House of Commons Scottish Affairs Committee
Meeting Scotland's Future Energy Needs
Second Report of Session 2004–05
Volume II
Oral and written evidence
Ordered by The House of Commons to be printed 16 March 2005
HC 259-II Published on 7 April 2005 by authority of the House of Commons London: The Stationery Office Limited £13.00
The Scottish Affairs Committee
The Scottish Affairs Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of the Scotland Office (including (i) relations with the Scottish Parliament and (ii) administration and expenditure of the office of the Advocate General for Scotland (but excluding individual cases and advice given within government by the Advocate General)).
Current membership Mrs Irene Adams MP (Labour, Paisley North) (Chairman) Mr Alistair Carmichael MP (Liberal Democrat, Orkney and Shetland) Mr Peter Duncan MP (Conservative, Galloway and Upper Nithsdale) Mr David Hamilton MP (Labour, Midlothian) Mr Ian Liddell-Grainger MP (Conservative, Bridgwater) Mr John Lyons MP (Labour, Strathkelvin and Bearsden) Mr John MacDougall MP (Labour, Fife Central) Ann McKechin MP (Labour, Glasgow Maryhill) John Robertson MP (Labour, Glasgow Anniesland) Mr Mohammed Sarwar MP (Labour, Glasgow Govan) Mr Michael Weir MP (SNP, Angus)
Powers The committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the Internet via www.parliament.uk.
Publications The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the Internet at www.parliament.uk/parliamentary_committees/scottish_affairs_committee.cfm
Committee staff The current staff of the Committee are Mike Clark (Clerk), Diane Nelson (Committee Assistant) and Camilla Brace (Secretary).
Contacts All correspondence should be addressed to the Clerk of the Scottish Affairs Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 6295; the Committee’s email address is [email protected].
Witnesses
Wednesday 19 January 2005
Mr Norman Harrison, Mr Sandy McWhirter, Mr Marc Murray and Dr Beth Taylor, UKAEA Ev 1
Tuesday 1 February 2005
Mr Maf Smith, Scottish Renewables Forum; Mr Niall Crabb, Scottish Coal, Mr Jimmy Ferguson, Wavegen; Mr Alan Mortimer, ScottishPower Ev 21
Tuesday 22 February 2005
Professor James Lovelock CH CBE DSc FRS Ev 32
Tuesday 1 March 2005
Mr Ian Marchant and Mr Paul Smith, Scottish and Southern Energy Ev 39
List of written evidence
United Kingdom Atomic Energy Authority Ev 1 Scottish Renewables Ev 18 Professor James Lovelock CH CBE DSc FRS Ev 32 Scottish and Southern Energy Ev 39 Stuart Young Ev 53 Confederation of UK Coal Producers Ev 58 Dounreay Action Group Ev 59 Julian Walford BSc(Eng), MBE, MIEE Ev 61 Alan J Scott MIMechE, Ceng Ev 62 Alistair J MacDonald BEng CEng MIEE Ev 64 Energywatch Ev 69 Industrial and Power Association Ev 71 David R Craig BSc MSc CChem MRSC Ev 72 Nuclear Industry Association Ev 76 The Highland Council Ev 77 Highlands and Islands Enterprise Network (HIE) Ev 80 Aker Kvaerner Engineering Services Ltd Ev 85
Scottish Affairs Committee: Evidence Ev 1 Oral evidence
Taken before the Scottish Affairs Committee
on Wednesday 19 January 2005
Members present:
Mrs Irene Adams, in the Chair
Mr Alistair Carmichael John Robertson David Hamilton Mr Mohammad Sarwar Mr John MacDougall Mr Michael Weir Ann McKechin
Memorandum submitted to the Committee by UKAEA (United Kingdom Atomic Energy Authority) — Over the past 50 years, UKAEA at Dounreay has provided a major source of direct and indirect employment in the Caithness and North Sutherland region. Dounreay is estimated to support nearly 5,000 jobs across the UK, with some 2,050 of those jobs located in Caithness. — In April 2005, The Nuclear Decommissioning Authority (NDA) will become responsible for the decommissioning of UKAEA and BNFL sites and UKAEA will become a contractor to the NDA. UKAEA has responded to the challenge of competition by recently announcing the acceleration of the decommissioning programme from 2063 to 2036. — The acceleration of the decommissioning programme has implications for the Dounreay workforce and in recognition of this issue, UKAEA is working closely with the local development agencies. — The main thrust of the work with the development agencies is to ensure that the local business community maximise the benefits of significant spending from the decommissioning programme in the short term and to use this opportunity to lay the foundation of a sustainable economic base in the longer term when the Dounreay decommissioning project is complete. — The current training opportunities provided by UKAEA in the North of Scotland can instil qualities of enterprise, innovation and learning from the decommissioning programme. It is these qualities, gained from cleaning up the nuclear legacy, that are establishing the Northern Highlands of Scotland as a world class base for expertise in nuclear decommissioning and environmental restoration and will ensure that the ultimate legacy of Scotland’s first “atomic factory” is one everyone can be proud of. — UKAEA does not have a view on what the long term solution for managing the UK’s radioactive waste should be, as these issues are the responsibility of the Committee of Radioactive Waste Management (CoRWM). — UKAEA is leading the UK Government’s involvement in the fast track development of fusion power, which oVers a safe and environmentally benign alternative to fossil fuels. This work is being carried out by UKAEA at Culham in England.
