The Severn Barrage 22 May 2008

Transcript of Proceedings

May 2008 Intentionally Blank The Severn Barrage Thursday 22 May 2008

Introduction

The Severn Barrage proposal has been in existence for many years, but the more urgent need for low-carbon electricity generation and the adoption of legally binding national targets for renewable energy generation mean that the proposals, together with other tidal range power options in the Severn Estuary, are now receiving renewed attention from Government and industry.

If the barrage were to be built, it would rank as one of the largest and most costly engineering projects ever undertaken in the UK. Its impact on the ecology of the Severn Estuary would be significant, but in a political environment where reducing greenhouse gas emission is so high, a balance must be struck between the environmental benefits and the ecological damage. A single “power plant” with a 7GW capacity will have implications for how the electricity market operates, especially as it will be intermittent, following the tidal cycle.

Inevitably, the size and cost of such a project will bring its own project management problems to be overcome. The UK has demonstrated that it is capable of building single projects the size of the Channel Tunnel Rail Link, but issues surrounding the financing, contracting and ownership of the scheme will be of paramount importance.

Programme

15:00 Registration 15:15 Chair’s Introduction – Sue Ion OBE FREng Vice President 15:20 Malcolm Wicks MP, Minister of State for Energy 15:40 Prof Roger Falconer FREng, Cardiff University – Severn Barrage Proposals, Problems and Possible Solutions 16:10 Dr Doug Parr, Greenpeace UK – Environmental Impacts and Balances 16:40 Paul Golby, E.ON UK (TBC) – The Electricity Industry’s Response to a Severn Barrage 17:10 Yaver Abidi, Halcrow Group – Financing and Project Management Challenges 17:40 Discussion Chaired by Sue Ion FREng 18:00 Reception

1 2 The Severn Barrage (22 May 2008) Speaker Biographies

Dr Sue Ion OBE FREng

Dr Sue Ion was Group Director of Technology and Chief Technology Officer of British Nuclear Fuels plc, a position she held from 1992 until 2006. Dr Ion was elected a Fellow of the Royal Academy of Engineering in 1996 and awarded the OBE for services to the nuclear industry in 2002. Dr Ion has held a number of non-executive directorships associated with technology-based businesses and consultancies. Dr Ion represents the UK on a number of international review and oversight committees including the International Atomic Energy Agency Standing Advisory Group on Nuclear Energy and the Euratom Science and Technology Committee. Dr Ion is currently Vice President of the UK's Royal Academy of Engineering and a member of EPSRC's Council. She was formerly a member of Council of the Particle Physics and Astronomy Research Council. She is a non Executive Director of the Board of the Health and Safety Laboratory.

Malcolm Wicks MP

Malcolm Wicks was appointed Minister of State for Energy on 29 June 2007. Mr Wicks was previously Minister of State for Science and Innovation (November 2006 to June 2007) and, before that, Minister of State for Energy (May 2005 to November 2006) at the Department of Trade and Industry. Before joining DTI, Mr Wicks was Minister of State for Pensions (June 2003 - May 2005) and Parliamentary Under Secretary of State for Work (June 2001 - June 2003) at the Department for Work and Pensions and Parliamentary Under Secretary of State for Lifelong Learning at the Department for Education and Employment (appointed July 1999). Mr Wicks was the Chairman of the Education Select Committee from 1998 until his appointment as a Minister. He has been Member of Parliament for Croydon North since 1992. Mr Wicks has been a member of the Social Security Select Committee. His Private Member's Bill, now the Carers' (Recognition and Services Act), came into force in April 1996. From 1995 Mr Wicks was the Opposition spokesperson on social security.

Mr Wicks was educated at North West London Polytechnic and the London School of Economics. Between 1974 and 1977, he was a university lecturer and from 1968 to 1974 a social policy analyst at the Home Office. He was Director of the Family Policy Studies Centre before entering Parliament. He is the author of several books and reports on aspects of the welfare state.

3 Professor Roger Falconer FREng

Roger Falconer is Halcrow Professor of Water Management and Director of the Hydro-environmental Research Centre in the School of Engineering at Cardiff University, U.K. He was previously Professor of Water Engineering and Head of the Department of Civil Engineering at the University of Bradford. He graduated with a PhD from Imperial College, London, in 1976. He manages a range of research contracts on modelling flow (including flooding), water quality and sediment transport processes in coastal, estuarine and river waters and has published over 300 papers and technical reports in the field. Roger is a Fellow of the Royal Academy of Engineering and the City and Guilds Institute of London. He was awarded the 1999 Royal Academy of Engineering Silver Medal, the 1994 Institution of Civil Engineers (ICE) Telford Premium and the 1991 International Association for Hydraulic Research (IAHR) Ippen Award. His computer models have been used extensively in over 100 Environmental Impact Assessment studies worldwide and he has served as a member of council of several institutions, including the ICE, CIWEM and IAHR.

Dr Douglas Parr

Dr Parr is the Chief Scientist and Director of Policy at Greenpeace UK, looking after the science and political lobbying functions. His current focus is on tackling climate change in the power, heat and transport sectors. He joined Greenpeace 14 years ago, and has worked on a number of technical and policy issues including GM crops and agriculture, chemicals legislation, green refrigeration, biofuels and nuclear power. He obtained a D.Phil in Atmospheric Chemistry in 1991.

Bob Taylor

Bob has been a Board Member of E.ON UK since 2001 and was appointed Managing Director, Generation in July 2007. His Board responsibilities include generation, energy related R&D and the long- term development of clean coal and nuclear generation options for E.ON UK. He gained a BSc (Hons) in Electrical and Electronic Engineering from Manchester University (UMIST) in 1983. He then joined the electricity industry and held a number of operational, engineering and commercial roles in the UK and overseas with Powergen plc. Most recently he was Managing Director of E.ON Central Networks (formerly East Midlands and Midlands Electricity Distribution). Bob holds an MBA from Aston Business School and is a chartered engineer and fellow of the IET. He is a Member of Council of the University of Birmingham.

Yaver Abidi

Yaver is a civil engineer with 27 years of experience as a consulting engineer in North America, UK, Asia, the Middle East and Africa. His areas of specialisation are geotechnical engineering for hydroelectric power projects. He is currently group development director for Halcrow Group Ltd. He holds a MSc in Soil Mechanics from Imperial College London and MS in Management from Stanford Business School.

4 ACADEMY BRIEFING: THE SEVERN BARRAGE

Chair: Dr Sue Ion OBE FREng

Keynote Address: Malcolm Wicks MP, Minister of State for Energy

Panel: Professor Roger Falconer FREng Dr Douglas Parr Bob Taylor Yaver Abidi

INTRODUCTION

Dr Sue Ion: Ladies and gentlemen, a very warm welcome to you, here at the home of the Institution of Mechanical Engineers. We are very grateful to the Mechanicals for enabling us to host the event here today rather than at the home of the Royal Academy of Engineering which is now at 3 Carlton House Terrace. The reason for the move is that we cannot currently accommodate the number of people who are interested in today’s event and the Institution of Mechanical Engineers very kindly offered us their lecture hall to take the numbers, rather than disappoint anyone.

Programme

It gives me great pleasure to be here this afternoon. I am Vice President of the Royal Academy of Engineering and Chair of our Engineering Policy Committee. One of the things we have been very keen on over recent times is being able to input opinion on challenging issues in the energy and environment arena. The title of today’s lecture topic, the Severn Barrage, is of course right at the top of the issues in the energy and environmental arena.

This afternoon’s meeting enables the Minister, Malcolm Wicks, to say a few words to us. He had hoped to be with us for the whole of the afternoon but, as would happen in the political arena, with the price of oil going through $140 per barrel this afternoon, this means that he and his officials have to be available to make comments to others. The Minister will stay with us for as long as he can.

We have with us Roger Falconer, Doug Parr, Bob Taylor and Yaver Abidi, to give us seminal talks on the issue and then hopefully there will be a lively discussion which will set the scene for what I am sure will be further debates, going forward.

The history and the debate

The History and the Debate

1849 - Thomas Fulljames 1925 - English Stones Study 1931 - Paul Shishkoff: Avonmouth Prototype 1933 - Severn Barrage Committee 1940s - Nazis plans for after invasion 1948 - Government Study 1953 - Government Study 1971 - Tom Shaw 1975 - CEGB 1981 - Severn Barrage Committee 1984 - Wimpey Atkins 1987 - Hooker Barrage 1989 - Severn Tidal Power Group 2006 - Gareth Woodham

5 The topic in which we are interested today is not new. Back in 1849 there was a proposal for a barrage from Beachley to Aust, which is now the site of the first Severn Bridge, with a span of just over a mile. This was not with electricity generation in mind but for railway transport and flood protection and, since then, there have been many studies. There was the English Stones Study; a prototype by Paul Shishkoff; the Severn Barrage Committee which recommended a barrage over the English Stones area. There were studies by the Nazis, who planned to put one there after they had invaded Britain. There have been two government studies. There is the work by the tidal expert, Tom Shaw, and the CEGB’s serious look at the idea. There is the Severn Barrage Committee, which became known as the Bondi Committee after Professor Sir Hermann Bondi, and there are other studies coming forward today.

The proposals for options for a Severn Barrage are now very much out for consultation. So it is not new, and it is potentially a contributor to our safe and secure and low carbon energy for the UK, going forward. I am sure that this afternoon’s debate will help enormously in aiding the Government to reach some conclusions later on.

Current Feasibility Study

The current feasibility study was announced in January 2008 and it is there to gather evidence and assess high level evidence and to decide whether the Government could and should support a tidal power scheme and, if that is the case, on what terms that should be.

Today’s Severn Barrage meeting

For today’s meeting, we will be looking at the state of engineering and at environmental balances – the balances between low carbon energy versus environmental impact; how such a barrage would fit into a renewable energy strategy; how it affects the rest of the electricity market; how to finance such a project and, indeed, from the Royal Academy’s point of view, the engineering challenges inherent in delivering such a project in the timescales that would be required.

The Severn Barrage

Without further ado, I would like to welcome Malcolm Wicks, our Minister of State for Energy, who will give you the Government’s view, before we move on to the presentations by our other speakers.

6 KEYNOTE ADDRESS

Malcolm Wicks, MP: Sue, thank you very much indeed. Looking at this illustrious audience, it answers that obvious question: how many engineers does it take to build a tidal barrage? Who knows, it may take more.

I was asked in the House of Commons today by a Liberal Democrat if I could estimate the price of a barrel of oil in the year 2020. I said to him that it is really rather difficult to estimate what it might be tomorrow. This reminds us, of course, that for parts of energy policy, Harold Wilson’s old saying that ‘a week is a long time in politics’ still rings true. Interestingly enough, however, the discussions that we are having today give the lie to the generalisations that you can make about a week being a long time in politics. What we are about here, I guess, is discussing rather seriously whether there might be a possibility of a Severn Barrage – constructed and up and running – in 2020, 2021 or 2022, which is really quite a long time period. Of course, our longer time period is even longer because it is about how humankind can now start to reverse the trends in terms of carbon emissions and save the planet.

Our Government has set the target that, by the middle of this century, 2050, we should be aiming – against where we were in 1990, so that it is quite a tough target – to reduce our carbon emissions by 60 per cent. Indeed, Gordon Brown has more than hinted that if the evidence warrants it, we may well increase that figure to 80 per cent. We are therefore embarked on a course here in the UK, across Europe and hopefully across the world, to start to take the carbon out of our economics and our economy. Therefore, 50 years, or 30 or 20 years, is not a long time in climate change politics. We need to look ahead and it is right and proper that we are looking at the feasibility of this most ambitious project.

It is my pleasure to be here today to discuss with you the feasibility study on tidal power in the Severn Estuary. May I thank the Academy for hosting this early discussion of the issues. Your engineering expertise will obviously be invaluable to the success of the study and I look forward to hearing your views during the period for which I can stay here this afternoon and, of course, during the coming months and indeed over the next two years. As you all know, this is a huge and historic project and the feasibility study alone is an ambitious and necessarily relatively lengthy exercise.

As we have just seen – and it is rather humbling to look at the history – proposals for damming or barraging the Severn Estuary are nothing new. The most recent studies in the 1980s looked at the potential for generating electricity by harnessing the estuary’s huge tidal range which, at 14 metres, is secondly only worldwide, so I am told, to the Bay of Fundy in Canada. The conclusion in 1989 was that a barrage was technically feasible and that a barrage from Cardiff to Weston-super-Mare would have an annual output of around 17TWh, which could supply up to perhaps 5% of today’s UK electricity demand. This would allow an annual carbon dioxide saving of over 6 million tonnes or about 1% of UK emissions today. However, the government of the day decided that a barrage was not then a cost-effective option.

Of course, times have changed. The economics have changed and there is no longer any serious debate about climate change and the need to act now to reduce our carbon dioxide emissions is clear. At the same time, we must ensure that we continue to enjoy reliable, safe and competitively priced energy supplies – no small task at a time when prices in global energy markets are sky-rocketing, as I alluded to at the beginning of my remarks, and when a large proportion of fossil fuel reserves is in some of the less stable regions of our planet. These challenges require a diverse

7 and increasingly low carbon mix that includes consideration of all reasonable options. We are acting now as a government to move rapidly in just that direction: we are acting on CO2.

Increased energy efficiency – we believe in nuclear power and we believe that carbon capture and storage for fossil fuel plants all have vital roles to play going forward, as to renewables. We are making rapid progress on offshore wind, as you will be aware, but a potential flagship renewables project is of course this Severn tidal power scheme – a barrage or perhaps a lagoon. This is why, when I led the Energy Review, back in 2006, I asked the Sustainable Development Commission (SDC) to look again at tidal power options in the Severn Estuary and we are of course grateful for their insight and their advice. Their study, which looked at tidal range and tidal stream technologies, reported in the autumn of last year and I was pleased with the key message that tidal power can be generated in the Severn estuary, within sustainable development principles and so it remains an option open for consideration in the context of our developing renewable energy strategy, on which we will be consulting this summer.

As the SDC, advised, much more work needs to be done before a decision can be taken on whether to proceed with a tidal power scheme. For example, we need to use up-to-date modelling techniques to assess and understand the potentiality and considerable environmental impacts. We also need to consider the issue of compensatory habitat and we obviously need to look at costs, financing and ownership issues and also at the considerable regional, social, economic and energy market impacts. This is a massive and extremely complex project and we must take the time to gather a robust evidence base and ensure that all these impacts are truly understood. We are doing this through our feasibility study.

The feasibility study, which will build on the work of the Sustainable Development Commission and earlier studies, will run until 2010 and it will enable us to decide whether and, if so, on what terms government could support a tidal range project or projects in the estuary. The full terms of reference are available in your papers for this meeting. The study will focus on tidal range technologies, including barrages and lagoons because, as the SDC report highlighted, this is where the main resource of the estuary lies.

The study will have two phases, with a decision point at the end of each. The first phase is likely to run until late this year, 2008, will focus on high-level issues, producing a short-list of potential tidal power project options. We will then reach an initial view on whether there are any fundamental issues which mean that the project cannot proceed and, at this point, later this year, there will be an internal decision to either stop or to continue with our evidence gathering and assessments. If the decision is taken to continue, we will then consult on our short-listed tidal power options and the scope of the strategic environmental assessment, about which I shall say a little more later, and begin phase 2, looking at the issues in greater detail and narrowing down to a preferred tidal range scheme. This will culminate, should we reach that point, in a full public consultation in early 2010.

The study is being carried out by a cross-government team led by my department and including representatives of the Welsh Assembly Government and the South West Regional Development Agency. The team are also taking external advice – we want it to be inclusive, engaging interested stakeholders and the public. We are keen to hear your thoughts on how we can best engage with you. We have asked the RAEng to consider who might serve on an independent expert panel, to advise the study on technical and engineering aspects and also to peer review outputs.

8 I would just like to give you a little more detail on what we will be doing over the next two years. The study has been split into six main areas of work as follows.

1. Environmental work, gathering the evidence of the impacts on biodiversity and wildlife, land and seascapes, flood management and geomorphology. Actually, my note says in brackets, “that’s sediment to you”. I don’t know whether they thought that esteemed engineers did not know what geomorphology was, or whether they thought their Energy Minister was not too sure. Can I say that, as a politician, I am frequently up to my neck in the stuff, or worse, so that I am geomorphologically literate. Nevertheless, we are looking at the geomorphology and we are looking at water quality and considering compensatory habitat issues. That is a very important feature of our environmental work. We will be looking at the issue of compensation and mitigation with commitment and imagination, considering – as the SDC suggested – whether there is an environmental opportunity in linking environmental compensation measures to climate adaptation.

