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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