UKAEA—Who We Are The United Kingdom Atomic Energy Authority (UKAEA) was incorporated as a statutory corporation in 1954 and pioneered the development of nuclear energy in the UK. Today we are responsible for managing the decommissioning of the nuclear reactors and other radioactive facilities used for the UK’s nuclear research and development programme in a safe and environmentally sensitive manner. Our objective is to essentially restore the sites for conventional use.
Background The UKAEA Dounreay Nuclear Test Research Establishment was established 50 years ago in 1955 for the development and demonstration of nuclear fast reactor technology for the production of electricity. The role, by necessity evolved to provide all the functions to serve that goal with the addition of fuel fabrication, reprocessing and waste management activities all integrated on one site. Ev 2 Scottish Affairs Committee: Evidence
Three reactors were constructed and operated, the Dounreay Materials Test Reactor (DMTR), the Dounreay Fast Reactor (DFR) and the Prototype Fast Reactor (PFR), to advance the science and technology behind nuclear fast reactors. All programmes were successful in meeting the goal of developing fast reactor technology as a viable proposition for commercial power generation. The choice of Dounreay for this project had a major impact on the area. The nearest town of Thurso trebled in size from 3,000 to 9,000, UKAEA built 1,000 new houses, and new schools and a college were constructed. New businesses developed to take advantage of contract opportunities at the site. In 1988, the Government announced that the fast reactor programme would be terminated in 1994. The then Highlands and Islands Development Board commissioned consultants PIEDA to examine the socio- economic consequences of this, and additional funding was made available to the economic development agency to oVset the impact on Caithness and Sutherland of the rundown of the programme. The cessation of the programme in 1994 led to a substantial reduction in manpower at Dounreay. UKAEA sought to oVset the loss of government funding at Dounreay through diversification as a nuclear fuels business. In 1998, however, UKAEA concluded this business was no longer feasible, leaving it to focus entirely on decommissioning of the fast reactor liabilities. A major recruitment drive took place to staV the decommissioning programme, and employment levels increased substantially. In 2000, UKAEA Dounreay published the Dounreay Site Restoration Plan (DSRP), which at that time was probably the most comprehensive blueprint for the restoration of a major nuclear site in the world. This envisaged a 60-year programme, costing in the region of £4 billion, with employment levels remaining high during the major construction period associated with the first 20 years. In 2001, the Scottish Executive announced the formation of a decommissioning task force under the auspices of the Highlands and Islands Enterprise network to address the opportunities and threats arising from closure of the site.
Recent Developments In April 2005, the Nuclear Decommissioning Authority will become responsible for the decommissioning of UKAEA and BNFL sites. UKAEA will become a contractor to NDA, and it is expected these contracts will be opened to competition at a later date. UKAEA is preparing for the challenge of competition, and in October 2004 announced an acceleration of the Dounreay decommissioning programme from 2063 to 2036, and a reduction in estimated cost to £2.7 billion.