2. The second stream of work is about engineering and technical aspects, considering issues such as the cost, design and construction of the proposed tidal power schemes and their potential impacts on the electricity network.

3. The third stream of work is about economics, considering how a project or scheme could be financed, and looking at ownership options. We will be looking at the full range of possibilities, including the need for any government support and we have appointed PricewaterhouseCoopers to provide advice on those issues.

4. Fourth, there are the regional impacts, looking at the regional, social and economic impacts, including the impacts and benefits on local business.

5. The fifth stream of work is about planning and considering regulatory compliance issues, although this will come later in the process.

6. Finally, and very importantly, throughout the project communications work and engagement with interested parties and the public will be key to the successful delivery of our study.

The study will also include a strategic environmental assessment, to ensure a detailed understanding of the estuary’s environmental resource, recognising its national, European and indeed international nature conservation significance. Earlier this month we announced the appointment of a consortium led by consulting firm Parsons Brinckerhoff, to manage the strategic environmental assessment. I am very pleased to welcome the consortium, PB, to the show and to the team because they have a strong engineering and environmental capability. I am confident that they will help, along with your expertise, to develop the robust evidence base which we certainly need.

One of the immediate tasks for the PB team will be to carry out a technical options appraisal of the existing and new schemes in order to narrow them down to a short- list of projects, or a combination of projects perhaps, on which we can base the detailed environmental assessment and other study work next year. This work will both refresh the designs from the 1980s and also work up the less-detailed proposals as needed, looking particularly at updating cost projections and the issue of ebb/flow generation and the trade-offs for generating electricity more evenly.

9 To help inform this work, on 12 May the consortium issued a call for evidence which was in two parts. First, there was a call for proposals, inviting evidence-based proposals for technical and financial information, on proposals for the tidal range power development in the estuary, including information on how previous proposals have been further developed. Second, there has been a call for information, such as information on environmental impacts, which could usefully contribute to the evidence base for the initial appraisal of the scheme. The technical part of the call, the call for proposals, closes on 13 June, while the information part will run until 11 July. The team will then be considering with stakeholders all the information provided, before including the proposed short-listed options in the first consultation at the end of this year, when we will also be consulting on the scope of the strategic environmental assessment.

We want to bring in your expertise and we will be looking forward to doing so, through workshops and expert panels. Please respond to the call for information and evidence or contact the team if you would like to be more involved. Website addresses and contact details for both my department, BERR, and Parsons Brinckerhoff, are included in your papers.

Let me just add this point. I have been impressed by the way in which people have received the possibility of a Severn Barrage and they have appreciated the way we want to work with groups – not least on environmental assessment. I think that is important because I sometimes feel in this country, and perhaps in other countries too, that while everyone seems to be signed up now – and I think this is good – to the science on climate change and the need for action, there is a willingness to will the ends but not the means.

Many projects that come forward to tackle climate change, to reduce carbon emissions – and I suppose that nuclear is the most controversial but it could be the humble wind farm in a locality – are too often opposed by people almost as an instinctive reaction. There is even hostility to the ideas around carbon capture and storage when, moving forward in a world which will be burning fossil fuels, not least in China, we need to develop that engineering and technology. I sometimes think that people are so concerned about the short-term and the impact on a landscape or a seascape that they forget that, unless the world acts on carbon emissions, much of the birdlife and the species they wish to protect could well be extinct within the next 100 years.

We live in a time when government needs to take tough and difficult decisions – sometimes controversial decisions – about how we tackle global warming, and get on the right side of the argument about climate change. However, those tough and difficult decisions are surely not only for government but they are also for citizens and they are certainly for the environmental groups that have led the debate in this country about these important issues.

In conclusion, we know that the Severn estuary has the potential to generate significant proportions of the electricity that we need, from an indigenous, renewable source – saving, as I said earlier, perhaps about one per cent of UK CO2 emissions. We know that we must act now to meet the considerable challenges of climate change and energy security. We also know that a Severn tidal power scheme could have considerable environmental impacts and that is why we are doing more work to ensure that we truly understand all the potential impacts before we take a decision whether or not to go ahead.

10 I hope everyone will keep an open mind, as the Government will, in developing the right solutions to help meet the challenges of climate change and energy security. I look forward to working with many of you as we take this project forward. Thank you very much.

***

Sue Ion: Thank you very much indeed, Minister, for that very comprehensive run- through of government intentions over the next few years. I am sure that people in the audience will have been pleased to hear about the manner in which the Government wishes to conduct the input leading to decisions on the options in the energy sector generally and specifically about the Severn Barrage. You asked how many engineers it would take to build one and all I can say is that, in one of the presentations later on, you will hear that 44,600 workers will be required per year at peak during the construction period, so this is a very significant endeavour in engineering space, as well as in other space.

Let me now introduce Roger Falconer, the Halcrow Professor of Water Management and Director of the Hydro-environmental Research Centre of the School of Engineering at Cardiff University. Roger was previously Professor of Water Engineering and Head of the Department of Civil Engineering at the University of Bradford and he has a long-standing career in the sector with many awards. His computer models have been used extensively in over 100 environmental impact assessment studies and he has served as a member of council of several institutions, including the Institute of Civil Engineers, the CIWEM and the IAHR.

Roger, I would like to invite you to give our seminal talk on the Severn Barrage.

11 12 SEVERN BARRAGE PROPOSALS: PROBLEMS AND POSSIBLE SOLUTIONS

Professor Roger Falconer FREng: It is a pleasure to be here this afternoon. As Sue kindly said, I am sponsored by Halcrow, the leading international consulting engineering company in this field, and truly British.

Challenges and Opportunities

For some reason, the title of this presentation was changed at some stage. This was probably my fault for not properly responding to an email, but it was changed to ‘Problems and Solutions’ and I would like to change it to ‘Challenges and Opportunities’. We have to look at the challenges of this project and the opportunities. No one has been better internationally than British engineers at addressing challenges and British engineers have been second only to the Welsh rugby team in taking opportunities.

The current challenge

First, I would like you to watch this video. [Short video shown: succession of different views about effect of a Severn barrage]

[Referring to video] Three items on BBC news – all of them incorrect. First of all, we were told that the bird population would be 23,000. We were not told that it would halve, but it has actually halved in 10 years according to RSPB figures.

Secondly, we were told that the bore would go but that is not necessarily true. Thirdly, the people in Upton-upon-Severn have had enough problems with flooding, without being told at this stage, before the studies have even started and let alone completed, that the flooding will be worse as a result of the barrage. I hope that you will see later from our computer simulations that it is extremely unlikely that any flooding would occur in the Upton-upon-Severn region as a result of the barrage. This, to me, is one of the big challenges that we currently face: that of misinformation.

General challenges

General Challenges  Growing world-wide increase in demand for energy - particularly in India and China  Tidal energy generation has advantage over wind and waves - tides are predictable  UK target of generating  20% of electricity from renewable resources by 2020  Wales’ 2025 target for marine renewables is 14 TWh/yr - Barrage could generate 65%  Severn Estuary basin is ideal for tidal energy

4

What are the general challenges? We see here the growing worldwide increase in demand for energy, particularly in India and China. I would just like to dwell briefly on the point about China because I do not think we realise what the Chinese actually want. One has the impression, when reading British newspapers, that the Chinese

13 actually want to drive around in four-wheel drive Range Rover cars and so on. However, I have been going to China since 1980 and I have been very fortunate to visit the homes of Chinese people and stay with them.

I have been to Shanghai in the winter and lectured. The reality is that China has less in terms of domestic heating than we had in this country at least 50 years ago – where I was born in West Wales we had one fire in the living room and everyone sat around that. In the living room in China, it is so cold in their homes that you open the fridge to get warm. South of the Yangtze River, there is no heating in the homes, nor hot water. You give lectures in Shanghai Jiao Tong university in the winter and you are there wearing an overcoat and three jumpers and so are all the students. The Chinese are becoming wealthier but they want to spend their money on things that we took for granted 50 years ago, and we need to get that into perspective first.

We are talking today about tidal energy generation, which has many advantages over wind and waves. It is predictable – we can predict it next year, the year after, and so on. The UK target is to generate more than 20% of electricity from renewable sources by 2020 and the Wales target is for that by 2025 14TWh will be produced per annum from marine renewables, of which 65% could be produced from a barrage, assuming that half the energy generated went to Wales and half went to England.

To put that into perspective, the barrage would produce enough electricity generation for the needs of the whole of Wales, 3 million people. The Severn estuary is an ideal basin for tidal energy.

Planned renewable energy provision

Planned Renewable Energy Provision

Considerable Scope to increase

EU target of 20% carbon reduction by 2020

5

This slide shows the planned renewable energy provision for the European Union by 2020. The very narrow line at the top shows the tidal and wave generation and it is very small. This is the area in particular where there is tremendous scope to develop the business in tidal and wave renewable energy.

Mean spring tidal range resource

When we look at a barrage, we are talking about tidal range provision of energy. Here, you can see that there are two very attractive sites, one in the Bristol Channel and the Severn Estuary and the other is along the North Wales coast and the Morecombe Bay area.

14 Severn Estuary

Looking at the Severn Estuary, we see the beautiful beaches on the Welsh Riviera and some beaches on the English coast – not quite the same!

Proposed tidal devices for Severn Estuary

Turning to the more serious point, there are three proposals that are being considered by many parties for energy provision in the Bristol Channel and the Severn Estuary. One is the tidal stream turbines that will basically have the wind turbines in the water column. There are tidal lagoons, referred to generally as offshore tidal impoundments: here we build a wall offshore and basically it is the same as the barrage. Then we have the barrage, which is an embankment across the estuary.

Potential power from tides

Potential Power from Tides  For tidal stream turbines:- Power V 3

V = mean free-stream tidal current  For tidal barrages and impoundments:- Power A H 2 H = level difference across barrage / lagoon A = wetted surface area upstream of barrage

9

If we look at the potential for power from tides, the power is proportional to the cube of the velocity, so we want to locate the tidal stream turbines in areas of high velocity. If we look at the barrage and the impoundments, then the power is proportional to AH2, where H2 is the level difference between the inside and the outside of the barrage or the impoundment. In particular, I would like to draw your attention to the fact that the power is proportional to A, which is the planned surface area. If we want to talk about lagoons, for example, then we need to have a very large area to have the maximum possible energy provision.

EIA studies for all impoundments

EIA Studies for All Impoundments

 Computer models used to predict changes to:- ZTidal currents – speed, levels, eddies, river plumes ZWave climate – height, length, refraction, reflection ZSuspended sediment – distribution along channels ZSediment deposition – in and out of impoundment ZCoastal morphology – changes to beach profiles ZWater quality – turbidity, bacteria, light penetration ZPre-/post-construction – short & long term impacts ZMitigating measures – changes to design/operation

10

15 Then, in all these studies, we would need to carry out environmental impact assessment studies. I will not dwell on this but we would need to look at the tidal currents and how the structure would affect the speed and water levels. Would eddies be formed, and how would the river flumes be affected and so forth, particularly if we were to build impoundments? How would the wave climate change, and how would the wave heights change? What about the wave lengths, refraction, diffraction and so on?

How would the suspended sediment distributions change along the main channels, along the beaches and so on, and the sediment deposition? That will have a knock- on effect on water quality, to which I shall allude later. In the coastal morphology, how will the beach profiles change as a result of building an impoundment or a barrage? How will the water quality change and how will the turbidity change? What about bacteria, light penetration, nutrients, dissolved oxygen and so on?

Then, what will happen during the construction period? I shall come on to that very briefly. In Cardiff Bay we saw considerable impact in the pre-construction stage and the post-construction stage. Then what mitigating measures might we want to implement before any structure is finally built?

Tidal turbines – Swanturbines

Tidal Turbines - SWANTURBINES

SWANTURBINES Concept

 Simple, robust, economic  Environmental impact low - slow blade velocity  Diversification of existing renewables technology  Direct drive to generator  Gravity base foundations  Easily removed if needed

12 http://www.darvill.clara.net/altenerg/tidal.htm

This is an example of tidal stream turbines and this shows you the real benefit of universities and companies working together. This was developed by Swansea University and is called the Swanturbine Project. It has many advantages over several competitors in that it is simple, robust and economic and it does not require a gearing system – it is direct drive. When you look at a single turbine, such as the one shown here, they have very little impact on the environment. Once again, however, we have to get things into perspective. If you are going to equate like for like – and we should not be doing that because we want to see the barrage complementing tidal turbines and so forth – you would need 8,000 tidal turbines to equate to a barrage. If you put 8,000 tidal stream turbines in the Bristol Channel, which is not possible anyway, it would clearly have a knock-on effect on the aquatic environment.

Tidal lagoons or impoundments

Before I talk about the barrage, let me say a little about tidal lagoons because I think there is a misunderstanding on a number of issues with regard to these.

16 Tidal lagoon concept

Tidal Lagoon Concept

Source – University of Colorado

14

The concept of a lagoon is similar to the sketch shown on the right hand side of this slide. You build a wall offshore and you fill the two to high tide. You then hold the water inside the lagoon and let the water level drop outside as the sea level falls from high tide to low tide. Then, at low tide, you open the lagoon and the water all rushes out and then you close the turbines again and allow the sea level outside to rise from low tide to high tide and then, at high tide, you open the lagoons again. Thus, at low tide and high tide, you have a large head and you generate a good deal of electricity.

Location of Swansea lagoon

Location of Swansea Lagoon

Source – Tidal Electric Ltd

15

However, I do not think we always appreciate the size of these lagoons. This slide shows the lagoon proposed off Swansea Bay and it looks quite small on this sketch. The embankment wall of this lagoon is 9km long, which is 12 times the length of the Cardiff Bay barrage. It corresponds to a planned surface area two and a half times the size of Cardiff bay – and I am usually talking in Wales where people know the size of Cardiff Bay. However, if you do not know the size of Cardiff Bay, it corresponds to the size of 1000 football fields so it is a very large structure. The mean tidal range is 8.5m and the energy output is 124 MWh pa and, if we equate like for like, we would need 135 lagoons to give us the same power as the barrage. It is costed at the moment at £240 million but I do not think any contractors have been involved in the costings because the Cardiff Bay barrage, which is 700m long, cost £200 million 10 years ago. This wall will be nine times as long, in deeper water, and

17 it will be the same price. Now, I am an academic and so I know nothing about costs but it does not seem realistic to me.

Impact on currents and sediments

How will the current here be affected by such a massive structure in Swansea Bay, and so on?

Will rapid siltration occur?

Will Rapid Siltation Occur?

Area of Deposition deposition remains

OTI

Incoming Tide Outgoing Tide

Phenomenon of18 tidal pumping

What about siltration? There are many technical issues with which we should be concerned here but me just take one, if I may. When we teach fluid mechanics to students in their final year, we often get onto the topic of tidal pumping. We have a basin, circular in shape – it is an offshore tidal impoundment. We have an incoming tide and we create a circulating flow and the sediment particles which will be brought in, particularly in the Bristol Channel where you have high suspended sediment levels, will be taken to the back by this relatively high momentum jet. On the outgoing tide, the water flows to the sink and we have basically a potential flow and the sediment is left at the back.

This happened indeed in Cardiff Bay when it was built, when they reduced the width of the entrance of the bay from 700m. They took 200m off from the Penarth side to construct the coffer dam to build the locks and so forth, and they had 200m reduced on the dock side to get the concrete and so forth in to build the locks. So the bay width was reduced from 700m to about 200m virtually overnight and, as expected, a great deal of sediment silted up at the back of the bay. Unexpected? It would not have been unexpected if they had done coastal engineering at Cardiff University.

Proposed pilot scheme for OTI

Proposed Pilot Scheme for OTI

Source – Stuart Anderson 19

18 I have just taken one example but there are many others. If we are going to put massive structures offshore, then we have to take account of the hydrodynamic flow characteristics and so on.

This is a proposal of which I am much more supportive. It is a small offshore tidal impoundment – these slides are courtesy of Stuart Anderson who is here today. The idea here is to build a pilot study where we could look at some of these issues, such as sedimentation. Basically, we would have a large laboratory for universities, companies and so forth to look at.

