to educate and encourage people to moderate the way they use the services energy provides and to avoid unnecessary use, using price differentials, where appropriate. The main drive, however, should be towards research to seek ways whereby the services can be provided more efficiently and without waste.

  17. The climate change strategy has three apparent weaknesses.

  18. Firstly, it places too great an emphasis on the contribution that combined heat and power (CHP) installations may make. CHP can only show greater efficiency in energy conversion compared with individual heat and electricity generation when the heat and electricity loads are matched. This state does not normally occur continuously throughout the diurnal cycle and CHP is much less efficient than individual generation when generating with one mode dominant.

  19. Secondly, the climate change strategy does not recognize properly the significance of the development of fuel cells which make use of the hydrogen cycle. These are now well advanced and by 2010 should be able to make a real contribution, particularly in the transport sector. The economic production of hydrogen by electrolysis will increase the demand for carbon-free electricity either from the renewables or from nuclear power.

  20. Thirdly, the climate change strategy does not address the time scale for replacing the UK's ageing generating capacity (coal, oil and nuclear) much of which will be reaching the end of its economic life post 2010. Realistically, the only technologies capable of replacing this plant, in addition to gas, are the large scale renewables (e.g., off-shore wind and tidal power from the Severn), nuclear and "clean" coal. All but gas require some 10 to 15 years for design development, the UK planning process, construction and commissioning.

  21. Gas-fired generating plant will produce electricity at about half the cost of these other options, although for the Severn Barrage, the cost of electricity generated following payment of the development and construction debt will about half that of gas.

  22. Insufficient certainty in market prices, and thus also in rate of return for these high capital cost projects, suggests that the private sector may be unwilling to make the necessary investment and that intervention by government in the market will therefore be required.

  23. Replacing generating capacity also requires consideration of environmental questions other than lower emissions of the greenhouse gases. Unless existing power station sites are used, as would be possible with nuclear power or coal, substantial infrastructure development is necessary. Moving from the present sites would also lead to loss of jobs, although new jobs would be associated with new locations. In the case of the Severn Barrage, the regional development opportunities associated with the more benign conditions in the barrage basin are estimated as creating an additional 40,000 jobs.

The Government's timetable for producing and implementing the Climate Change Strategy

  24. See comments in paragraph 20 above.

  25. Further research to establish which renewables can realistically make a significant contribution, taking into account the wider social, economic and environmental effects, is essential for long term planning and to generate business confidence to ensure the necessary investment is made.

  26. For example, we understand that a study is being undertaken by the University of Liverpool's Centre for Marine and Coastal Studies to compare the environmental impact of tidal power from a single site in the Severn Estuary with the impact from the 15 or so off-shore wind power station sites that would be necessary to provide an equivalent installed capacity.

The role of different sectors of the economy in meeting the emissions reductions targets and the merits of sectoral targets

  27. Tidal power from the Severn Estuary could provide some 6 per cent of the annual electricity requirements of England and Wales with no emissions of greenhouse gases, thereby saving some 3 per cent of the UK's annual carbon emissions from all sources by comparison with coal. It is the only predictable renewable energy source able to make a significant contribution to the Government's targets within a reasonable time scale.

The policies from the consultation paper on Climate Change Strategy which will be required to meet the UK's legally binding target for the basket of six greenhouse gases and the domestic target for carbon dioxide emissions

  28. See comments in paragraph 15 above.

The uncertainties involved in emissions projections and the impact of policies upon those projections

  29. No comment.

The mechanisms required to monitor the effectiveness of policies in reducing emissions

  30. No comment.

The extent to which "flexible mechanisms" should be used in achieving the legally binding target

  31. Internal emissions trading would allow the carbon free electricity from the Severn Barrage to be matched with re-planted coal-fired stations, thus enabling some 15 per cent of the UK's annual electricity requirements to be generated with a net saving in carbon emissions of 3 per cent. Similar trading between replacement nuclear power and coal/gas would ensure that the targets are no more onerous to achieve when existing nuclear stations reach the end of their economic lives.

The economic and other costs of the options in the Climate Change Strategy

  32. In paragraph 22 we suggest that intervention by the Government in the electricity market may be necessary to ensure that the best investments are made in regard to a long-term electricity generating policy. The necessary data on which to base informed decisions does not exist for many of the renewables, in particular, how renewable energy may be traded in a liberalised market and what is the full environmental impact of conversion for different energy sources.

  33. If the wider social, economic and environmental benefits are to be valued, mechanisms must be established which properly reflect the long-term nature of these benefits and the "value for money" that accrues from them.

  34. In the case of the Severn Barrage Project, no proper financing studies have been undertaken to establish the nature and extent of the public sector support required to ensure the project can proceed. A new appraisal of the project is essential to separate the infrastructure and regional benefits, including coastal protection, from the power generation aspects of the project so that the cost of electricity can be properly compared with that from the other major UK energy sources.

S J Taylor

Chairman, Management Board

5 January 1999


19   Members of the Severn Tidal Power Group are: Sir Robert McAlpine Ltd. Balfour Beatty Major Projects Ltd. ALSTOM Hydro Ltd. Rolls Royce Power Engineering Ltd. Taylor Woodrow Construction Ltd. Tarmac Construction Ltd. Back

20   "Tidal power from the Severn Estuary"-Volume 1: Energy Paper 46; HMSO 1981. Back

21   "The Severn Barrage Project: General Report": Energy Paper 57; HMSO 1989. Back


 
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