UKAEA’s Current Role Within the Caithness and North Sutherland Economy It is diYcult to overstate the importance of UKAEA to the economy of the Dounreay local area, given that the company and site has been a major source of direct and indirect employment in the region for the past 50 years. While the focus of work carried out at Dounreay has now changed from the development of the fast reactor and its fuel cycle to the decommissioning and environmental restoration of the area, the scale of the work to be undertaken will ensure the site remains a major employer in the area. Consultants assess the current impact of Dounreay on the local economy as follows: — the activities of the site support some 2050 local jobs in the area, accounting for nearly 20% of the total employment across Caithness and North Sutherland; — decommissioning Dounreay is worth approximately £80 million a year to the economy of the Highlands in general and Caithness and North Sutherland in particular through net salaries, pensions, contracts and sub-contracts; — across Scotland as a whole, the total employment impact of the activities of UKAEA Dounreay is estimated to be nearly 3,000 jobs, with only around 870 local outside the local Caithness and Sutherland area; and — a further 1,740 jobs are supported across England and Wales. As such, in total the activities of UKAEA Dounreay are estimated to support nearly 5,000 jobs across the UK as a whole. — A number of key employers based in the local area act as contractors to UKAEA, while other local service providers benefit from the spending power generated by UKAEA’s activities. — While not the only major employer located in the area, the presence of UKAEA contributes to the unusual employment structure in Caithness and North Sutherland. Rather than appearing typical of a remote rural area (high concentration of employment in tourism, traditional manufacturing, low share of full time jobs), the employment structure of the region is more akin to a small urban region (high concentration of employment in advanced manufacturing and business services, high share of full time jobs). Scottish Affairs Committee: Evidence Ev 3
The Future As previously stated, UKAEA is embedded within the day to day economic activities within the Dounreay area. Its association with the local community over the last 50 years has been positive and very healthy in regards to the economic, social and cultural activity. As such UKAEA has a strong sense of responsibility to the local community and wishes to ensure that its activities can provide a positive economic influence over the area for many years to come. With the advent of the NDA and the expected introduction of competition for the management of the Dounreay site within the next five years, UKAEA must fulfil its governmental obligations alongside those of corporate social responsibility to its employees and the community. UKAEA intends to fulfil its obligations to government by accelerating the decommissioning of the legacy of the fast reactor technology developed at the Dounreay site.
Implications of the Accelerated Decommissioning Programme for Dounreay Employees The nature of nuclear decommissioning at a site is that the more successful the project, the fewer staV and resources are needed to complete the job. The figure below presents the anticipated run down of UKAEA personnel required to decommission the site, as our new accelerated programme progresses. It is anticipated that this trend will be mirrored in the local contracting community.
UKAEA Staff Projections for Caithness
1400
1200
1000
800
600
400
200
0 05 07 09 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 Financial Year Professional / Admin Skilled
UKAEA anticipates that the required decrease in staV numbers for the first five years will be able to be met through natural wastage and retirements. UKAEA are also making eVorts to re-direct UKAEA staV into project delivery roles by supplementing existing skill sets with new training to provide them with the tools to meet the new opportunities within decommissioning. UKAEA have also made a commitment to ensure that the existing apprentice, scientific trainee and graduate recruitment will still be undertaken at current rates of eight apprentices, four scientific trainees and six graduates per year. UKAEA appreciates that it needs to retain core skills within its staV and recognises the need to address the shortfall in nuclear skills. To this end UKAEA has made a number of investments to ensure that local community can provide a highly skilled and experienced workforce to help both with the Dounreay decommissioning project and make the area attractive for other companies to invest in. Some of these initiatives are: — UKAEA’s Major Project and Engineering Director is the chair of the advisory council of the UHI Millennium Institute Decommissioning and Environmental Remediation Centre (DERC) at Janetstown, near Thurso. — UKAEA launched Britain’s first modern apprenticeship in nuclear decommissioning, in partnership with Caithness and Sutherland Enterprise (CASE) and North Highland College UHI in 2003. — UKAEA has invested £300,000 in a Learning, Education and Development Centre at Dounreay in 2004, which delivers training to personnel all over the UK. — UKAEA has collaborated with the North Highland College UHI, CASE and French counterparts CEA and Grenoble university to establish a European masters degree in decommissioning, creating a qualification recognised throughout Europe. Ev 4 Scottish Affairs Committee: Evidence
Working with the Community for an Economic Solution UKAEA has always strived to ensure that it has good local links with the community. Since the publication of the Dounreay Site Restoration Plan in 2000, UKAEA has been working with CASE in support of their Dounreay Decommissioning Task Force. UKAEA is also providing support to the Caithness Marketing Initiative being spearheaded by Lord Maclennan (and supported by the Prince’s Trust) by seconding a senior manager for three years to assist with the establishment of the initiative. UKAEA is also is facilitating the involvement of a regeneration “guru” Professor John Fyfe as an expert advisor to the local community agencies. In addition UKAEA is undertaking a local opinion survey on issues aVecting Dounreay, including socio-economic development in the coming months. As a NDPB charged with the responsibility of the environmental restoration of its own sites, UKAEA does not have the responsibility or remit to undertake regional development. Economic development in Scotland is devolved and at the local level sits with CASE, part of the Highlands and Islands Enterprise Network. UKAEA is working very closely with the development agencies to support their programmes and eVorts to ensure a viable economic future for Caithness and North Sutherland
UKAEA Corporate Social Responsibility The UKAEA has publicly stated goals and a mission statement that build on its core values of safety, environmental responsibility, value for money, public acceptability, personal accountability, and continuous improvement. These values are also at the heart of its policy on Corporate Social Responsibility (CSR). UKAEA is committed to making social and environmental responsibility integral to the way it does business, based on policies and practices that include: — Safeguarding the health and safety of the general public, employees and contractors working on UKAEA sites. — Protecting the environment. — Providing value for money to shareholder, customers, and UK taxpayers. — Supporting the prosperity and well being of the communities around UKAEA sites. — Maintaining good employment practices. — Dealing fairly with contractors and suppliers. — Being open and honest in communications. — Consulting and engaging proactively with stakeholders. UKAEA has undertaken a number of CSR initiatives in the past year including investing £500k in the refurbishment of Thurso Town Hall, as a community owned civic amenity centre and major gateway for tourism in Caithness incorporating the important story of Dounreay. UKAEA has also donated a £50,000 grant to the award winning community regeneration project in a depressed area of Wick (the highest unemployment rate in the Highlands and Islands) for sustainable development activity.