Proximity to key estuaries

Proximity to Key Estuaries

Size for viability 12 km x 5 km Per  27 km

Source – Stuart Anderson

20

There is a proposal off the Rhyl coast to build an offshore tidal impoundment 12km long by 5km wide, which is nearly 50km2, which is bigger than the plan surface area of Cardiff. That wall is 27km long. It does not strike me to be very good to build a wall 27km long, offshore, like that.

Coastally attached impoundments

Coastally Attached Impoundments

Wall length Per  28 km

 Generate power 4 hr out of phase with Severn  Provide coastal flood defences for Towyn etc.

21 Source – Stuart Anderson

However, what is much more impressive is Stuart Anderson’s proposal that we should put a lot of coastally attached impoundments here. That wall is the same length as No. 3 here and the wall length is 28km. Towyn is a town which was badly affected by flooding. A coastally attached impoundment would generate electricity four hours out of phase with the Bristol Channel. I will not pursue this point, but we

19 have to look at energy generation with an holistic approach and not just through the Severn Barrage and so on. We need to look at how we can integrate systems together all around the UK. Here, you can see the coastally attached impoundment, the same length as the previous structure and half of this wall is now in shallower water and therefore cheaper to build. It also attaches to the coast and it has the advantage of giving flood defence to Towyn. Thus, I think the coastally attached impoundments are much more attractive in principle than the offshore tidal impoundments because, in many cases, they give us the benefit of flood defence.

Severn Barrage

Let me turn to the topic that we are here to discuss today, which is the Severn Barrage. As Sue mentioned, a barrage across the Severn was first proposed in 1849.

Severn Barrage proposed site

Severn Barrage Proposal Site Some key facts:  2nd highest spring tidal range  14 m  Cardiff to Weston  Length about 16 km  Generate  5% of U.K. electricity  Total cost  £15 bn  Private funded - by Severn Tidal Power Group (STPG) Slides - courtesy of STPG / David Kerr 24

I shall be talking about the Cardiff Western barrage because that is the one that most people think about when we talk about the Severn Barrage. It has the second highest rise and fall of tide in the world. From Cardiff to Weston, the length is 14km, generating 5% of UK electricity, with costs of about £15 billion. This proposal is the one from the Severn Tidal Power Group.

Barrage layout (1989 report)

Barrage Layout (1989 Report)

Key facts:

 216 turbines each 40 MW  17 TWh/yr  166 sluices  Ship locks  Fish passes included  Public road?

25

20 There would be 216 turbines, each generating 40MW, 17TWh/year, with 166 sluices, ship locks and fish passes and it is debatable whether there would be a road on top.

Construction – prefab concrete

Construction would be in precast concrete caissons, so that it would be rather like Lego and built in deep water ports and transported into the area and then linked together.

Proven technology – La Rance

In terms of the civil engineering aspects, in one sense there is nothing particularly challenging about the project. We are basically talking about a low head dam and we are talking about turbines which have been in place for 35 or nearly 40 years in La Rance. I do not want to get onto the La Rance project, because that is very different from the Severn for a whole host of reasons. However, it would not be the first barrage because engineers have built barrages before and this one, in particular, is widely known. It is very different for a number of reasons, particularly on the environmental side.

Tidal power generation

Tidal Power Generation • Barrage impounds tide, then water is released through a turbine to generate electricity

28

The proposal at the moment is that the power will be generated on the flood ebb tide only, so that the barrage impounds water on the incoming tide. The water is then held for typically three hours and then released on ebb tide to generate electricity.

Proposed operation – ebb generation

Proposed Operation - Ebb Generation

29

21 The current tidal curve in the estuary upstream of the barrage is shown on this slide by the blue line. If the barrage is built and operated in ebb tide generation mode, then the red line shows the tidal curve that would occur upstream of the barrage. Here, you can see the tidal range is reduced from 14m to 7m under spring tide conditions.

Existing estuarine environment

The existing estuarine environment – let us put things into context. The current tidal range in the estuary is 14m on spring tides and 7m on neap tides. There are very high tidal currents in this area and there are very large inter-tidal zones. There are 30 million tonnes of suspended sediments on sprint tides and 4 million tonnes on neap tides, so there are very, very high levels of suspended sediments. There is little sunlight penetration through the water column and there are reduced saturation levels in terms of dissolved oxygen.

If we turn to the ecology, it is a very harsh estuarine regime, particularly with the high currents and the high suspended sediments. There is limited aquatic life on the wetted seabed and the bird numbers are relatively small per square kilometre, compared to most other UK estuaries. That is not to say that these points are not important, however.

Changing natural environment

If we look at the current change in climate first, before we look at the Severn Barrage, the temperature is rising. This will affect the ecology for birds, and so on. The sea level will rise, to give increased flood risk: at the moment, we are expecting I to 2 metres over the next century, with some suggesting up to 5 metres. The water quality is becoming cleaner all the time. We have the EU Water Framework Directive and major investments by the water companies, so that discharges into the estuary are cleaner all the time.

We have the Defra Catchment Farm Management initiative so that we are managing the diffuse source pollution better all the time. Then, when one looks at the legislation, should we look at the project under conditions now, or should we think about 120 years from now, when a barrage may still be in place if it is constructed?

Bird species in SPA citation

Bird Species in SPA Citation

Species numbers Species numbers Citation category between 2000 – 05 between 1988 - 93 (Red - Less, Blue - More)

Internationally important populations of Annex 1 Bewick’s Swan - 289 Bewick’s Swan - 276 species

Shelduck - 2,892 Shelduck - 3,272 Internationally important Dunlin - 41,683 Dunlin - 23,312 populations of migratory Redshank - 2,013 Redshank - 2,566 birds European Goose - 3002 European Goose - 942

Wigeon - 3,977 Wigeon - 8,062 Nationally important bird Pochard - 1,686 Pochard - 880 populations Ringed Plover - 227 Ringed Plover - 665 Curlew - 3,096 Curlew - 2,545 Whimbrel - 246 Whimbrel - 222 Source - RSPB Spotted Redshank - 3 Spotted Redshank - 10

32

22 Let us look first at the RSPB bird figures, and at dunlin, which was cited in that TV cutting. Dunlin have dropped since 1988/1993 from 41,000 to 23,312. So, in terms of the bird population, a great deal is already happening in this estuary.

Estimated habitat changes

Estimated Habitat Changes (Resulting from Climate Change)

Total estuary change Estimated area 20 year 50 year 100 year (compared to 2005) (ha) for 2005 % change % change % change

Intertidal area 22,500 -7 -7 -11

Intertidal mudflat and 20,000 -6 -5 -9 saltflat

Saltmarsh 1,600 -13 -41 -38

Transitional 1,600 +13 +6 +6 grassland

Subtidal 46,000 +3 +3 +5 Source - SDC

33

There is much talk, once again, about the loss of inter-tidal habitat. This will be huge and we all accept that it is of major concern. However, that is also reducing as a result of climate change – albeit, not to the same extent as the bird reductions but it is nevertheless changing.

Main effects of barrage

Main Effects of Barrage

 Spring tide range reduced from 14 m to 7 m Z Significant loss of upstream inter-tidal habitats Z Reduced tidal currents upstream of barrage Z Reduced suspended sediment levels upstream Z Increased light penetration in water column Z Increased dissolved oxygen concentrations Z Increased primary productivity and changed and changed bio-diversity of benthic fauna

 Upstream tidal range of 7m is comparable to other UK estuaries, e.g. Thames & Humber

34

What would be the main effects of a barrage? On the spring tide, as you saw from the picture, the tidal range would be reduced from 14m to 7m. Without doubt, if we operate in that mode, there would be a significant loss of the upstream inter-tidal habitats and nobody disputes that.

There would be reduced tidal currents – the tidal range is much less. There would be reduced suspended sediment levels and there would be increased light penetration because there would be less sediment in the water column. There would be increased dissolved oxygen in the water column. There would be increased primary productivity and a changed biodiversity on the bed of the estuary.

23 We must not forget that the Severn Barrage is often compared to the Cardiff Bay project, but the latter is quite different. We have impounded two rivers and we have no change in the water levels upstream of the barrage. We will still have, if the barrage is built here, as proposed, a tidal range of 7m, which is bigger than that of the Thames or the Humber. So this will not be a stagnant pond of water.

Two-way generation?

If we really have so many major problems on the environmental side, as engineers we can still address these by looking at the possibility of two-way generation and not just locking ourselves into ebb tide generation.

Proposed: one-way generation

Proposed: One Way Generation

Option 1: Generate over ebb tide only

Level of water inside impoundment

36

The current proposal is to operate the barrage in the mode shown on this slide, where the blue line is the wave outside of the barrage or the seaward side, and the yellow line indicates the shape of the curve in a simplistic manner, upstream of the barrage. That is the one-way ebb generation.

Alternative: two-way generation

Alternative: Two Way Generation

Option 2: Generate and pump over full tide

Level of water inside impoundment

37

If we go to two-way generation and we pump where you can see the red circles on this slide, under low head at high tide and at low tide, then we can move the wave by 90 degrees out of phase.

24 Analysis for tidal impoundment

Analysis for Tidal Impoundment  Calculations by Prof Jim Poole, EA Wales  Maximum energy converted per tidal cycle (J/m2), excluding losses, gives:- Energy Mode of generation generated

Option 1 (Ebb tide only) 2,930 T2 Option 2 (Flood and ebb 6,930 T2 with pumping) (T = Tidal Range)

 However, filling barrage impoundment with plan area about  500 km2 more complex than filling a lagoon

38

We keep the tidal range, and these are calculations done by my friend who should be here today, James Poole from the Environment Agency – and nobody ever questions anything from the Environment Agency. You can see here that James’s figures show that in fact we can produce a great deal more energy as well if we have two-way generation. I should say that those calculations were done for the lagoon, which is clearly much smaller and they obviously need to be refined quite considerably for the barrage. Nevertheless, those calculations would indicate that perhaps we can generate as much electricity with two-way generation and also address some of the environmental problems. In fact, the only problem we are left with then is that of fish migration. However, as shown on this slide, filling a large impoundment of 500 km2 is more complex than filling a lagoon.

Alternative operating regimes

Perhaps two-way operation is something we should look at in greater detail. It would reduce many of the environmental concerns. Two-way ebb and flood generation would have several advantages. It would generate electricity over a longer period of the tide and it would maintain the near existing tidal regime. It would generate limited significant changes to the inter-tidal habitats and sluice gates may not even be needed, which would allow us to put more barrages into the structure. Fish migration, however, still remains a problem.

Model studies

We have been doing research funded by the Welsh Assembly government and I would now like to show you some of the results from our computer model simulations.

25 Severn Estuary hydraulic model

Severn Estuary Hydraulic Model

41

We have recently had a small physical model built. It is too small to make engineering decisions on the barrage but it is ideal for our research students and undergraduate students to work on issues relating to the Severn Estuary. It is a 1:25,000 physical model, in our hydraulics laboratory, and it was opened last week by the Jane Davidson, Minister for the Environment for Wales.

Model grid configuration

Model Grid Configuration

Cardiff

Inner Barrage

42

This is our computer model, set up for the Severn Estuary. It goes from the outer estuary right up almost to Gloucester. This is a finite volume, two-dimensional model, for those who are interested, but I will not dwell on the modelling.

Validation of field data

Validation of Tidal Elevations

7 7 6 (a) Avonmouth 6 (b) Newport 5 Observed 5 Observed 4 Cal. 4 Cal. 3 3 2 2 1 1 0 0 -1 -1 W ater Lev el(m ) -2 Water Level(m) -2 -3 -3 -4 -4 -5 -5 -6 -6 48 72 96 120 144 168 192 216 240 48 72 96 120 144 168 192 216 240 Time(h) Time(h) 7 7 6 (C) Mumbles 6 (d) Hinkley Point 5 Observed 5 Observed 4 Cal. 4 Cal. 3 3 2 2 1 1 0 0 -1 -1 Water Level(m) Level(m) Water Water Level(m) Level(m) Water -2 -2 -3 -3 -4 -4 -5 -5 -6 -6 48 72 96 120 144 168 192 216 240 48 72 96 120 144 168 192 216 240 Time(h) Time(h)

43

26 You can see here that the model produces perfect comparisons with the field data and virtually perfect comparisons with the velocity field. This is exactly what a consulting engineering company would want.

Validation of tidal current speeds

Validation of Tidal Current Speeds

2.4 2.4 Site F (51°21.5' N, 4°19.4' W) Site M (51°20.1' N, 3°50.3' W) 2.0 2.0 Cal. Cal. 1.6 Obs. 1.6 Obs.

1.2 1.2

Speed (m/s) 0.8 0.8 Speed (m/s)

0.4 0.4

0.0 0.0 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 Time referred to HW at Avonmouth(h) Time referred to HW at Avonmouth(h)

2.4 2.4 Site R (51°14.2' N, 3°21.1' W) Site V (51°19.6' N, 3°04.8' W) 2.0 2.0 Cal. Cal. Obs. Obs. 1.6 1.6

1.2 1.2 Speed (m/s) Speed (m/s) 0.8 0.8

0.4 0.4

0.0 0.0 -6-5-4-3-2-10123456 -6-5-4-3-2-10123456 Time referred to HW at Avonmouth(h) Time referred to HW at Avonmouth(h)

44

This is the last thing on earth that an academic like me would want because how can I persuade anybody to fund research at Cardiff University when the model is producing good results? The very thing I want is actually poor agreement between the model and the results, so that I can say, ‘Can you fund some more research?’

Turning to the more serious issues, you can see here that the model is predicting currents quite well.

Grid resolution

We have a fine grid resolution around the proposed barrage site.

Velocity field around barrage

(a) Velocity Field Around Barrage

Flood

2m/s water level(m)

2 2.5 3 3.5 4

Ebb

2m/s water level(m)

-4 -3 -2 -1 0 1 2 3

46

This slide shows computer model predictions of the flood tide through the sluice gates in the top picture. In the bottom picture, you can see the tidal current from the ebb tide through the turbines. The colours there represent particular magnitudes.

27 Tidal evaluations

I would like to show you some comparisons of computer model predictions. The one on the left in each case shows you the situation without the barrage, while on the one on the right is with the barrage.

Tidal elevations

Tidal Elevations

Lower high water levels

Without Barrage With Barrage High Water - Spring Tide

47

This one shows you the tidal elevations at high tide. High tide refers to the site at Barry, although it does not really matter where Barry is – it is just west of Cardiff. It does not really matter, because they are all to the same high tide level in these plots. You can see here that the levels upstream of the barrage are reduced at high tide at Barry, and we have lower water levels both downstream and upstream of the barrage.

Maximum tidal currents

Maximum Tidal Currents

Barrage reduces scope for tidal stream turbines

Without Barrage With Barrage

48

If we look at the maximum tidal currents, without the barrage on the left and with the barrage on the right [on slide], you can see that the currents are reduced considerably. There is no doubt that there is an important point here. If we build the barrage we will reduce the currents in that area shaded in red, and that is one of the very few attractive sites because the Bristol Channel is not suitable for tidal stream turbines, for a number of reasons. However, I will not go down that route because we are here to discuss the barrage today. So that is one of the most attractive sites for tidal stream turbines.

28 There is no doubt that, if we were to go ahead with the barrage, that site is no longer attractive for tidal stream turbines because the currents would be too low.

High suspended sediment levels

High Suspended Sediment Levels

Dynamic region of high turbidity

49

This is the problem in the Bristol Channel. If you go over the Severn Bridge, the water always seems dirty and muddy. This region is an area of very high currents. It is very dynamic and it has very high turbidity levels and very high levels of suspended sediment in the water column. It looks dirty.

Suspended sediment levels

Suspended Sediment Levels

Mean Flood

Reduced sediment levels Z clearer water

Without Barrage With Barrage Mean Flood - Spring Tide

50

If you look at the suspended sediment levels on the left, this is a computer model prediction and you can see very high levels here. The green shows you 800mg/l, which is very high. You have to go to some of the biggest rivers in China to get figures that are very much higher than that. These are very high, by international standards, and that is why the water is brown. This is not mud coming down the river but it is mud kept in suspension by the very dynamic currents.

On the right, if the barrage is built, you can see that the suspended sediment levels drop off dramatically and that whole region would be much clearer.

