Select Committee on Environmental Audit Minutes of Evidence


Examination of Witnesses (Questions 180 - 199)

WEDNESDAY 6 FEBRUARY 2002

DR BRIAN COUNT, DR BRIAN SENIOR AND MR MIKE BOWDEN

  180. So that is your real solution?
  (Dr Count) That is my real solution.

  181. A proper emissions trading system worldwide?
  (Dr Count) Yes, and then it may be more efficient for us to invest in insulation at the retail end rather than expensive production, so that may be a much better use of our capital. That cannot happen overnight but ultimately if you are treating sustainability as a cost burden on the industry rather than an opportunity for smart people to do well out of it, it does not have the centre stage that it deserves.

Joan Walley

  182. Can I move on to the relationship that you have with the different government departments? There has been a reorganisation within governance. I understand that whoever it was who was in charge of energy policy at the DTI has now moved on. Would you tell us a little bit about the quality of the relationship that you have with DTI, with DEFRA? You mentioned in your evidence about the importance of having targets regionally. I am linking that to planning targets as well, relationships with the regional development agencies. You have mentioned joined-up government a few times; how you see the different government departments linking up.
  (Dr Count) Mike will deal with the planning issues. I believe we have good relationships. Anna Walker, who was very influential in the DTI, has moved to DEFRA. That obviously means a little bit of dislocation. Whilst we have the relationships we are confused about how some parts of energy policy rest with DEFRA and some parts of energy policy—

  183. But which parts, in respect of sustainability?
  (Dr Count) CHP, sustainability, and ultimately the environmental regulation rests with the Environment Agency.

  184. Why are you unsure about—
  (Dr Count) No. Ultimately they rest with DEFRA and ultimately DTI has coal policy. We are a little confused about where the driver is for the PIU. Now we are at number ten on the energy review and we would like to see a single one-stop shop for the energy industry. That would be a much simpler process for us.

  185. Greenpeace have recommended that there should be a sustainable development unit. Would you go along with that?
  (Dr Count) I think creating another unit then means we have three stops. I would like to see a single energy base which has in the heart of it the basic policy issue of sustainability, economics and everything. I am probably against creating another unit because we cannot sort out the—

Chairman

  186. But you would not be in favour of amalgamating what there is already?
  (Dr Count) I would be in favour of amalgamating the—

Joan Walley

  187. Across departments.
  (Dr Count) The two departments span the energy industry. Let us have one of those departments having the energy industry there in the entirety of it.

  188. What about DTLR in respect of planning and targets and measurement of and how those targets are met?
  (Dr Count) I think the policing of it can be outside but planning is a difficulty we have.
  (Mr Bowden) You mentioned planning.

  189. You have mentioned it in your submission.
  (Mr Bowden) Yes. National Wind Power is a wholly owned subsidiary of ours. It is the largest wind generator in the UK. Their experience on the planning front is most informative. Their experience is that generally they get positive planning feedback and decisions from local communities. It is when the issue goes beyond the local to the regional and beyond that it gets difficult. It is the time that is taken to get through the process. We fully understand and acknowledge that due process has to be gone through and there is no one right answer to what amounts to due process. I will just point out one example and, given the pronunciation problem that is just about to confront me, I am glad that Mr Thomas has left us. I believe the wind farm, which is known as Gelligaer in Wales, is a 20-megawatt site. The application for planning was submitted in July 1999. There was a substantial majority in favour of the application at the Merthyr Tydfil Borough Council, March 2001. I do not think we would have too much to say about that gap. The issue was called in by the Welsh Assembly. We were told last month, January 2002, some 20 months after the initial application, that a public inquiry would be called and we would estimate that that is another one to two year delay. That is an astonishingly long time and the sort of length of process that is bound to impact on a developer's initial decision as to whether to approach an application in the first place.

  190. Are you therefore adding a further dimension to this issue about joined-up government, saying that it applies as much to the Scottish and Welsh Parliaments?
  (Mr Bowden) It is across the patch. It is due process but also the efficiency of process and the joined-upness of process.
  (Dr Count) It is much quicker for us to get planning in Scotland than it is in England and Wales, considerably so, and especially as we read a policy document in which the Government said it was for the local community to decide. We have had two or three occasions where the local community has definitively decided they want something and yet the Government authority have said, "We will have a public inquiry". Why? It is not counter to Government policy here. I thought we were trying to push on an open door.