The UKAEA Dounreay Socio-economic Plan As required by its forthcoming contract with the NDA in April, UKAEA is currently working on the development of a Dounreay socio-economic plan to assess the eVect of its newly accelerated decommissioning strategy. The socio-economic plan will develop and continue the significant socio- economic development work that UKAEA has carried out over the last 50 years and will highlight some of the more significant activities and their consequences. UKAEA has been active in recent years in supporting the eVorts of CASE in the development of Caithness as a centre of excellence in nuclear decommissioning. UKAEA has undertaken and supported the following series of initiatives to facilitate economic development within the region in a number of key areas, including: — An international Fast Reactor decommissioning Alliance set up by UKAEA, including local firm JGC Engineering and Technical Service, is now using its liquid metal skills gained from this project to bid for work internationally. — UKAEA became the anchor tenant at Forss Science and Technology Park, which unlocked a £6 million investment by private sector. — UKAEA has structured its tender process in order to maximise the potential for local businesses to participate in decommissioning projects. — UKAEA has been heavily involved in the success of test and trials facility at Janetstown which was a catalyst for £7 million investment by CASE and the European Regional Development Fund in new facilities, including the UHI Millennium Institute’s Decommissioning and Environmental Remediation Centre. Scottish Affairs Committee: Evidence Ev 5
— UKAEA is actively promoting nuclear decommissioning opportunities at Dounreay to business throughout Scotland through close working with HIE and Scottish Enterprise, and DTI initiative to exploit the synergy of skills in the nuclear, oil and gas and renewables industry sectors.
UKAEA’s Commitment to the Future Economic Development of the Dounreay Area In summary, UKAEA Dounreay last year recruited its 1,000th engineering apprentice since 1955. This year UKAEA expects to recruit its 1,000th scientific and secretarial trainee. The success of these training programmes in providing an opportunity for young people in the Highlands and Islands, over the last 50 years, is arguably the greatest benefit Dounreay has brought to the area. UKAEA is committed to helping the local community diversify and utilise the opportunity provided by the significant spending profile, brought by decommissioning Dounreay over the next 10 to 15 years, to help encourage the development of the local community away from its historical heavy dependence on Dounreay’s activities in the area.
(ii) The Long Term Strategy for the Management of Radioactive Waste, in Particular ILW Dismantling and cleaning up a complex former research and development site like Dounreay produces significant quantities of diVerent types of waste. Some of this waste is radioactive because it has come into contact with radioactive material or been irradiated, and may require special handling to protect workers, the public and the environment. Other wastes, such as demolition rubble and metal, can be dealt with as normal industrial waste and recycled. Correctly categorising and segregating these wastes is integral to a safe and eYcient decommissioning programme. At Dounreay, there are three main types of solid waste: — Exempt—waste produced in areas where radioactive materials have been handled and which may have traces of radioactivity up to a maximum level similar to that found in jars of coVee. This waste is exempt from the disposal requirements of the Radioactive Substances Act and can be disposed of alongside other industrial waste. — Low Level—waste which is too radioactive to be disposed of to ordinary industrial landfill but is below the level at which special precautions such as thick shielding are required. There are two licensed disposal sites for LLW in the UK—a series of shallow pits at Dounreay, which are now full, and the national facility at Drigg in Cumbria used by all other producers in the UK. — Intermediate-level—mostly long-lived waste which requires special precautions, such as thick shielding, to protect workers and the public. Many years ago at Dounreay, such waste was disposed in a shaft at the site. Today, it is held above ground safely in engineered stores pending a national policy for its long-term management. UKAEA are convinced that the long-term strategy for the management of radioactive waste is an urgent requirement for the success of the nuclear decommissioning strategy for the whole of the UK.