29 Sediment bacteria transport

Sediment Bacteria Transport

water column

Wastewater outfalls Catchment runoff Enteric Water birds bacteria Transported and diffused by current

Sediment re-suspension

input output Overall reduction

Decay Deposition

51

Then the sediment interacts with the bacteria, so we have bacteria coming down the river. One might wonder what is the importance of sediment: sediment is much more important than just dredging and navigational problems because it also affects water quality. We have bacteria in the water column and this comes from waste water outfalls, catchment run-off – diffuse source pollution, basically. The sheep leave it on the land, you and I manage ours well. The sheep produce ten times as much fecal coliform waste as you and I every day and it is left on the fields for weeks and then, when a big storm comes, it is carried down into the river and then we have massive fecal coliform loads in our rivers. This ends up in the estuary, and so on.

That input is then transported through the water column and diffused by the currents. There is an overall reduction in the bacteria levels in the water column by the natural process of decay and deposition of the bacteria on the beds. So the bacteria comes down the river and latches on to sediments by chemical absorption and then it goes onto the bed with the sediments. We then have a big storm and the sediments go back up into re-suspension – this is what happens in the estuary – and we then have fairly high levels of bacteria once again.

Riverine and WwTW Sources

Riverine and WwTW Sources

Rivers

WwTWs

52

We have done a comprehensive study here with the University of Wales at Aberystwyth. We have put all these sources from the rivers and the waste water treatment works into our model.

30 Bacteria levels

Bacteria Levels

Mean Ebb

Reduction in bacteria levels

Without Barrage With Barrage Mean Ebb - Rivers in Flood

53

Here, you can see how the bacteria levels would change and drop, if we were to build the barrage. The sediment transport is dropped and, if the sediment transport level in the water column is dropped then the bacteria levels will drop.

Areas at risk from flooding

Areas at Risk from Flooding

 Barrage could be operated to reduce flood risk upstream

 Flood risk seawards Gloucester likely to be slightly less due to reduced estuary length Cardiff Bristol  Flood risk due to surges will be less upstream

54

Many areas in the Severn Estuary are currently at risk from flooding and a great deal of money is spent on flood defence in the area. The barrage could be operated to reduce flood risk anyway. The flood risk seawards is likely to be slightly less, due to reduced estuary length. If you go back to basic estuarine resonance, we would expect it to be reduced slightly. The flood risk due to surges would be less anyway, because the structure would stop the surges going further upstream.

Maximum water levels

Maximum Water Levels

Reduced flood risk

Without Barrage With Barrage Spring Tide

55

31 If we look at the maximum water levels, the picture I showed you before of the tidal water levels was the high tide level predicted at Barry and then the corresponding water level everywhere. In this plot, I am now showing you the very maximum water level predicted at any point for an extreme spring tide. Here you can see that, in the whole of this reach, the water level is reduced. It is reduced by typically 1m upstream of the barrage, which is consistent with the computer model predictions back in the early 1980 studies. Not only is it reduced upstream of the barrage but it is also reduced slightly, typically 10cm – 15cm, downstream of the barrage. So, contrary to what the expert at the end of the Inside Out programme told you, there is no evidence on the basis of our computer modelling that the area would flood at all as a result of the barrage. In fact, the barrage would provide some reduced flood risk management, both upstream and downstream – so I do not agree with the person who spoke at the end of the BBC programme that I showed you.

Alternative Shoots Barrage

Alternative Shoots Barrage Some Key facts:

 Energy yield 

Severn Bridge 2.75 TWh/yr  Construction  Second Severn period 4 yr Crossing M4  Length  4 km

 Less plan area

 Slightly higher Shoots Barrage tidal ranges

56

I will not spend any time on this project but there are a number of other proposals. There is the alternative Shoots Barrage, about which many of you might have heard. This is much shorter and it follows the route of the second Severn crossing. It could be built in four years and its length would be only 4km, vis à vis the 16km for the Cardiff-Weston barrage. The tidal range is slightly higher here. For those of you who are interested in this, there is a good deal that can be picked up from the web but I thought it better to concentrate on the Cardiff-Weston barrage in this presentation. Many of the points I have raised about that are generic and would equally apply to the Shoots barrage.

Concluding remarks

Concluding Remarks  Tidal stream turbines attractive - limited EI  OTIs require detailed EIA and cost studies  CAIs offer opportunities for flood defence  Severn Barrage would provide substantial supply of tidal renewable energy:- Z Will be detrimental to several aspects of existing environment Z but also some positive benefits Z Two-way Barrage operation and phased upstream tide would address many environmental issues Z Barrage should complement other schemes

57

32 Tidal stream turbines are attractive and they have limited environmental impact. Offshore tidal impoundments, in my view, will require detailed environmental impact assessment and, in particular, detailed and serious costs studies. However, coastally attached impoundments in my view offer us much greater value for money and they offer much better opportunities for the future – particularly with regard to being used in terms of flood defence.

The Severn Barrage would provide a substantial supply of tidal renewable energy. It will be detrimental to several aspects of the existing environment and there is no question about that. However, as you have seen from some of the computer simulations that I have shown, there will be a great some positive benefits as well. There would be the benefit of reduced flood risk, based on our computer model predictions.

In my view, two-way barrage operation is something that we should look at, and phasing the tide upstream. If we phased the tide upstream, we would be able to generate electricity over a longer period of the tide and we would reduce some of the environmental concerns that have already been raised. Finally, we should not see the barrage as ‘the barrage or nothing’, but we should see it in complementarity of a whole range of projects – tidal stream turbines, closely attached impoundments off the North Wales coast and so on – so that they all complement one another rather than competing.

The challenge

There is a considerable challenge for engineers to deliver the UK’s renewable energy within a sustainable environment. The opportunity is there for the UK to lead the world in renewable energy provision and to consider the environmental impact issues.

Addendum

We need to have a vision to address climate change, and we can turn to the Bible for the answer to that. Thank you.

Addendum

“Where there is no vision, the people shall perish”

Proverbs 29:18

60 ***

Sue Ion: Thank you very much indeed, Roger, for that absolute tour de force. There will be the opportunity to address questions to Roger and the other speakers during the discussion later in the afternoon.

Our next speaker is Doug Parr, Chief Scientist and Director of Policy at Greenpeace UK where he looks after the science and political lobbying functions. He has been with Greenpeace for over 14 years and has worked on a number of technical and policy issues. He is well known in the energy sector for his commentary. Doug will talk to us about a good low carbon generating option.

33 34 SEVERN BARRAGE – A GOOD LOW CARBON GENERATION OPTION?

Dr Doug Parr: Thank you very much, Sue. I am afraid I have no pretty pictures – where Roger had 61 slides, I have three, and this is one of them.

As Sue said, I have been at Greenpeace rather longer than is probably good for my long-term sustainable health but I have been involved in a variety of issues concerned particularly with energy and increasingly on climate change, because of the incredible potential threat and indeed actual threat that climate change now poses. That will be the substance of my talk because the barrage throws up some conundrums which I will explore with you today.

Just so that you know right upfront, do we have a position for or against the barrage? No. It is probably too early to say, because there are some quite knotty conundrums which we should not ignore. This is thus not a black and white issue. The first thing I should say is that we are of course big supporters of renewable energy technologies and that includes tidal range technologies, of which the barrage is potentially one. We certainly have no in-principle opposition to this and we could even support it, and I hope to explore the whys and wherefores with you.

Considerations

Considerations

• Climate Change • Energy Policy context • Renewable Energy • Long-term future of energy system • Location & environmental impacts – the international dimension • Support mechanisms?

Here is a motley bunch of considerations that we bring to the issue of the barrage. I would like to start by looking at the big picture because it is when you come from the big picture down to this particular project that those conundrums become real.

Climate change

We start, of course, with climate change, which has already been discussed. We believe that it is the biggest environmental threat, as I suspect most of you would agree, and that it threatens human civilisation in the not-too-distant future. Because of the variety of challenges that it will pose if we go above roughly 2 – 2.5ºC, then we might find the melting of the Greenland ice sheet, which would involve a whole series of changes – including the fact that we could not be in this room for much longer. Over what timescale that would take place, however, is a very open question. Are we talking millennia, or centuries or decades? Nobody really knows. However, that is just one example of the many potential changes that climate change could bring about and we tend to talk about these impacts simply as though they are in the physical world.

35 Of course, if there are changes in the physical world then there are potentially dramatic changes in the social, political and economic world if we create huge numbers of migrants. If there are migrants in Bangladesh, where nearby there are nuclear powers and we know about the political instability that migration causes. That is an apocalyptic scenario but it exposes the sort of uncertainty associated with the impacts of climate change and what that might mean. I am not using that to scare but just to show that we do not really understand the full consequences. Therefore, tackling climate change has to be an absolutely essential part of what we, as a developed nation – particularly one where the industrial revolution took place – have to do.

This means that we potentially need to make some sacrifices to make it happen. At one level, does this mean that everything that we can do to stop climate change must be done? That is not quite so straightforward though, is it, because that would mean you would all be walking home, and that is not going to happen – it is not sustainable. So how do we choose what things we do in order to tackle climate change? The barrage is something that throws those challenges into particularly sharp context.

Malcolm referred to the emissions cuts that will be legally mandated in the Climate Change Bill and it is no secret that there is a significant chance that they will be increased. The other point to bear in mind is the considerable challenges that the world and indeed the UK face in controlling diffuse sources of non-carbon dioxide gases, which means that our energy system – if we follow something like 80% cuts in carbon dioxide – will have to be pretty close to zero carbon by 2050. Therefore, many options for low carbon generation need to be given careful consideration.

Energy policy context

We believe that the context for this is that we should be heading for a different kind of energy system and a different kind of vision. We recognise that there are contexts other than simply climate change, including energy security and how much of our GDP we can put towards solving the climate issue. It is fair to say that I would disagree with Malcolm on perhaps how much there should be but not that there should be a limit and that you cannot dedicate everything towards solving climate change at this point in time.

There is no question in my mind that, technologically – and you are all engineers and you know this – there are all sorts of options we could have which would deliver us a much lower carbon society. The reason that principally stands between ‘us’ and ‘them’ is that of cost. We are perfectly capable of producing and storing hydrogen on the back of intermittent renewable generation and so if we just get enough of it, then we can run our entire economies from that. Will that happen tomorrow? No, of course not, because there are issues of costs and of practicality that will get in the way.

How should we decide what to prioritise? This all seems rather ethereal but you can realise that this kind of thing applies in spades when you come to talk about specific projects like the barrage.

Renewable energy

We are big supporters of renewable energy and there are now renewable energy targets. There is a 20% renewable energy target across the EU, which will translate into something around a 15% target for renewable energy for the UK. We will have to up our game considerably in order to meet that from our current level of something

36 slightly under 2% of renewable energy, so that means very large growth there. This means that we will have to explore many options in order to get there. Sometimes, for perfectly understandable reasons, the idea that the UK would need to produce 15% of its energy from renewable sources leads to rather a sharp intake of breath and people think it will be hard. Well, yes, it will be hard but, when I say that that is 15% of renewable energy – leaving nuclear aside for a moment, 15% of our energy will be renewable and so we will have to do something like quadruple that by 2050 in order to come anywhere close to meeting these emissions reductions targets we need to achieve.

Fifteen per cent for the UK is a big challenge but is it anywhere near enough? No, it is the first stage. That is why options like the barrage cannot a priori be ruled out, simply because they have environmental impacts – which it will, and quite significant ones. As a starting point, however, we cannot rule that out. There are reasons why it may not be the best option and I will come to those but, a priori, I would not rule out the use of tidal range in the Severn and particularly with the barrage, simply on the grounds that there are environmental impacts. Frankly, all energy sources have environmental impacts. Wind farms kill birds but does that mean that we do not support them? No, because we think they are needed, but one has to be mindful of the balance between the over-riding need to deliver emissions reductions and the size and scale of environmental impact that we are dealing with.

Long-term future of energy system

We have a long-term view about where our energy system should be going. One of the critical factors as always is that, whenever you start to contextualise any particular project or piece of work on energy, you always come back to energy efficiency extremely rapidly because we cannot just keep producing more and more energy to get to where we want to be. We are obviously big supporters of energy efficiency and we could spend ages talking about that. We are also big supporters of decentralised energy, where if we are using fossil fuels or even some of the renewable fuels like biomass, we need to capture all the heat.

We need to use every bit of renewable energy we can possibly get – we need to use every bit of energy that we can get from fossil fuels if we are to come anywhere close to the kinds of emissions reductions that we need to make. Renewable energy, including big scale renewable energy, will have to be part of this bigger energy system, not just about power but also about heat. We need to integrate those two systems together. I am talking here a good deal about electricity, because that is obviously where the Severn Barrage sits in all of this.

Location and environmental impacts – the international dimension

Let me turn to some other observations. There are mixes of issues about where this potential barrage might be and what the environmental impacts could be.

What are the biodiversity impacts of the barrage? At this point, I have to take a short break and explain some of the nuances of ecological politics. Greenpeace is not an expert on UK biodiversity – and I certainly am not. If you want to hear a detailed description of the Severn’s biodiversity, the potential impacts and the reasons for that, you are looking at the wrong person. There may well be someone who can give us that information in the auditorium today, but it is not me. I therefore have to give an assessment of this environmental impact in the broad brushstrokes that ignorance allows.

37 In terms of important international habitats, whilst Latin America does broad, aesthetically pleasing rainforests, in Britain we do mud. Some of the most important habitats of international significance that we have in the UK are the mudflats. This is not surprising in some ways because we are a coastal island with waves coming in and out. We have plenty of coastline and we are a temperate western margin island. For some species, we are a terribly important place because of these mudflats. The Severn, because of its large tidal range, has a lot of mud.

It is certainly true that the wading birds on the Severn have led to the designations of international importance on the Severn. Those birds, probably because climate change is in fact already starting to impact, are not coming all the way over here from their breeding grounds in Russia – they are staying on the east coast, because it is warmer over there now and they do not have to come all the way. That is great – if you do not have to fly across Britain, why would you?

Equally, the argument explored in the Sustainable Development Commission report, which many of you may know, is that because it is a habitat of significance with the very large tidal range that is involved, the physical foundations of that ecosystem will remain unusual and therefore important in the future. Those things should not be cast away on the basis of potentially short-term changes in response to climate change, because the physical foundations of that ecosystem will remain. It is true that it might not be as biodiverse as some other parts of the UK but, by analogy, would we argue that, because the Arctic tundra and boreal forest is not very biodiverse, then they are of no significance and it is good that they are warming up and will become more biodiverse? I do not think we would.

In broad brushstrokes, changing an important international habitat of that kind is not necessarily a good thing. Those are value judgments, about the value of ecosystems in their current form, compared to the changes that might take place. We should be explicit that those are value judgments. We can do a great deal of clever science that might elucidate precisely what the biodiversity changes are and whether we have more or fewer fish, or more or fewer birds, but I am not sure that that gets to the route of it. In some ways, it is a question of whether we value those ecosystems in their current state.

Because those ecosystems are potentially of international significance, it is not somewhere you would want to change unless you had to. Whether we absolutely have to do that is an extremely interesting question, the answer to which I do not think we fully know. However, that is not really the place you would want to start if you were trying to drive your energy system towards very dramatic increases in renewable energy. Equally, as far as I am concerned, it is not something that you would ever want finally to rule out.

Another point that I would raise here is that, in various shapes or forms – and there is a process through the International Climate Change Talks taking place here – we are essentially trying to tell a lot of developing countries not to trash their rainforests and important ecological habitats in order to further their economic growth. That, in a way, is what we would be doing to our own – we would be trashing our own important ecological habitats, at least if you take the value judgments to which I referred earlier. Is this something we can and should do? Discuss.

Further, my colleagues who follow the Framework Convention on Climate Change more closely assure me that the UK influence on those talks needs to be backed up by domestic action. ‘Do as I say, not do as I do’, is the sense that you sometimes get from other countries about where the UK is coming from. Behaving and doing things

38 in the right way is quite important for our credibility and influence over those international negotiations.

Support mechanism?

We then come on to the question of costs. As a scientist, this takes me well outside my comfort zone, but let me explore this. A barrage, at the cost of £15 billion: the SDC report makes it pretty clear – and I know that this is something that Sarah and her team are exploring in depth in BERR – what should there be, and if so in what form should any public support be for this project, a barrage type project or a tidal range project?

From the point of view of an environmental group like Greenpeace, do we have any problem with public sector support for renewable energy? No, actually: in the right place at the right time, it is a good idea and in fact we need more of it. Is this the best place to put our public support? As I have said, there are many ways in which we can go to a lower carbon society and most of the reason why we do not do so is cost. If you accept that economics and cost are the determining factor in how you decide which renewable energy options you should explore, then sooner or later you have to come back to the cost.