Mr Francois

  191. Why is it so much faster in Scotland?
  (Mr Bowden) All I can say is that our experience is that the Scottish Executive and the planning authorities are more proactive. I do not think there is any suggestion that there is not due process in Scotland. It is just a more streamlined process.
  (Dr Count) Perhaps they are working off the same agenda.
  (Mr Bowden) I cannot explain why that should be.

Ian Lucas

  192. Have you spoken to the National Assembly for Wales about their policy towards wind farms?
  (Mr Bowden) I am sure our subsidiary has done in great detail.

  193. Are you aware of any particular difficulty that exists for them? I think you have got a particular problem in Wales.
  (Mr Bowden) We are struggling to understand what the issue is. Once one understands the issue there is a prospect of management doing something about it. At the moment there is a sense of frustration over the time period and I am not sure we have any clear understanding as to what the underlying issues might be.
  (Dr Count) We can write a note. We do not have any details of meetings but our wind power people have had prolonged discussions.

  Ian Lucas: I represent a Welsh seat, Wrexham, and I would be interested to know.

Chairman

  194. Can you do a note for us?
  (Dr Count) We can do a note on that.

Joan Walley

  195. In the absence of our colleague, Mr Savage, who has given his apologies to our meeting day, it would be very helpful to have that comparative view of England, Scotland and Wales. Finally, you mentioned in your submission public understanding of the renewables agenda. Is there anything you would like to recommend should be taken up by this Committee and pursued in terms of helping to widen public understanding of this whole issue, which is intimately related to the whole process of planning consents and so on?
  (Dr Count) Clearly communications of the benefits of carbon reduction could be helped further. The second issue is that consumers will buy into the concept as long as they can see tangible things happening. I would only say from my evidence that at my retail end, at the mass consumer end, there is less understanding and certainly no willingness to pay differential pricing. There is a much better understanding of the issue at the industrial large user end. There is a willingness to have tailored products, so from our retail experience there is a job in communicating to the average consumer.

  196. How would you do that?
  (Dr Count) I have not really thought. I would like to come back on that.

  197. We would love to hear your views on that. It is an important issue.
  (Dr Count) My instinct is that if we are advertising our wares we go on the TV and do national advertising primarily in the visual media.

  198. It is a big barrier, is it not?
  (Dr Count) It is a big barrier and it is not cheap. We spend £20 million a year in national media advertising for our product out there.

Chairman

  199. Your latest memorandum is much more gloomy about the prospects of exploiting the Non-Fossil Fuel Obligation than you were earlier in the year. Is that because the whole thing is grinding to a halt and is in effect sterilised, or what?
  (Dr Count) Broadly speaking we are slightly more gloomy. I would not say we were much more gloomy. Ultimately the old NFFO sites hand their renewable certificates to the Non-Fossil Agency, so we are really waiting to see whether there are better opportunities if we can get comfortable with the political risk with the new renewable certificates. From our end as a major supplier of some 25 per cent of the nation's electricity I am really keen on making sure that I get the renewable certificates that meet my obligations there. Lastly, some of the bids that were put in I think were unrealistic in terms. It just comes into reality now that perhaps returns are not attractive enough. It is those three issues.
  (Mr Bowden) But there is no doubt that the Renewables Obligation has had a major impact as well on the NFFO issues. The NFFO contracts are tied to particular sites. If a site has a NFFO contract it cannot be used for a Renewables Obligation project. I think the market believes that the NFFO 4 and 5 projects are unlikely to be developed. The portability of NFFO that some have asked for, which theoretically frees the use of the site from NFFO constraints, we do not think helps because at the end of the day those NFFO contracts are probably priced lower than the price expected under the Renewables Obligation and I think one might see that an appropriate response might be to offer the ability to rescind NFFO contracts by secondary legislation which would free things up and allow industry to look more proactively at projects under the Renewables Obligation.

  Chairman: Thank you very much; that is very good. Thank you very much indeed for coming this afternoon. It has been a long session but a very interesting one. We look forward to receiving your notes on the planning issues and on the England and Scotland differentiation, and on the publicity issue. Thank you.





 
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