Low Level Waste Unlike most other nuclear sites, which dispose of their LLW at the UK national LLW disposal facility at Drigg, in Cumbria, Dounreay has always operated its own authorised LLW disposal facility. This facility consisting of six shallow trenches, has been used over the past 40 years to dispose of around 33,000m3 of Dounreay’s LLW. As Dounreay’s facility is now full, some of Dounreay’s current arisings of LLW can now be disposed of at Drigg and an application for Drigg was made to SEPA on 18 April 2002. This application is currently under consideration by SEPA. In addition there are two categories of LLW that are not normally disposed of at Drigg and these will have to be stored on an interim basis at Dounreay. The first category does not meet the conditions for acceptance by Drigg and will be stored until it can be disposed of in either a new future suitable UK national repository or under special arrangements with BNFL at Drigg. The second category is called Low Active/High volume and is mainly made up of very low level activity but high volume of contaminated soil. The Dounreay site does have the ability for storing this waste for a short amount of time but due to the decommissioning operations it is anticipated that this waste will generated in large amounts in the near future. Therefore UKAEA will have to either construct a new low level waste operations facility or convert an existing building in 2005 for interim storage. Dounreay conducted a Best Practicable Environmental Options (BPEO) study for the long term management of both the low active/high volume waste and LLW. This study was subject to a public consultation exercise and UKAEA anticipate that the outcome of this study will be announced in February. Ev 6 Scottish Affairs Committee: Evidence
ILW UKAEA’s approach to dealing with ILW is to ensure that all ILW is packaged in a passively safe form in accordance with Nirex requirements, or where there is adequate justification, packaged in an intermediate form suitable for interim storage such that is does not compromise future disposal requirements. All ILW is stored in controlled conditions, which prevents deterioration of the containers and ensures that packages remain in a transportable state for a period consistent with approved NDA planning assumptions. This storage is on an interim basis until a national UK radioactive waste disposal facility becomes available. UKAEA does not have a view on what the long term solution for managing the UK’s radioactive waste should be. These issues are the responsibility of the Committee of Radioactive Waste Management (CoRWM). UKAEA does recognise the urgent national need for a solution and is happy to support CoRWM in its eVorts to reach a publicly acceptable solution.
(iii) How can the Shortfall in Energy Output be Met Once Nuclear Power no Longer Provides Scotland’s Energy Needs? UKAEA’s remit today is to decommission and clean-up sites formerly used to research and develop nuclear fission, and to host UK’s contribution to the international research and development of nuclear fusion. Fusing atoms to reproduce the energy that powers the sun and stars oVers a safe and environmentally benign alternative to fossil fuels. Recognising the need for new long-term sources of electricity, the UK Government supports the fast track development of fusion, which could lead to full-scale power generation within 30 years. This work is carried out by UKAEA at Culham in England. 18 January 2005
Witnesses: Mr Norman Harrison, Director, Mr Sandy McWhirter, Head of Programmes, Mr Marc Murray, Technical Assistant to the Director, UKAEA Dounreay; Dr Beth Taylor, Head of Corporate Communication, UKAEA, examined.
Q1 Chairman: Good afternoon. I am sorry to have programme. Decommissioning a site like Dounreay kept you; we had a division at four and we had to is a complex and technically challenging task, and wait then to see if there was a second one. Mr we have a dedicated and highly skilled workforce in Harrison, could I welcome you and your colleagues Caithness to do that. I am very pleased—and to the first public evidence session on our inquiry Madam Chairman made reference—that some into meeting Scotland’s future energy needs, which members of the Committee have had the has arisen in part from the useful and informative opportunity to see for themselves the work that is visit we paid to Dounreay in November last year. going on there, and I thank you for your comments For the record could I invite you to introduce your about that. As a small aside I would be very pleased team to the Committee. to welcome those of you who were not able to come Mr Harrison: Yes, indeed. Thank you very much, on that occasion to visit the site at Dounreay, clearly Madam Chairman. I will introduce myself first. My at your convenience, and as another slight challenge name is Norman Harrison, and I am the Director of try and avoid Januaries—the wind and the snow the Dounreay Division of the United Kingdom makes life a little diYcult for travellers. At Dounreay Atomic Energy Authority. If I can introduce my we have a 30-year programme of work ahead of us, team—Sandy— but completing that programme will mark the end of Mr McWhirter: I am Sandy McWhirter. I am the a major source of employment and economic input Dounreay Programme Manager responsible to for the far north of Scotland. We recognise this as a Norman as Director. real concern to our local community. We live in that Dr Taylor: I am Beth Taylor. I am Head of community, and actually it is a great place to live, Communications for UKAEA. Caithness. We are committed to that community. Mr Murray: I am Marc Murray. I am the Technical We are working with community organisations to Assistant to the Dounreay Director. identify and support developments that will provide opportunities for growth as the decommissioning eVort at Dounreay winds down. We hope very much Q2 Chairman: Before we start the detailed that we can be helpful to