It is not obvious to me that the barrage is the best place to put public support, at least not at this point. Again, I come back to the point that we are not saying no to this, but we are asking whether this is the best place to begin. If we wanted public support, let me throw out an idea. We know that Britain is in a prime position to explore or rather to develop an offshore wind industry which, if properly nurtured, could become not only a huge export industry but could deliver real technologies that could help the UK and many other countries to deliver a low carbon society. There are considerable advantages in supporting an industry that might have international significance, compared to what is essentially a one-off project.

If you wanted to spend £15 billion, how much offshore wind could you get? From talking to the British Wind Energy Association, they are talking about 6 – 7GW which is not the same but of a similar order of magnitude to what we would get out of a barrage, but you would not just get a one-off because you would then get an industry with a potential for export, as I alluded to earlier, and a potential for much greater savings further down the line as we have to reach these very ambitious targets globally.

Why would you choose to support a barrage and not offshore wind? More to the point, why would you not want to do things that would generally support where you could use public money to leverage private money in a very big way to support offshore wind? Let me give you an example. We want to develop offshore wind farms in many locations down the East Coast. Under the current case-by-case approach, we have very expensive wires leading from these offshore wind farms into land, and they have to have landing points, with connection charges, cabling and substations –which are all a very expensive part of that. Subsea cable laying in particular is a very expensive part of the development of an offshore wind farm.

If, instead of having these single cables running in to land, you had a very big cable which ran down and met a lot of them, then you would save on cabling costs at a system level and you would actually provide an extra capacity running North/South. In the challenges facing the further development of renewable energy, this North/South interconnector – all the renewable energy is up there and all the demand

39 is down here in the South-East. So, you solve a system problem and you reduce the costs.

That kind of strategic public sector involvement is something which probably comes out at much lower than £15 billion and you would leverage a great deal of renewable energy. There are thus other options out there for public involvement in renewable energy and the renewable energy system which, at first sight, appear to be rather better options than heavy involvement in a barrage. That is what I mean when I ask whether this is the right place to start. This is not something we would want to rule out but, for reasons of whether it is the right to start, and looking at all these environmental impacts, is it really the best option?

The challenge here for an organisation like Greenpeace is that it is not black and white. It is easy to deal with black and white and we do that quite frequently – we like to do that, making it clear and simple.

Conclusions

Whilst we certainly need ambitious renewable energy, efficiency and decentralisation targets to put us on track for long-term 2050 goals, what is the best way of doing that? There are clearly a number of options.

Roger talked about tidal stream. I have not even touched on wave which, again, is a technology which we are almost in a unique position to develop in the UK. This could be an export industry and, importantly, given that we are at whatever it is – 2% of emissions - it is a technology that could be developed here, that would be of value in other places of the world, to help them to deliver a low carbon society. There are thus a number of options and some of the considerations that should be brought to bear are quite long-term. That is quite distinct from a barrage where, as I said, you build a barrage and you get a barrage – but you do not have an industry which has that export and potential for global significance.

It is certainly an option but I have questions about whether, for reasons of environmental impact and cost, it is the best option. It is not something that we would want to rule out but, equally at this point, it is not something that we would rule in. I am sorry that I cannot give you a simple yes or no, if that is what you were expecting, but I hope you appreciate that, from the global right down to the Severn Estuary, there are some knotty issues about how we take forward renewable energy and deliver a low carbon society. The difficulties that it exposes for us are actually brought to a head by a proposition like the Severn Barrage.

Thank you.

***

Sue Ion: Thank you very much for that, Doug. Doug emphasised, as did Roger, the importance of looking at things in a holistic sense, in a system sense, as we balance out all the options that might be available to us in the UK. Although Greenpeace is neither for nor against, they raise a number of issues that have to be taken into account as we make choices.

Our next speaker is Bob Taylor from E.ON. Bob will talk to us about the electricity industry’s views on a tidal barrage like the Severn, and what their response to it might be. Bob is well known to many people in the audience. He is a board member

40 of E-ON UK, a position he has held since 2001. He is currently Managing Director of their Generation Division, so he probably supplies many of you with your electricity.

Bob has had responsibility for generation and energy-related R&D for some time, and the long-term development of clean coal and nuclear generation options for E.ON in the UK, so he carries quite a diverse portfolio in his mix. He is a chartered engineer and a fellow of the IET and he is a Member of Council of the University of Birmingham, amongst his other duties. Bob will talk to us about what the electricity sector thinks.

41 42 THE ELECTRICITY INDUSTRY’S RESPONSE TO A SEVERN BARRAGE

Mr Bob Taylor: Good afternoon, everybody. I am absolutely delighted to be here. What an interesting topic – and the presentations that we have for you are building on the various messages as we go through this. I would like to share with you some perspectives, from an investor’s point of view, and as a major energy company that is involved in a diverse range of technologies. Of course, we are both famous and infamous, depending on your view, for our interests in nuclear, our interests in fossil and of course a very large renewables business. We are involved in many of the offshore farms that were mentioned in some of the earlier presentations. Most recently, we have been in the news with regard to the London Array project and some of the difficulties that it faces.

First, I will share an overview of the challenge which we perceive that the UK is facing, because you really have to look at this holistically. I will then look at the potential role of the Severn Barrage within that context. We really have a challenging time ahead of us.

The electricity industry faces significant challenges

The Electricity Industry faces significant challenges

 By 2020 a significant amount of the  Capacity gap up to UK’s existing coal and nuclear 25GW by 2020

capacity will be closed  Th i s eq u at es t o over 30% of current capacit y  A sustained investment in new capacity is required to close the supply demand gap Source: E.ON UK EU Green Package Targets for UK  New capacity will have to built in an economic environment that is 20 % less carbon 15% of Energy in 20% efficiency improvement emissions the UK from in final energy demand focused on fulfilling energy policy compared to 1990 Renewables against BAU (EU wide and levels non-binding) goals of diversity, affordability, carbon emissions reduction and renewable energy targets Across heat, transport and electricity Page 2

You are probably aware that, over the next two decades, we face what is probably the most challenging period for the energy system in the UK that we have faced for a great many years. Some of you in this room may even remember back to the 50s, 60s and 70s, when the UK was building a 10% increase on its capacity every year, effectively doubling the UK capacity every 10 years. Here we are now in the UK at the moment, and let us just remind ourselves where we are starting from. We have about 75GW of plant on the system in the UK and you can see from the diagram on this slide the kind of mix that we have, with renewables as part of that ‘other’ in the mix.

It is fairly well known that, over the next 12 years, up to 2020, with the retirement of our old coal plant in the UK and the nuclear capacity in the UK and a large amount of that closing out, we need to replace of the order of 30% of our UK capacity. I think that is fairly well known. What we probably do not consider too often is, what about the decade after that, because that does not stop? In the decade after 2020, we will be retiring the rest of the nuclear plants we have. We will have just Sizewell B on the bars and of course we move to a position where, of the current capacity that we have on the system, we need to replace of the order of 60% - some 48GW. Depending on how you want to look at this, it is a major challenge or a major opportunity, as some of the earlier presenters mentioned. This is a major, major challenge, which we

43 should not under-estimate. In particular, there is the next decade, as we run towards 2015/16.

We have ahead of us a sustained need to transform our energy system and, to do that, we face choices and trade-offs. There are many people who do not like choices and trade-offs but leadership is all about making choices and trade-offs. We have some energy policy objectives around carbon emissions reduction, around security and around affordability, and that will require us to make some choices over the next decade. In particular this year, over the next 12 months, with the consultation on the Green Package and the decisions that we have to make about generation choices, we face a very interesting and important time. It is a time when we need to be transparent about the issues and transparent about the costs and about the choices that we have to make in the UK about some of these technologies.

The Green Package for the EU is another part of the challenge. We have this 30% of capacity to replace by 2020 and, at the same time, when you actually look at the Green Package and the 15% of total energy to be taken from renewable sources, then when you translate that to the electricity part of the sector, as opposed to heat and transport, we are looking at a challenge there of delivering some 40% of the electricity generation from renewables.

If that was not difficult enough, at the same time we have a dependence on imported gas moving from where we are at the moment – 20% or 30% - to 2020 when we will be dependent on imports for about 80% of our gas requirements. It is rather like a Rubik’s cube: how do you make all of these choices, and how do you make all of these trade-offs? As I have said, some people do not like debating those trade-offs but they prefer to stay in their energy silo: ‘Let’s talk about carbon emissions – that’s all I want to talk about. Let’s just debate that.’ They prefer to stay in their technology silos and say they just want to talk about nuclear or about renewables. The reality, however, is that there are trade-offs to be made, and that is what leadership is about. We are entering a very important period where we need to show some leadership.

A Severn Barrage would be a unique asset

A Severn Barrage would be a unique asset

If build it would be the largest single generation asset in the Size UK

Carbon Take a role in reducing carbon dioxide emissions from electricity generation helping meet national and international Benefits targets

A capital intensive project and one of the most costly Cost renewable technologies

Operating The operation of the Barrage brings a distinct generation Regime shape to the market

Page 3

Let me come now to the Severn Barrage and what that means in the context of our energy challenges. I shall talk about these four areas [on slide] rather quickly and I shall perhaps spend a little more time on the last one because that is probably where my section of the presentations can contribute. I shall be talking about size; about carbon benefits; about cost, and about the operating regime and what something like

44 the Severn Barrage may mean when it is to be integrated into the energy system of the UK.

Its size would make it the largest generation asset in the UK

Its size would make it the largest generation asset in the UK

 If the Cardiff-Weston Barrage was built it would have an Largest Generators in the UK installed capacity of 8.6 GW 10 8 6  It would be double the size of 4 the current largest plant 2 Plant Size(GW) (Drax) on the UK system 0 Sever n Drax (Coal) Teesside To r n e ss Dinorwig  Barrage (Gas) (Nuclear) (Pump The size of the project means Storage) that no single generator could develop and then operate it

What would a consortium look like to develop and operate?

Page 4

Well, it’s big, and I think that message has been conveyed already in the presentations. Its size would make it the largest generation asset in the UK, at a size of about 8.6GW. You can see on this slide how it compares to any other single generation asset in the UK. The largest coal asset in the UK, Drax power station, is just under 4GW; Teesside, at the moment, is the largest gas-fired power stated, and so on. This is a very, very sizeable asset.

Just to put it into context of E.ON UK’s generation portfolio, we have about 11GW of plant on the system at the moment, ranging from renewables, CHP, right through to our major coal and gas assets on the system. Thus, it would be 8.6GW against our current portfolio of some 11GW. By the way, we are closing 40% of that over the next five to seven years, just to come back to my earlier point, if there wasn’t a challenge there for it. The size of the Severn Barrage would really mean, for a number of reasons, that it would take a consortium of interested parties to invest, develop and operate the investment of that scale.

The Severn Barrage would contribute ~1% of renewable energy to the UK’s final energy demand

The Severn Barrage would contribute ~1% of renewable energy to the UK’s final energy demand

An 8.6 GW Severn Barrage would generate 1% of UK final energy demand which is equivalent to

4.75 GW of Offshore Wind Turbines

1 million Ground Source Heat Pumps

1.7 million Solid Wall installations

3.3 million Electric Vehicles

7.9 million Solar PV installations

Source: E.ON UK Based on 2006, UK Final Energy Demand (FED) = 1,663 Page 5 TWh

45 It would make a contribution to carbon emissions and I think that point has already been made – I think it is something like 17TWh, a capacity factor of 20% or so. It would contribute to approximately 1% of the renewable energy requirements of the UK – so that is transport, heat and electricity. It would contribute about 4% if you looked at it in terms of the UK electricity energy needs. It is broadly equivalent to some of these other choices that you can see here, taking account of the various capacity factors and the contributions of energy that each of these choices would make. From a carbon emissions point of view, therefore, we can see it making a material contribution.

Barrage costs would require a unique approach

Barrage costs would require a unique approach

 At commercial discount rates the estimated costs of a Cardiff- Weston barrage would be significantly higher per KWh than current technologies

 Some level of HMG involvement will be required due to the projects economics (e.g. RO extension, other support mechanism’s,

financing etc) Source: Sustainable Development Commission

Does this project deliver the policy goal of affordability?

Page 6

What about costs? This information is taken from the SDC report and, in this diagram, you can see a range of long-run generation costs from the various technologies. I have deliberately taken this from SDC: every time I put up a different picture of generation costs, people want to talk about the basis of them. Broadly, I have to say that I agree with the figures that are given here and of course you then get into the issue of financing and the cost of capital associated with financing what is a very significant investment. This ranges from – and we shall hear more about this in a moment – some £15 billion up to £23 billion in total investment. At commercial discount rates, if we are looking at the overall risk associated with the Severn Barrage, you can of course see that it would be significantly higher than the other costs associated with technology choices that we have. There is a range of ways in which support could be offered to the Severn Barrage but it certainly looks as though it would require significant support – either significant support and/or a combination of how the Government may look at managing some of the risks. This is a massive construction project and, once you overcome the construction risk and you have certainty around that, then of course you have a different risk profile as you go into the operation of the project. This all needs to be looked at as part of the feasibility study.

The big question, as you can see at the bottom of the slide, is that we ticked it on carbon emissions but does this project deliver the policy goal of affordability. Let’s face it, you are spending some £20 billion for 17 TWh. You can build a fossil-fired power station for much less than that, and you may build one fossil-fired power station to delivery your 17 TWh. The other side of that, of course, is that there are the carbon emissions that a fossil plant would contribute, so you might spend £2 billion building an equivalent fossil plant that would give you 17 TWh, as opposed to

46 £20 billion building the Severn Barrage, delivering the same energy into the system. These are all part of the trade-offs and of course there is no one right answer in this. As we shall come to, this requires a diverse approach to what we do with our energy system.

A number of operational challenges would be faced

A number of operational challenges would be faced Demand met by Thermal and Barrage Capacity 60  50 Tidal power is variable but highly predictable ) 40  Shape does not necessarily match peak 30 demand periods

Ou t p u20 t ( GW 10  Therefore challenges are: 0  00:00 12:00 00:00 To big for one generator to take in its Ti m e o f Day Resi dual Generati on Severn Barrage Generation operational portfolio Demand met by Thermal, Barrage Capacity and  It adds additional complexity to scheduling 60 48GW of Wind 50 in the market through peaks and troughs 40  This will then feedback into price volatility 30  20 Need to be supported by very flexible

Demand (GW) 10 assets

0

-1000:00 12:00 00:00 How will the market reward it? Ti m e o f Day Baseload Flexible Wi nd Severn Barrage Generation Page 7 Source: E.ON UK Analysis

Let me move on to the operational challenges that would be faced. From the diagram on the top left hand side of this slide, you can see a typical November day with the demand profile across that day, and you can see the contribution that would come. I have literally take the information from the various reports, and shown a typical contribution that would be made, and the timing of that contribution, to the overall energy demand during that typical day.

Tidal power is variable but the benefit, certainly relative to wind, is that it is predictable. Even though the shape on this slide does not necessarily match the peak demand periods, there may be options to look at how you can compensate for that as part of the overall system. You heard a little about that earlier.

In the diagram below, for effect, as well as the barrage I have put a very large amount of wind super-imposed onto the system there – some 48GW of wind. I have assumed that this was a very windy day and that that wind was contributing to the full extent that it could across that day. You can see a very extreme picture of what that does to the operating regime. You move from periods when you have excess capacity and excess on the system – a negative position – and you see a picture where you start to constrain off your baseload generation. You also create a very, very interesting profile for your mid-merit and flexible plant. Granted, that is a very extreme picture.

On the other side of that, of course, that red band can be anything from 100% to 10% or less. We have a very large wind portfolio, particularly during the winter peak periods. If we look at the capacity contribution from our wind portfolio, we actually get figures – and this is fairly well geographically dispersed – of just under 10%. We could thus have a situation where that red band could fluctuate from the width shown there on the diagram to 10% of that thickness and we have to cope with and accommodate that into how we operate the system.

That introduces some very interesting aspects. In particular, of course, it builds a requirement there to have a very flexible portfolio, supporting this mix on the system.

47 It certainly brings greater complexity. The amount of energy that would be traded through what we call the balancing market, which is a shorter-term market in the way that the electricity system operates, would be massive in these kinds of scenarios. Indeed, what we are showing here is in fact exposing a debate which is important and currently starting and underway. Regardless of what we do with the Severn Barrage, if we are looking at such large volumes of wind on the system, then this is the kind of debate that we have to have anyway. All I am saying is that the Severn Barrage contributes even further to that debate on how we cope with such large amounts of variable power on the system.