the Committee in looking questioning do you have anything you would like to at those aspects of your inquiry and at some of the say by way of an introduction? waste management issues which need to be resolved Mr Harrison: Yes, indeed, Madam Chairman, I for the successful completion of our site restoration have a brief introduction I would like to make, if I programmes. We also hope that the Committee will may. Really the UKAEA today has two main roles. recognise that there are some areas—and the Our main task is the decommissioning, restoration example in my mind is the future electrical and regeneration of our former nuclear sites. In generating mix—where the UKAEA as a company Scotland that is at Dounreay, and in England at does not have a particular role to play and we may Harwell, Winfrith, and Windscale in West Cumbria. not be able in that particular area to contribute a We are also responsible for the UK’s fusion research great deal to your thinking. Thank you. Scottish Affairs Committee: Evidence Ev 7
19 January 2005 Mr Norman Harrison, Mr Sandy McWhirter, Mr Marc Murray and Dr Beth Taylor
Q3 Chairman: Thank you very much, Mr Harrison. previous questions, considerable amounts of In 2000 the Dounreay site restoration plan envisaged taxpayers’ money. In terms of the employment restoration taking 60 years at a cost of £4 billion. position, the actuality is that the bulk of the work to However, in 2004 it was announced that decommission the site, previously on the 2063 decommissioning would be completed by 2036 at a programme and continuing on the 2036 programme, cost of £2.7 billion. These are very diVerent would be to do the bulk of the work in the next 20 forecasts. Why is there such a diVerence? Were the years. The 2063 DSRP programme had a very long original forecasts very wildly inaccurate? Is tail-oV to 2063, while the present programme has a decommissioning more straightforward than you much sharper tail-oV to 2036. So, yes, the rundown first thought, or have your staV simply become more in employment has been accelerated, but the basic proficient in what they actually do in the job? shape of that rundown—ie the rundown after the Mr Harrison: Thank you for the question. Sandy, do next 20 years—is actually the real change in that. In you want to field the question? terms of employment at the site—and I think Mr McWhirter: Yes, certainly. We are not members who had the opportunity to read our comparing like with like. The original submission will have seen the graphic representation decommissioning forecast for the Dounreay site of the rundown—that shows at high level in that took the site from its state in the year 2000 right the form what the rundown is. We employ in round way through to full decommissioning. However, as figures about 1,200 UKAEA staV on the site at you will probably gather in your second question Dounreay, and you can see a rundown of some 200 associated with waste management, there is no long- numbers over the next four or five years, with then a term strategy for the long-term management of stable plateau of employment, and after that a intermediate-level waste, so the plan that we continuing rundown. We employ, in round figures published this year is an interim state for the again, about 1,500 long-term contractors on the site, Dounreay site where the intermediate-level wastes and the rundown of contract labour will follow a arising from the decommissioning would be stored very similar profile. on the site pending the availability of such a national strategy. That was the first thing. The second thing is no, I do not think decommissioning has become any Q5 Ann McKechin: You are still taking on easier; and, yes, we have got an awful lot better at apprentices at Dounreay—we saw that when we doing it. What we have done is found better and were on the site. Are you finding that young people more cost-eVective ways of carrying out the are less enthusiastic about starting apprenticeships decommissioning, and what that has enabled us to or their careers at Dounreay because of the fact that do is to bring scope forward into the earlier years. perhaps in 20 years’ time there is not going to be that The eVect of that is to reduce the cost and reduce the facility there? timescale for decommissioning individual facilities, Mr Harrison: I have not seen any reduction in and a very large percentage of that significant saving enthusiasm; in fact a continuing level of enthusiasm; that we have made is associated with what we call and in no way as a trite response, there are not many hotel costs, because as long as it exists, it needs to be industries that can predict continuation of maintained, it needs to be kept wind- and weather- employment for the next 20 years. Because of the tight, and in some cases it requires security cover. geographic issues and the relative remoteness of Whenever you have knocked it down, it does not Caithness and Sutherland I have to make sure that need that. So it is one of these situations where more that is not a trite comment, because in other areas gains you more. there are other industries to redeploy the skilled Chairman: In the light of that could we look at future workforce. We have made an absolute commitment job prospects. Ann McKechin. to recruitment of apprentices and a continuing recruitment process with graduates, and that, I think, for the length of time, firstly, that we need to Q4 Ann McKechin: Mr Harrison, we were decommission Dounreay and the level of skills, commenting about the fact that the actual timescale which is a very challenging and skilful process, that has now dropped by almost 30 years, and in the is the appropriate thing to do. That probably leads original timescale of 2063 even your youngest us in to other areas and perhaps other questions to apprentice would have had a job for life, whereas come yet, how we might contribute to the skill base now nobody under the age of 30 can be confident in Caithness and North Sutherland