It emphasises three areas into the long-term. One is the role of flexible plant on the system and how it is used as part of an overall diverse, flexible energy system. It also emphasises the need for and the role of interconnection, and the increased role of interconnection. If you look at any of the markets that operate with very large amounts of variable power on the system, whether that is in Denmark, or Northern Germany where we have 22GW of wind on the system, you see some very large amounts of interconnection. You see a very flexible approach from the other plant that is supporting that on the system.

The bottom line, however, is that in fact we could be move from a situation where we have some 75GW on the system in total capacity terms, to 120GW on the system. Essentially, we are moving to a situation where we have more variable and lower load factor generation plant on the system. How do you reward all of that capacity that is on the system? First, how do you make it work, and then how do you reward investors who are looking to contribute, whether they want to build renewables or flexible plant on the system? It creates some very interesting challenges which of course have to be addressed as we go through the next 12 months, with the consultation on the Green Package and the role of large amounts of wind, and also as part of the feasibility study that we are going to conduct into the Severn Barrage.

These are all important issues which we need to address soon. I hope you can see that, depending on your view on some of those issues, it has a fundamental effect on how much capacity, and what type of capacity, you put onto the system. I will leave that there, because I am on a hobby-horse, as you can probably tell.

Conclusions

Conclusions

 The project fits with energy policy goals of climate and security of supply but a compromise might have to be made on the goal of affordability

 Its generation characteristics present a challenge that will have to be considered from a wholesale market perspective

 These challenges have to be fully explored as part of the feasibility study

Page 8

In conclusion, the project fits with the energy policy goals of climate and security of supply. I hope there are some themes where we can see that it definitely plays to that. Being very diplomatic here, a compromise might have to be made on the goal of affordability. I hope you can see that there is a very large cost associated with this

48 choice, but it is something that needs to be looked at properly as a part of the feasibility study.

Its generation characteristics present a challenge that has to be considered, and considered soon, from a wholesale market perspective. How do we want this market to work? I am afraid that it is very similar – if you take it in conjunction with large amounts of wind on the system, then we really have to think about how we may have to re-design aspects of the way the market works. These challenges have to be fully explored as part of the feasibility study.

We are facing one of the most exciting times over these next two decades. I am an engineer, although I have done a few other things since, but I am still and engineer: what an exciting time this is for people to become involved once again in a new wave of transforming our energy system.

I implore people, when looking at these debates, to think about them holistically. I have been involved in many debates, as you might imagine, because of Kingsnorth, because of nuclear and also with some of Doug’s [debates]. A microphone is often put in front of me, with one of his colleagues, and I have a great deal of respect for some of the work that Greenpeace is doing to promote decentralised energy and particularly CHP. However, if someone is telling me that they are saying no to nuclear, and no to any contribution, albeit from a smaller amount of coal onto your system, we have to manage a very difficult transition here. The transition, particularly over the next two decades, will be to a low carbon economy and we have to do that with due regard to security and affordability. If we lose the focus on those two issues as part of the trade-off, I can tell you that the people out there and our customers will lose interest in carbon emissions. We really have to take this in a balanced and structured way, but also in a determined way, to meet the challenges ahead of us. Thank you very much.

***

Sue Ion: Thank you very much, Bob, for giving us a run-through from a utility perspective. You have led us to believe that E.ON would not be first in the queue to sign up to the Severn Barrage, unless that was as part of a consortium and the whole thing was considered as part of the UK’s generation mix. We hear that message time and time again, about understanding the totality of the mix.

Our final presentation before the discussion session will be from Yaver Abidi, a civil engineer with a wealth of experience as a consulting engineer right across the world – North America, Asia, the Middle East and Africa. He is currently Group Development Director for the Halcrow Group and holds an MSc in Soil Mechanics from Imperial College, London. He has also studied at the Stanford Business School.

Yaver will talk to us about some of the interesting engineering challenges associated with the delivery of the barrage. The title of his presentation was ‘Financing and Project Management Challenges’, but he also has some very interesting facts and figures on just what it will take to build this barrage, if indeed that is the decision that is eventually taken.

49 50 FINANCING AND PROJECT MANAGEMENT CHALLENGES

Yaver Abidi: I have chosen to look at this project from the point of view of financing and project management. What I hope you will see, as we talk about this, is that no matter how you look at this project – and we have seen several perspectives presented on it – a number of the issues keep coming back, which we need to consider. It is looking at this project holistically, which is a point that Bob just made, that really matters.

As we talk about matters which, at the present time, with the environmental uncertainty that faces this project and the many interest groups that are involved in the debate, I hope you will see that it is really important for us to look at this project not as just a study because, even at this stage, we should think about it right through to operation. This is a power project – it is not an environmental problem, but a power project. It is important to think right through to the end because that is what will help us, even at this early stage, to address the issues in a balanced and holistic way.

We could talk for hours about the project management and financing challenges of this project, but I will try to pick out a few things which I hope will add to the perspective that you walk away with after this seminar.

The project

The project

Black and Veatch (2007) SDC research report 3, Severn Barrage Proposals

Let us just look at the project. You have seen this image already in Roger’s presentation but I will just pick out a couple of points that interest me from an engineering and delivery perspective. The project would involve placing turbines in the deepest parts of the estuary. You will not be able to make this out from the slide but, at the deepest point, this is at minus-30m. We would be putting in place structures that extend from minus-30m, up to plus-10m or so, which means they would be 40m high.

Just to put that into perspective, I am a dams engineer and 40m high dams are pretty significant. In fact, large dams are defined as those above 15m in height and so, for a dams engineer, this would be an interesting challenge. We are putting it into this estuary with this massive tidal range. It is worth just getting a perspective on what it is that we are setting out to do here.

51 The scheme

The scheme

Cardiff-Weston La Rance (1966) Annapolis (1984) Length of barrage 16.1 km 0.75 km 0.20 km

Basin area 480 km2 22 km2 N/A

Turbine generators 216 x 40 MW 24 x 10 MW 1 x 19.6MW (8,640 MW) (240 MW) Runner diameter 9.0m 5.35m 7.6m (Straflo)

Average annual 17,000 GWh 540 GWh <50 GWh energy Sluices 166 (35,000 m2) 6 (900 m2) 2 (130 m2)

Ship locks 2No 360x50 m 1 N/A

Construction 5-10 years 6 years period

Here it is in comparison to the two tidal power schemes which have been in existence for some time in the world. You can see that it is much longer and the basin area is much bigger and the generating capacity is much higher. The size of the turbines is significantly bigger, the energy generation is high, and so on and so forth.

La Rance

La Rance

crédit EDF MEDIATHEQUE

Let us have a look at these two projects. Roger showed one picture but I would like you to look at this one slightly differently. This is the La Rance barrage generating, and the white water downstream of it makes you realise what this is all about. This is not some passive element put in to a marine environment but it is a generating plant, which will have some impact on the barrage. This is a very nice photograph, but it shows you what a tiny little thing La Rance is. It has been around for nearly 45 years and therefore it has certainly proved that you can build in the marine environment – you can put in equipment of this scale and it will operate satisfactorily for extended periods of time.

One of the points you might have heard is that the lifetime of this barrage is 120 years. I have had the privilege of working on the rehabilitation of some hydro-electric plants in Northern Ontario that are nearly 100 years old and these things are still in pretty good shape. This is quite different from some of the fossil fuel plants and so on, in the sense of its longevity and stability.

52 Annapolis

Annapolis

Courtesy Nova Scotia Power

This is another scheme in the Bay of Fundy in Canada. This is actually a test scheme which has been running for 25-odd years. Again, this is in generation mode here and a sluice is open, so there is a single unit where you see most of the white water and then, to the side, there is an open sluice which lets the water through. This is just to help you to benchmark what we are doing.

Financing challenges

I will talk about the financing challenges because this is part of the debate. Once again, the point was made earlier about what it would take to get this thing done. We must think about that because it may be one of the key factors in determining how we take this forward.

The investment

The Investment

Planning and Mgmt and legal supervision 2% 3% M&E off-site Site 11% preparation 5%

Caissons 32%

M&E on-site 34%

Embankments Gates 6% 7%

Not including compensatory habitat, transmission system strengthening

Let us look at the scale of the investment. In case you cannot read this, in Halcrow we have been looking at this project for some time and we are conscious that many of the studies done on it were done in the late 1980s, in a completely different context, in a completely different power market, by a group of enthusiasts who wanted to propose that this project go forward. If there are members of STPG present, I would be in exactly the same boat as you. What we have learned in the UK over the years, however, is that there is a tendency of project proponents towards what is called ‘optimism bias’. Now, the Government has very clear guidance that

53 you do not set out on a project with a nominal 15% contingency because experience shows that you really need to start with a very substantial uplift on the cost estimates of the project. We believe, based on the original costing done but by simply changing the contingency, that we should consider this project at something north of £20 billion.

The other thing that you might find interesting is the pie chart on the right of this slide. The big yellow slice represents the concrete caissons, while the salmon colour and blue on the left show the mechanical and electrical equipment which accounts for 45% of the cost of the project. In both cases, as I shall show you, there are significant challenges for the industry to deliver these and therefore the case for not starting out with an over-optimistic cost estimate is extremely strong.

Private or public sector?

Private or public sector?

• The SDC study concluded that “The Government would need to be a key part in the development and promotion of the project. A Public Private Partnership (PPP) is considered to be a suitable approach for developing the project. • In a 2003 review of PFI projects, the NAO concluded: – PFI incentivises a consortium to take a longer term approach to design and construction – PFI incentivises the consortium to deliver the built asset to budget and on time – The whole life cost approach under PFI encourages good quality design and construction – Expert opinion and experience support the conclusion that these incentives are working • The private sector will have to play a role in this project because of its sheer scale and because it is best placed to manage some of the risks

Should it be done in the private or public sector? The days of that discussion are long over. We have this free and open power market in the UK and, over the last few weeks, as I have become involved in this project, I have been reading about the intricacies of balancing mechanisms and gate closures and so forth. This is really a hugely complex business.

In terms of delivering this project, there is no doubt in my mind that it will be delivered in some form of public/private partnership. I use that term very carefully because, as I will show you with a couple of case studies, government has tried in the past to outsource the whole thing through PFI. I will show you two examples in which Halcrow has had some involvement, which will illustrate the need for partnership in the delivery of this project, which is very high relative to more traditional projects. If it was a highway project, one might look at it differently.

54 Can project finance be arranged?

Can project finance be arranged?

Largest project finance deals from Project Finance International Magazine

First, let us look at the scale of the project. We are looking at a £20 billion-plus project and it would be a very large project financing deal. If you cannot make out the figures on this slide, the largest one that I can find in Project Finance International magazine, which does a ranking of these project finance deals (in dollars), is $24 billion, or £12 billion at today’s exchange rate. This would therefore be a very large project to finance.

What does that mean? When you look at something like the Channel tunnel, the financing of that involved over 200 banks for a massive syndication of the loan. However, that was at a time when the finance industry was in a different place but we have come a long way. Putting aside today’s immediate crisis, where bankers have suddenly discovered that there is no free lunch and that you cannot simply wish risk away, when the thing gets back to its rightful place, there will be enormous capacity in the market to create a project financing opportunity - there will also be lots of players who will want a small part of the risk.

You will also see that project financing in here – oil and gas, and roads and transportation – is reasonably well understood. Types of projects play a big role in this. The other reason why so many people would be involved would be because this would be somewhat unfamiliar to them. I am sure that they could do a fossil fuel power station better than this. Here, however, the risk profile will be perceived to be high.

Case study – Channel tunnel

Let us look at two case studies. First, there is the Channel tunnel – and I will come back to some of the points I make later on. I will try to highlight those things which I think are interesting to learn from this project.

First, there were significant conflicts of interest in the way the project was originally formulated. The people who pushed it forward were a group of contractors who were in prime position, so they contracted with themselves and then stepped away from the actual SPV that was created to deliver the project – but conflict of interest remained. I would like to pick out a couple of points that you might find interesting.

It was of course approved by the government, Margaret Thatcher’s government of the time, as a PFI. In other words, this was a purely privately financed scheme. Similar intentions were being expressed about the nuclear power plants, and decommissioning costs would be entirely borne by the proponents of the project. I

55 think it is a good thing that the government starts with a realistic frame of mind but the reality is sometimes different.

This project had many problems and there are a couple of issues that are pertinent to this discussion now. Sir Alistair Morton said at some stage: “The project was assembled round a hole like a Polo mint. There was no client driving it forward with a vision of what the operator needed.”

It is really important to think about the ultimate operator of the project and they should be at the centre of some of the decisions that are made.

There were various attempts to manage risk in the project through contracting strategies and I will talk a little about the procurement of this under the heading of project management. There were many problems and a good deal of intervention; costs went up dramatically, as you will recall, leading to enormous financing problems. This project has been re-financed so many different times and I am sure that you will recall all of those things.

An important review of this project is that both the revenue forecasts and the construction cost and cashflow were underestimated from the beginning. This seems to be a feature of those people who are the beginning of a deal. In the finance industry, they sometimes talk about something called ‘deal fever’, when everyone becomes very excited and all they can see is that the glass is half full. There are some lessons to take forward as we embark on what might be a very enormous challenge for the UK industry.

Case study – High Speed 1

The other project where Halcrow has been very central in the delivery of it is the channel tunnel rail link, now known as High Speed 1. Yes, revenue forecasts were too high. The private sector did not have the financial strength or equity capital to assume the risk that the Government had intended it to take. This was an important point and you will remember the Deputy Prime Minister intervening at some point to help out on this project.

Because of the way risk was managed, the taxpayer will continue into the 20s of this century to bear some risk on this project in terms of the repayment from revenues that will come from it.

Some of the lessons learned were that projects like this require a clear understanding of where funding will come from, from the outset. That is the basis of continuity and momentum in these projects and this is something that you would need to create for the Severn Barrage fairly early on. You need dedicated people with an understanding of where the money is coming from. You have to have the operator’s view and you have to be realistic about the cost estimates and so on. So those are just a few points to which I shall return later.

56 Drivers of private sector investment

Drivers of private sector investment

• Public sector tends to focus on unit cost of energy to prioritise options and determine viability • Private sector concerned with: – rate of return on investment – the price of electricity including the effects of any price incentives – look in a ‘joined up’ way at prices and costs • Decision driven by perceptions of risk by stakeholders: government, wider industry, promoters, financiers, constructors and customers Price Risk Technical Risk Financial Risk

Costs Capital cost Weighted cost of O&M cost capital Technology risk Credit risk Environmental compensation Revenues Electricity price Capacity Factor Contractual risk Willingness to pay Build Time Financial failure of CO2 credits or RO Planning delays contracting parties certainty Government interference Industry backlash

The other feature of private sector involvement in these projects is that you have seen, even in the previous presentation, a relative presentation of the cost of this project – the unit cost of power generation versus other technologies. It is very common in the public sector to talk about unit costs but in fact the private sector is looking for a return on investment. They want to make sure that there is an adequate return on investment and that they can service the debt they take and return profits to their shareholders at an appropriate level for the risk they are taking. They are very interested in this joined-up way of looking at prices and costs and so the power market in which this project operates – as we saw in the last presentation – is very critical to its success, from the private sector’s point of view.

Decisions are driven by the perception of risk by various stakeholders. On this slide I have put up a variety of risks – a price risk and so on, in the table at the bottom. I have tried to classify as green, amber and red. There are those risks which should clearly rest with the private sector; those risks that are shared between government and the private sector, and those risks that may be unfair to be taken on by the private sector, or where you would pay excessively for the private sector to take those risks on – that is the other way to look at it. There is no fairness in business, but there is a cost.

Price risks

Price risks

www.apxgroup.com

57 If you look at some of the issues that would determine the private sector’s willingness to participate in this project, electricity price – which I will show you here – is a big feature. This is a daily graph of both the volume of electricity traded and the unit price per MWh paid in the course of a day. The scale at the bottom of the slide is in half-hour lots, so this goes up to 48, but this is just a day and you can see how volatile the price is. When the barrage is generating – in the present regime, assuming nothing has changed, that would determine how much more or less valuable the power is. You certainly contract to provide power at a certain rate but the marginal costs of power determine what you are actually paid. That is a very important factor for a project that generates power on the cycle of the tide rather than under the control of the operator. So they will be generating power when there is an ebb tide with which to generate it, or not, and thus the pricing risk is a very important factor in the minds of the private sector.