post-Dounreay. about their future job prospects. I just wonder if you I do not know if my colleagues want to add any more might like to comment about the job implications. to that. Mr Harrison: Yes, thank you. The reality of the Mr McWhirter: I think I would do. The point work that we are carrying out at Dounreay is to about apprentices is a very, very important one to decommission the complex reactors and research us. The craft apprentices that we take on—about facilities at Dounreay and then demolish the five per annum—are serving recognised craft associated buildings; so by definition we are not apprenticeships which are recognised by the looking at an ongoing business. In terms of value to respective trade unions across the country, so the the taxpayer and—I will come on to it later—the skills that these youngsters are developing are not in skills that we are employing of staV there, the drive any way specific to Dounreay. They are mechanics, for the site restoration at Dounreay is to look to they are electricians, they are mechanical fitters, and accelerate that programme, enhancing the skills of those skills are applicable anywhere. Just to support our staV as we do that, and saving, as from the entirely what Norman says, I do not actually Ev 8 Scottish Affairs Committee: Evidence
19 January 2005 Mr Norman Harrison, Mr Sandy McWhirter, Mr Marc Murray and Dr Beth Taylor remember the numbers, but I was responsible for when you have that body of experience which some of the recruitment of the apprentices in the last nobody else will have to the same degree, to sell that couple of years, and one of the major challenges we to other parts of the world and other parts of the had was reducing the applicant list to a sensible size. country, albeit you could still be doing it from So there has been no diminution of interest in taking Caithness? these positions up. Mr Harrison: Sandy—again I am relying on your information there. Q6 Ann McKechin: In the memorandum obviously Mr McWhirter: I think it is worthwhile pointing out you point out just how vital Dounreay is to the that between the 1950s and the 1990s Dounreay was economy of Caithness, but you also point out that where it was happening in the nuclear industry. It you are not the only major employer in the area. For was at that time the cutting edge of nuclear the benefit of the Committee could you just remind technology. Anyone who was in research and us what other types of employment are currently development in the nuclear industry wanted to be available in the area, apart from the site. associated with that project; it led the world. Where Mr Harrison: There is a manufacturing company, is Dounreay today? Dounreay is at the cutting edge Norfrost, who are based in one of the smaller of nuclear technology; it is back where it always was. V satellite towns away from Thurso, and—somebody The only thing that is significantly di erent is the correct me—they manufacture refrigeration units, nature of nuclear research at the moment. It is now and they employ of the order of 350 people. There is in the decommissioning mode, and as you rightly a specialist battery factory based in Thurso which point out—I would not be so immodest as to suggest employs of the order of 200 people; there is a call that we are leading the world, but we are certainly up centre managed by British Telecom, once again of there with the best, and that has attracted a the order of 100 people. Beyond that we have a tremendous amount of interest globally. number of engineering contract firms which are not Mr Murray: Can I just say a couple of things on that. exclusively but heavily reliant upon Dounreay, and We are working very heavily with the Caithness and give it a tremendous service, actually. We are talking Sutherland Enterprise—CASE—to help Caithness I think of low hundreds in terms of employment— become a centre of excellence for decommissioning, Sandy? and we have undertaken a number of key initiatives Mr McWhirter: You are right. to try and boost that image. We became the anchor Mr Harrison: The rest of employment is dispersed in tenant with the Forss Science & Technology Park, agricultural and small business units. which is a £6 million investment in the private sector. Mr McWhirter: I think it is perhaps worthwhile We have structured our tendering process to help pointing out the adjacent nuclear facility at Vulcan, allow local companies to compete with international which is the Royal Navy’s reactor test establishment firms on Dounreay decommissioning contracts to to support its submarine fleet, which is quite a allow them to gain that experience and bid elsewhere significant employer, and the nearest thing there is to internationally. There is one contractor, for Dounreay-type of employment. example, a local company, JGC—which forms part Dr Taylor: I did just want to mention—again it is of an alliance who are bidding with an international relatively small numbers, but to me it seems like consortium in America to decommission some something that could be the kicking-oV point for a American facilities. We have also been heavily diVerent sort of employment—that we actually have involved in the success of the test and trials facility our pensions oYce, which supports not just current at Janetstown, which was a catalyst for a £7 million UKAEA pensioners but about 40,000 people investment from Caithness and Sutherland altogether who have previously been associated with Enterprise, and we are actively promoting nuclear UKAEA. That is based in Thurso. It has a fantastic decommissioning opportunities to businesses record as a pensions deliverer. It did get the go- throughout Scotland, with DTI, the Highlands & ahead under the Energy Act last year to bid for, for Islands Enterprise and Scottish Enterprise, to example, the NDA pension and other public service exploit the synergy of skills between nuclear, oil and pensions, and we would love it if that was an gas and the