Drivers of private sector investment

Planning. I would think that if this is to be a public/private partnership, then the private sector would play a role in going through the planning process, because they have information that is valuable in the whole process. However, can they afford to take the risk on the duration and extent of the planning process? I am sure you are all familiar with the fact that the Government is planning to change, or has a White Paper, to modify the planning process in the UK, but it is based on the experience of seven years of planning for Terminal 5, and five years for other major projects. There are extended periods which just create uncertainty for the investor and leave them wondering when the project will actually be done.

On the bottom right of this slide, I have put ‘industry backlash’. As was discussed in the previous presentation, a project like this creates the need to reward others, or somehow to compensate them for having capacity in the system to cover the times when the barrage is not generating and yet demand is high, and yet to turn off those plants when the barrage is generating, so that we can have a lower total carbon emission. It is important, therefore, that this project is about taking the whole industry along: the stakeholders are many and diverse.

Financial viability

It is an expensive project. We have done an economic analysis of this project on the basis of the figures that I showed you, with a high level of contingency, based on the optimism bias recommendations of the Government.

Price risks

The wholesale price of electricity would have to be about three times as much as it is, on average, during these daily graphs that I showed you. On the right of this slide, there is the scale for the price and you can see that, for most of the day, it is somewhere between £40 to £60 per MWh at present. The bottom one, which is just a different day, has a different scale: this was actually 20 May, just a couple of days ago, when power traded at about £80 per MWh.

On its own, this project does not make sense. If you look at it simply as a power generation scheme, it is its other benefits that make it possible for it to be brought into the realms of practicality. I am catholic on whether or not that is a choice we will make but I would suggest that it is a choice we have to make: it is not a simple comparison between what the electricity price would have to be in order for this project to be viable or not. We have had some interesting discussion about that.

58 Support mechanisms

We need support and this bring me back to the idea of the PFI approach - here you are, and here is your problem - to a public/private partnership approach, which is not as common as you would think. I tried to see how many true public/private partnerships there are and I think the Government has found success in the PFI model for delivering schools, hospitals, defence facilities and so on, and therefore they have grabbed that. However, this project is not about PFI. It is not about getting it off the balance sheet and off your back but it is about partnership.

There will be key things that the public sector, the Government, will have to do in order to make this work. They may involve sovereign guarantees, to bring down the cost of borrowing.

Financial viability

You will remember that, in the previous graph, here, we were talking about an 8% rate of return as what the private sector would need but it would depend on the cost of borrowing and their understanding of risk, which would determine the rate of return they were looking for. Sovereign guarantees are something that can happen.

Support mechanisms

Support mechanisms

• Because of its scale, its complexity and drawing on lessons learned from previous major projects of this nature we conclude that: • The project should be a true PPP with the public sector managing the risks that require political support or policy measures such as: – Leadership of the planning approval process and of any necessary habitats directive exemptions – Carbon credits or renewables obligation certainty – ‘Support’ price or other transfer mechanisms to maintain minimum price – Sovereign guarantees

Is the Government used to doing sovereign guarantees? Of course it is. The Treasury is just buying all this bad debt off the banks. They intervened in Northern Rock, but let us not do it in extremis – that would be my recommendation – but let us do it from the beginning. Let us not find ourselves with our trousers down, having to cover ourselves very quickly, but let us do it from the beginning. That is my recommendation.

Support price – there may be a need to compensate the barrage operator to make the project work for them.

Planning approval and so on is a process that will need leadership and I will come back to this, but this project falls under the EU Habitats Directive. Getting an exception from the Habitats Directive, which may be necessary, will need government and the developers to work together to make this happen.

59 Project management issues

In the second half of my talk, let us look at some of the project management issues.

Procurement issues

This is a huge project. The Channel Tunnel was £10 billion, and so £23 billion is a massive project. Do you tender a project like this? These are the kinds of questions we have to talk about.

If you are doing a public/private partnership, can it be done in that spirit of partnership? Can we construct ways of getting the private sector to be efficient and to deliver a value-for-money outcome, without going through the tired old competitive tendering process? I would suggest that this project raises that challenge because I do not know how many people could undertake this project. It would take a big consortium, as we have discussed earlier, and how many consortia do you want?

Then, as was the case with the Channel Tunnel, there were four bids which were completely different. There was rail only, raid/road, bridges hung on cables – all sorts of ideas but, in the end, there were four consortia that had completely different proposals. The decision to award was made miraculously in two months – I do not know how it was done, but it is interesting to think that you can make yourself a real problem by going through competitive tendering and finding yourself in a situation where you just cannot compare the options. I know there are some very clever people out there but these things can become very complicated.

How do you incentivise the parties to deliver the greatest efficiency and effectiveness? This is worth a great deal of thought, and it is worth a great deal of thought now if we are to engage the private sector.

Procurement issues

• Is competitive tendering possible or desirable on a project delivered through PPP on this scale? • How should it be structured to incentivise the parties to deliver greatest efficiency and effectiveness? • How should the generation equipment be procured when there are 3 – 4 major manufacturers whose track record is:

Manufacturer 1 (50% market share) Since 1936: - Installed capacity 4,500MW - 170 generators in 50 plants - 300 turbines Manufacturer 2 Since 1955: - 180 machines installed - 0.8 to 8.4m dia - Up to 50 MW

I want to show you something very interesting about this project, which was a revelation to me. I am not an expert in bulb turbines. There are three or four major manufacturers of bulb turbines in the world – it is a cottage industry. This is manufacturer No. 1 – and I am not advertising anyone so I have not named them – and they claim to have 50% of market share, but I had never heard of them, and I had been in the hydropower field for some time. I discovered that they are a massive conglomerate – they had bought all the cottage industries and put them together basically, so collectively they have done this.

60 But look at the installed capacity since 1936 that they have delivered – 4,500GW. Half of this barrage has been done by them since 1936. They have done 170 generators, and we have 210 in this barrage – and they have done this over the last 70 years, with 300 turbines. Similarly, manufacturer No. 2 is a very well-respected and known continental manufacturer – whoopee, 118 machines installed since 1955. We have 210 to do in five years. So what will you do? Will you go out to competitive tender? There are only three of these guys and they do it in their garages. There are some really interesting challenges here.

Some construction challenges

Some construction challenges

• For a construction programme of 7 years the barrage would require: – 5% of the total UK cement sales – 3.5% of the concrete aggregate sales; or locally it would consume – 225% of the concrete usage in South Wales and – all of the output of fine aggregates from the Severn • At peak, the barrage would require 44,600 workers per year out of 186,000 construction workers in the infrastructure sector in 2006 • It will require new bespoke specialist plant – dredging in rock will need very heavy duty equipment working at depths which can only be achieved by the largest dredgers in the world and in stronger currents than are normal • Each caisson will need almost 20m depth of water to float; these challenging dimensions will require the construction of new construction facilities which will be significant harbours in their own right • The very tidal conditions that make this site attractive for power generation make it challenging for the installation of caissons and the closure of the barrage

Let us look at some construction issues, and I will pick out a couple of points from this slide. You can read this for yourself and see that there are 45,000 workers required. The UK’s current 2006 workforce in the total construction industry was about 1.86 million, of which 10 per cent work in the heavy infrastructure field that we are looking at. Thus, roughly a quarter of the people who are working in construction want to work on this project, and would be needed for it. It would require quite specific and bespoke specialist plant. I hope that this is where my talk will become interesting because I will show you some pictures of some of these things.

These concrete caissons are huge and they will be pretty amazing to construct. Of course the tide, which is the source of the energy, is also the challenge.

Competition for resources

Let us look at the competition for resources. At the same time as this barrage may be going ahead, if we undertake it, there is of course the Government’s nuclear programme. What sort of skills does that need? Well, there is mechanical fabrication and electrical equipment, and concrete – it sounds like much of what we have to do here. So, the same 186,000 or however many people there are – and, of course perhaps I should not say this, but our immigration policy is moving in the wrong direction for this – we need people to come and build these damn things, and they will all be happening at the same time. Why? Because the cliff is right in front of us, as was shown earlier, and we need this power.

In terms of the labour force, therefore, the construction will be stretched in many different directions because of the nuclear power plant. The first round of nuclear power stations will be being built, from broadly 2013 through to 2020, so more or less contemporary.

61 Interestingly, one of the lessons that I forgot to mention on the Channel Tunnel Rail Link was that the second phase of that project saw cost escalation. As part of the consortium that worked on the project management of that, we are very proud to say ‘on time, on budget’ but for Phase 2 of that, the connection to St Pancras, actually the costs increased. Why was that? It was because there was a great deal of competition for labour and for materials and so there was significant price escalation.

Is 60% optimism bias wrong? Everybody will be building those as well, and High Speed 2, and, and, and - so we will be competing in a competitive market place.

Specialised vessels – 1

Specialised vessels - 1

courtesy: Rijkswaterstaat - Adviesdienst Geo-Informatie en ICT (AGI)

I went on the web and looked at the Scheldt barrier in Holland. I mentioned bespoke plant and these ships were constructed especially for that project. The one at the top is for foundation improvement and the one at the bottom is for moving some of the main pieces of plant around.

Specialised vessels – 2

Specialised vessels - 2

courtesy: Rijkswaterstaat - Adviesdienst Geo-Informatie en ICT (AGI)

This slide shows some more of that – this is putting some gates in to one of the barriers that forms part of that massive flood protection for Holland.

62 Caissons

Caissons

• 54 turbine caissons: – 79.5m x 77.4m x 40m height (excluding public road). – Float-out weight 126,000t; final weight 270,000 t – Level of underside of installed caisson – 28.65m OD. Axis level of turbines –17m OD. • 46 sluice caissons – 89.5m x 46.5m to 52.5m x height 24m to 34m – Float-out weight 58,800t to 83,300t; final weight 84,000t to 126,000t, – Gates 16m wide x 9m to 17.5m high

There are 54 of these caissons to be built and they are 80 x 80 x 40m high, as I mentioned to you earlier. They weight 126,000 tonnes when they are floated out. Let’s get this into perspective: a typical, large bridge caisson that I was looking at would be 10,000 or 5,000 tonnes – those are not massive, but this is huge.

The closest thing I could find to this is a project with which I was marginally involved in Newfoundland where, for an oil platform, they made a massive concrete caisson – it was the Hibernia field, for those of you who know about it. This single caisson was built as a major project in its own right and it was 450,000 tonnes, which was really big – but it was a massive project in its own right for which you had to build a lot of enabling facilities.

St Petersburg Barrier

St Petersburg Barrier

• 64 radial sluice gates 24m wide. • Two of six sluice structures floated to site. • Cast in two sections each Each section was 150m X 30m X 10m (draft 4m • 18,000t each • Cost of the completion works >$2 billion • 110 m wide navigation opening closed with a 2500 tonne steel vertical rising gate

This is a project we are working on the completion of in St Petersburg. That caisson is 150m by 30m, and we had 80m by 80m, by 10m high, where ours is 40m. They weighed 18,000 tonnes each. You can see what is involved in moving these things off, and only two of these were done – there are actually six in there but four of them were constructed in the dry, using a cofferdam. Two of these were actually floated into place but I just wanted you to get a feel for the magnitude of what we are doing here. By the way, both of these had massive problems after installation, in terms of settlement, foundations and so on. It is not easy to do this – you don’t just plonk them down, and they are not Lego blocks.

63 Construction dock

Construction dock

courtesy: Rijkswaterstaat - Adviesdienst Geo-Informatie en ICT (AGI)

In an earlier SDC report, there is talk of building these things in dry docks. As time went on, there was talk of doing these on the Continent and floating them out and so on.

This, again, is from Holland. You have to build a really big dry dock in order to build some of these caissons. These (on slide) are quite small – they are 10,000 tonne blocks that formed part of the barrier. You can see on the left in this picture the cofferdam that contained them and, on the right, once it is flooded so that they could be floated out and put in place. The interesting point is that, to float the ones that we need, you would have to go down to minus-20m. Ports today that accommodate super post-Panamax vessels are at minus-15m, so this is a deep, dry harbour, or set of these, that you have to build. Just imagine the planning application for this! I am not trying to make this sound impossible but I am trying to make it sound like a fantastic challenge. I am very excited about the project, although whether it goes ahead or not is a matter that is much bigger than me, but it is fascinating.

Brouwers Dam – caissons in place

Brouwers Dam – caisson placement Brouwers Dam – caissons in place

courtesy: Rijkswaterstaat - Adviesdienst Geo- courtesy: Rijkswaterstaat - Adviesdienst Informatie en ICT Geo-Informatie en ICT (AGI) (AGI)

Here is what putting a caisson in place looks like. These are tiny little ones – these are Lego blocks, but they are the closest thing I could find. You can see a lot of manoeuvring by boats and so on, to put them in place.

Here are some of them in place, and this is what starts happening as you start closing an estuary, in this case, and the tides go in and out.

64 Brouwers Dam – caisson closure

Brouwers Dam – caisson closure

courtesy: Rijkswaterstaat - Adviesdienst Geo-Informatie en ICT (AGI)

This is the closure. For any of you who have worked on dams, closure is really difficult. All the water is trying to get out at the same place, so that the flow is unbelievable. Even if the sluices are open, and even if the barrage is partly built, we have the 16km-wide throat in the Severn Estuary that we will slowly squeeze, so that it becomes harder and harder for the water to get out. They had some pretty big problems here, too. They had a lot of sediment movement and erosion of the bed and so on, which they had to take care of. These are surmountable construction challenges but, nevertheless, that is what we are getting into.

La Rance turbines

La Rance Turbines

crédit EDF MEDIATHEQUE

Source: Andritz Hydro

Source: Voith Siemens Hydro

Let’s look at these bulb turbines that we are going to have. The one on the top left is La Rance, and the others are from various sources. I am sure that you cannot make this out but these things are made – they are not just things that you forge or beat out of a tin sheet. A great deal of work goes into making these. These are adjustable vane blades and they need some very specialised milling kit and so on, which has to be put together. The challenge here is that, because we are going to be so much bigger than the cottage industry that exists, which delivers about 15 of these a year, and we want another 30 a year, then we will create an industry for this one-off project. That point was made earlier, about the fact that this is a one-off project. We have to internalise the costs of that as well. Is a 60% optimism bias too high? I do not think so.

We will have to set up an entire global supply chain, to deliver these massive turbines. I think the 8.5m diameter is the largest that we have and we are going up to 9m, so they are bigger than anything that has been done to date. We will have to get

65 a consortium of these people to work together, because not one of them can do it. We will have to set up manufacturing plant and supply chains that are new.

Meeting these challenges

This review of financing and project management - which I will freely admit that I have just skimmed over to pick out some interesting points that you might find useful and interesting to think about, as I have – creates a very strong case for engaging the actors in this project early. The industry, both in the UK and in Europe, needs to understand.

Let me try to illustrate a simple point. This barrage generates power at the time when the tide wills it. We have an interconnection with France. I looked at probably the same November day that you were illustrating, between France and the UK, and their peak demand is exactly the same clock time as we have here. However, they have a one-hour time difference. With projects like this therefore, you have to start looking at a much wider, integrated energy system, because the real benefits of this will come from tapping into pump storage and other storage schemes that they have, from getting the portfolio benefit of offsetting their wind turbine down times and so on.

If we look at this more in a Europe-wide context, it becomes a much more interesting project. In fact, somebody made the point in one of the papers that the UK is blessed to have this tidal energy resource, but it is a global resource. There are not that many places where you can do this, so we must view it, in assessing it, in a global context, because the problem that it is trying to tackle is a global problem.

You need to get the promoters and developers in, to engage their interest and their understanding of the project early. You need to get the financiers in – not just know, because they are a little scared at the moment, but we will cultivate them. You need the contractors and suppliers to come in – there is much upfront work that needs to be done. You need to get the equipment manufacturers together to work in this consortium that could deliver these bulb turbines.

It is important for the SEA and upfront studies to talk about these project structuring and procurement issues, project financing and temporary works and so on, and the supply chain issues that this will raise, as part of the holistic picture of looking at this project.

Conclusions

My conclusions are that we really need to understand what we are getting into. This is a beast that we can tame but we need to go in with our eyes open. It has potentially profound effects on the power market – think of the surplus capacity that you have to have to make sure that we do not have brown-outs for when the barrage is not generating, but which is idle for some of the time. Bob talked about rewarding those who hold that surplus capacity, and they need to be reimbursed for what they have.

This will lead to higher prices for the consumer. You will have a system with much greater capacity than it needs because you need to have standby capacity in there. These rising prices represent a real test of our commitment to the Kyoto Protocol, because you and I will have to pay more for power. I take a slightly different view on affordability – I think that we are not the ones whom affordability is talking about, but it is talking about the disadvantaged, the poor and the elderly who will need some support to ensure that this does not put them in difficult situations. However, we as a

66 society have to pay more for this, and it is very simple when you look at it from a finance point of view.

It is a challenge to the construction industry. Early engagement is important, as are realistic expectations and careful timing is also necessary. Remember, the nuclear plants are also coming at the same time. It is important to think about when to time this.

We need to engage the private sector but it is very important that we do not make the mistakes that we have made in the past. The roles of the developer need to be distinct from those of the constructors and all the other parties that go into this, but we have plenty of experience to do that well.

Risk should be carefully allocated: do not try to outsource problems. It is really important – this is all of our problem, and it is not any one party’s issue. We need to share out these problems equitably.

We should remain clear on the role of the public sector. There is no substitute for strong leadership, in my opinion, and for sound policy. Financial support may, and almost certainly will, be needed. EU rules may need to be challenged, both on procurement and on things like the Habitats Directive. Instead of a project-by-project focus, this project needs to be looked at in a bigger context – in a global context if not a European context. It is really important that this is about this public/private partnership.

The point I would like to leave you with is that this is not just a project but it is a challenge for this nation. We really need to rise to the challenge if we are to take it forward. Perhaps I sound like the politician, but it is really a challenge for the nation and I find it terribly exciting. Thank you very much indeed.

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67 68 DISCUSSION

Sue Ion: Thank you very much for that tour de force, Yaver. Let me invite all the speaker to the podium and we will open the remainder of the afternoon to questions, answers and discussion.

Not only, as Yaver pointed out, are there both amazing opportunities and challenges there, but he has just given Sarah an even bigger challenge in that she now needs at least another 10GW connector across to mainland Europe, to take true advantage of this potentially global asset.

Kevin Mowbray (Welsh Energy Research Centre): I have a question for Bob. In terms of the UK and EU carbon taxing, how is this affecting investment for your new plant? How do you think this will affect Severn Barrage investment?

Bob Taylor: When you say EU carbon taxing, I will make the assumption that you are talking about the Emissions Trading Scheme and the requirement to buy carbon permits and things like that.

Kevin Mowbray: Yes, and the instability of it.

Bob Taylor: We have seen some signs that it is becoming a little more stable. The Emissions Trading Scheme is an important part of how we look to the future when we are assessing the choices that we make with investment. If you stand back and think that we take long-term views of where we think the commodity prices are going for some of the fundamental commodities, we also have to take a long-term view about where we believe the carbon price is going as well.

In the midst of all of that, we look at various scenarios, and hence we come up with a diverse portfolio, because there is actually no one right answer. We certainly see some strengthening of the carbon market, which is in its second phase at the moment. We see legislation now coming through, which should bring more certainty through to 2020 and possibly, to a degree, up to 2025. That, plus increasing auctioning of carbon permits from 2012 onwards, will mean that we should see a natural strengthening. In fact, if people want to build fossil power plants, then they may need to look at that very carefully, because you will have to buy those permits to allow you to generate. So there should be some rewards coming through there which give the right signals, but there is some way to go yet.

Low carbon generation is one of the ways in which the Severn Barrage could earn some reward. However, you can see from the investment cost that it will need probably even more than we see in the short term, that will come through from the carbon price.

Vaughan Cole (Health and Safety Executive): I have a question for Bob. Early on in your slides, you showed an energy gap, if you recall that.

Bob Taylor: Yes.

Vaughan Cole: In that, there is a large coal supply element, which seemed to go on for a long time. Is it possible to look at that slide again? Perhaps you could explain how the coal fired element is reduced.

69 The Electricity Industry faces significant challenges

 By 2020 a significant amount of the  Capacity gap up to UK’s existing coal and nuclear 25GW by 2020

capacity will be closed  Th i s eq uat es t o over 30% of current capacit y  A sustained investment in new capacity is required to close the supply demand gap Source: E.ON UK EU Green Package Targets for UK  New capacity will have to built in an economic environment that is 20 % less carbon 15% of Energy in 20% efficiency improvement emissions the UK from in final energy demand focused on fulfilling energy policy compared to 1990 Renewables against BAU (EU wide and levels non-binding) goals of diversity, affordability, carbon emissions reduction and renewable energy targets Across heat, transport and electricity Page 2

Bob Taylor: Yes, that was to 2020. Basically, there is about 28GW of coal on the system at the moment, in terms of capacity. The coal that will close out up to 2020 is probably around 11GW or 12GW, or something like that. The rest of the coal, by the way – a large amount of that we will see closing across the next decade beyond as well.

Indeed, what you are seeing there is the capacity but what you are not seeing is the energy generated from that capacity because, with the increasing constraints of the Large Combustion Plant Directive, much of that capacity, even though it may have FGD on it, will be constrained in its load factor that it can contribute. I do not know whether I am addressing your question, but you are looking at just the next 12 years here.

Vaughan Cole: On that slide, are you showing beyond 2015, for instance, and the decline to 2015? Are you showing new plant?

Bob Taylor: No, sorry. All you are seeing on that slide is what happens to the current capacity that is installed.

Vaughan Cole: Is that existing? Are you expecting –

Bob Taylor: It is not showing anything about what is built in the future. All you see there is a number of assumptions about what happens to the current –

Vaughan Cole: So you are expecting the existing plant to go to 2020, say? Or some existing plant?

Bob Taylor: Some of them, yes, absolutely.

Vaughan Cole: Thank you.

Professor Andrew McNaughton (Network Rail): My question is for Yaver Abidi. You have just described the extraordinary nature of one barrage proposal. We heard earlier about the Shoots or English Stones version, with much less power, but a place also where, potentially, the country needs another road and rail link between Wales and the other place. Do you have a view about the build-ability and finance- ability of that version of a barrage across the Severn?

70 Yaver Abidi: I can only give an outline view. I have chosen to concentrate on the Cardiff Western scheme because it illustrates some of the issues in there. If you are familiar with the SDC report, it argues that this project is much more do-able – and it is. I think it is at around 1000MW, and I am not sure that it is much bigger than that. It is certainly in the realms of having it delivered in a more traditional sense.

However, I think its impact still on the power mix in the country would mean that there would need to be some form of support to the private sector on the continuation of the Renewables Obligation, or if you look at the EU Carbon Trading Scheme, its longevity. People would not necessarily enter that project without some level of support, or some threshold that would ensure that their investment gave a due return for the risk that they take. That is a project that is much less dramatic in its nature, I would say, but its impact on the global issues, or on the European-wide carbon objectives, is much less. I would say that it would just be part of the entire renewables mix and it would not have such a dramatic impact. I chose to speak about this one in particular for that reason.

Professor Ralph Benjamin CB (Visiting Professor, University of Bristol): I suggest that it is unrealistic to discuss either the cost or the procurement of a fluctuating source of energy, whether it is wind power or a tidal one, without at the same time considering the complementary capacity to maintain the power supply at a time when the power is less than maximum or even absent. One possible mitigation of this problem would be if the missing power were supplied by a nuclear source which in fact operates at full power all the time and then only part of its power is needed. The rest could be used to generate hydrogen as a replacement – and an environmentally-friendly replacement – for fossil fuels.

Doug Parr: There are a number of ways of approaching the supply/demand dynamic and we focus a good deal on the supply side as the only means of doing it, although it is not necessarily the only way of dealing with it. There are alternative technologies, which may be small scale but they could be made larger, which could shift peak demand.

I am not going to get into nuclear now, because I am sure that I could talk about nuclear and you would argue back at me, and that is not the point. However, whatever happens, it seems to me that we will have a situation where we need much more effective supply-side management or storage of electrical power. At the moment, I do not think the market conditions actually reflect the need to bring on the technologies and the value in doing so. At the moment, it is very much a supply/demand match, but the bit in the middle – both in terms of the wires and transformers and so on, but also in terms of the balancing services – is a little undervalued.

Hydrogen is one way of doing it but, of the options on the table at the moment, it is quite an expensive one. Of course, it is technically do-able and we know how to do it, so it could be done. Let me put it like this: Greenpeace used to be really enthusiastic about the hydrogen economy but we are less so now because there are some fundamental challenges for hydrogen storage which have not been overcome. It is better to take a slightly more technology-blind approach to this and say that we need better means of storing electrical power. That is a better way of approaching it – after all, one mega-breakthrough in battery technology and the hydrogen economy is history. So, rather than saying that we will take this particular approach to doing it, we need a better value on the storage and management on the intermittent supply side, so that we are better able to meet a demand which is also managed in a way where it is not simply a case that, if anybody wants something, they just get it.

71 Bob Taylor: I just want to reinforce that. When I was showing the variability on the system, I perhaps even forgot to mention energy storage. I had three things there, and the last one should certainly have been about energy storage. We have announced a fairly sizeable research programme on that but, in a sense, as a sector, we have been seduced into a lot of stuff on fuel cells and the hydrogen economy and so forth.

In fact, one of the unsung areas, both in demand side management and storage and, in particular, battery technology - if you think about that complementing certainly smaller scale variable aspects of decentralised energy, then I agree.

Professor Brian Rofe (Consultant): I am addressing two points. First, Roger pointed out the very positive aspects of the barrage and what it actually achieved in controlling the speed of the Severn flow, and the positive answers for that. Is it possible to put these things over because many of the objections 20 years ago were that it would disturb the birds and that this would be a bad thing.

Just putting the opposite view, the only other alternative that has been floated by the panel has been wind farms but, in environmental terms, these are pretty disastrous. I am a member of RSPB and I think they are terrible. Would you like to comment?

Roger Falconer: First, if you look at the figures produced by the RSPB, the bird populations in the Severn Estuary are relatively small. In the Ribble Estuary, for example, which is a piddling little estuary compared to the Severn, the bird figures are a multiplier of five greater than they are in the Severn.

The currents to which I was referring in a positive manner, if you like, are based on computer model simulations. In terms of the loss of inter-tidal habitats and so on, we should look more towards the possibility of two-way generation. I am only looking at it from the fairly academic point of view of computer simulations, but there may be construction difficulties with two-way generation and so forth. It is clearly more complicated than Lego blocks to build the barrage.

If you went for two-way generation, you would resolve some of those problems. You could certainly reduce the loss of inter-tidal habitats quite considerably and you could address many of the other environmental concerns.

David Powell (Mott MacDonald): This is a question for the operator but first let me say how much I appreciated the presentation by Yaver. I thought his cost estimate was far more realistic and the contingency he put in there may even be an under- estimate in the long-term, particularly when you look at all the logistical problems that are involved in delivering a scheme like this.

If you were to simplify his figures – let us say that it cost £24 billion and you were generating 8000MW, that works out roughly at £3 million per MW. I know, for instance, that conventional hydro at this point in time costs around £500,000 per MW, so you are talking about power which will cost six times what conventional hydro costs.

What has not been mentioned is where wind power sits in this equation and what the differential or relative cost would be, say, in relation to this particular project. No matter that the price of electricity may triple, or no matter that the Carbon Trading Scheme may influence this to some extent, you still cannot avoid that differential. Therefore, you have to ask whether it really is viable, because there will always be

72 other renewable sources of energy which will in fact be far more cost effective. Therefore, you will never demonstrate a sensible return on the investments.

I do not know whether the operator or Yaver would like to comment further on this.

Yaver Abidi: One of the factors about tidal energy is its predictability. One of the features of the UK power market is that the forward contracts for power are not that long-term. This would create a different element in the mix, where we can pretty much predict what power generation we will have in 10 years’ time on 24 November, or whatever.

I agree that, per se, it does not stack up, but this holistic view of the entire power market, with continental Europe as well, is necessary before we come to any conclusion. Wind is still unpredictable: it is good as a portfolio, but you are talking about a 10% capacity factor.

Bob Taylor: That would be during the winter peak, from the experience of our existing portfolio, yes.

Yaver Abidi: Right, so there is 90% which is idle. It just has to be looked at in a broader context. I am not here proposing that this project should go ahead at all, but I just think that this seminar should be opening the debate to a wider set of issues than purely environmental, purely cost based per unit of power, and so forth. I hope it succeeds in doing that.

Sue Ion: I will use chairman’s prerogative to add a comment into that, against the question that was posed. The requirement for portfolio balancing – putting all the eggs in one basket for any type of technology - does not seem to be a very good idea for the 21st century. Guaranteeing security of supply and having technologies in there which have an element of guaranteed security of supply seems to be a sensible way forward. However, we then have to recognise that they do not all cost the same and that some cost more than others. In days gone by, we would have had a Central Electricity Generating Board with a mix of technologies in its portfolio, which would have taken decisions on a portfolio basis and had a mix and match. We do not have that any longer so an open question back into the policy field is, can the market deliver a truly balanced portfolio without further central planning and government intervention? I offer that as an open comment.

Speaker: From the North Wales perspective, the speeches today have been very instructive but the social element of sustainability has not been mentioned, and that is something about which we can contribute from North Wales, having been flooded from the coast.

Another thing that has not been mentioned is the Stern Report, which fits tidal power as a hand fits a glove – but only when you look at it around the whole of the UK coast. Why is it that London, for example, with the Thames, is only looking at it from the point of view of flood defence, whereas Cardiff is only looking at it from the perspective of energy generation? Surely, these are two complementary projects that ought to be looked at side by side, similarly with North Wales.

Something we can offer with coastally attached tidal impoundment is the sort of phased sequential installation of a project. You thus do not have one great big massive project costing £200 billion all in one go – perhaps the first instalment might cost £2 – £4 billion, and so on. Perhaps with Cardiff we should look at a coastally attached impoundment looking at a smaller section of the coast first, rather than

73 going for this massive thing that cannot be matched anywhere else around the UK. We need to look at how projects around the UK can match each other, looking at the tidal time incidence, and at how it can actually contribute to the baseload – not just as a peripheral, marginal add-on extra, but actually contributing alongside nuclear in to the baseload.

Hazel Prowse (Cathley Enterprises): My Dutch neighbour tells me that the Netherlands is not at risk so much from the sea level rising as from high, perhaps abnormal river flows coming down. Would high river flows from freak weather actually be a benefit in ebb tide, or are they insignificant?

Roger Falconer: I think they are really insignificant. The flow in the Severn is relatively small. The peak flow, 1:100 – I have forgotten the figure, but it is about 600m3/second, which is the same as the Taff. The difference between the Taff and the Severn is that it pretty well all comes down in one go in the Taff, while in the Severn it takes quite a long time to come down. If you look at the flow in the Severn compared to the flux of water passing any section of the Severn Estuary, it would be very much higher. The flow from the Severn is relatively small and sedimentation coming down the river drops out pretty quickly. I do not see that there is a big problem.

Perhaps I could make a comment in answer to the person who spoke from Mott MacDonald. If we have a sea level rise of 1m to 2m, then places like Cardiff are not very much above sea level. If we have anything like the 5m that James Hanson is proposing might be the case, then I do not want to be alarmist but 5m would drown out Cardiff and many other major towns along the estuary. The barrage would then be a very feasible flood defence structure. Certainly, even at 1m to 2m, we have major flooding problems in the estuary at the moment, or we will have.

Sue Ion: Thank you very much for that, Roger. It is my job to sum up.

First, let me thank everyone for coming this afternoon. We have had an extremely informative afternoon which has given us, as an Academy, and also government policy-makers, a great deal to think about. We have had excellent expositions of a number of issues that cannot be separated out. These range from the technology choices that we might have available to us, to the environmental and sustainability concerns, and whether this option amongst many is one that you would put at the top of the list; from the utility perspective, from the point of view of the huge risk and the inability of the existing utility base to swallow the sort of risks involved without being part of something wider, and from the project management, financing and just sheer engineering challenges of delivering something like the project we have seen described.

There are many questions still to come and a huge amount of analysis still to be undertaken, and a very big challenge for government of setting it all within the context of a total not just UK system, but European and global systems, to make sure that the many pieces of the jigsaw all hang together to give us safe, secure supplies of energy, going forward, and ones that enable us to enjoy the standards of living that we have had over the last decade.

Many thanks to all the speakers – I am sure you will be able to gain access to their presentations if you wish. I am sure that the Academy will sponsor future events of this type to try to inform the community and take things forward. Thank you very much indeed.

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