renewables industry sector, alongside the opportunity of diversifying the kind of employment nuclear sector. available. Mr Harrison: One of the points where I would add to that, and it in many ways may sound slightly contradictory, in as much as our endeavours to Q7 Mr Carmichael: I am interested in this question accelerate the timescales and reduce the costs of the of what happens when you get to the stage further decommissioning eVort required at Dounreay, is down the line. If I can maybe just explain the way my that it actually enhances the marketability of our mind is working, we are told in the North Sea, for workforce in terms of the clear high profile for the V example, in the o shore oil and gas industry, that we skills that they are employing, and makes them a far have now a critical mass of expertise in the North- more marketable entity. East, but even when there is not the same level of exploration and production in the North Sea you will have a base there of expertise that is exportable. Q8 Mr Carmichael: So the future for Dounreay is The work that you are doing at Dounreay really is exporting expertise rather than importing waste? leading the world, I suppose, in many ways. You are Mr Harrison: That is a good question. Exporting the first to do it. Is there going to be the same expertise, making use of the expertise, exporting it as opportunity for yourselves and for other contractors opportunities would arise. In terms of your question Scottish Affairs Committee: Evidence Ev 9
19 January 2005 Mr Norman Harrison, Mr Sandy McWhirter, Mr Marc Murray and Dr Beth Taylor of importing waste, that issue sits around the Sutherland Enterprise. The kinds of areas that we deliberations of the Committee for Radioactive would hope to be able to work in as a company post- Waste Management. 1 April would obviously be in managing our existing Dr Taylor: I think it is probably just worth saying, site. There is also work that I think Marc alluded to, though, there is absolutely no intention of importing in using our decommissioning skills in non-nuclear waste into Dounreay. decommissioning—petrochemicals is a good example, where many of the skills are very similar. Of course those initiatives can be carried out in Q9 John Robertson: Mr Harrison, in your Caithness and Sutherland, in Scotland, in the UK submission you stated that “As required by its and indeed elsewhere. So that perhaps, I hope, gives forthcoming contract with the NDA in April, you some idea of the scope of the initiatives that we UKAEA is currently working on the development of are looking at in an eVort to replace the work at V a Dounreay socio-economic plan to assess the e ect Dounreay. of its newly accelerated decommissioning strategy”. However, you are involved already in a number of socio-economic initiatives, some in support of the Q10 John Robertson: That is quite interesting, but I Caithness and Sutherland Enterprise. Could you am interested more in the kind of work you are doing summarise the eVorts UKAEA are making in with the Caithness and Sutherland Enterprise and helping alleviate what will be a major problem? the Highlands and Islands Enterprise, because you Mr Harrison: I am good at passing this around. have already cut back the amount of time you are Sandy again, please. going to take to decommission, as we have already Mr McWhirter: It is a requirement under the Energy said earlier, and my fear is that because these Act that the Nuclear Decommissioning Authority businesses locally are thinking “I’ve got 30 years’ should give appropriate heed to socio-economic worth of work” they are not looking at it with any impacts of its operations, and the NDA has in turn kind of urgency. What are you doing to make sure quite rightly required the incumbent licence holders that everybody in the areas knows that, while it –in our case UKAEA—to come forward with might be 30 years today, it might be 20 years annual socio-economic plans. We are quite tomorrow? fortunate at Dounreay because we were already very Mr McWhirter: That is a very good question. I proactive in this area, and indeed we commissioned would have to say that UKAEA has only recently the production of our socio-economic baseline, embarked upon this kind of endeavour. In the past which was published in June 2004, and that looked they have been the nuclear operator or research forward to the economic prospects as then perceived and development establishment, and nuclear to the year 2016, so we have already carried out that decommissioning establishment. It is only very baseline work proactively before the Energy Bill was recently that we have had a requirement to go even passed. So that baseline is available. The through the socio-economic planning cycle. UKAEA is a non-departmental public body, and we Nonetheless, as a responsible employer we have are eVectively owned, as you will probably be aware, been trying to minimise the impacts of our by the shareholder executive. We have plans that we operations over the years. I actually have a meeting are producing at the moment for the structure and with the chief executive of Caithness and Sutherland business arrangements for the UKAEA post-1 Enterprise on Friday to begin this process, because April, and those plans have been exposed to our it is very new, and I would not wish to deceive you shareholder executive, and they are under into thinking that we are significantly advanced in consideration, so some of the business plan our thinking. This is the first year of the plan, and we initiatives that we have are yet to be approved, and are going at it in a responsible, measured way. Our indeed some of them have not yet been seen by the view is that we would be better to ask Caithness and shareholder executive, so it would clearly would be Sutherland Enterprise how we might best work, inappropriate for me to make any formal rather than to proactively do it ourselves. commitment. However, I think it might be an idea to Mr Harrison: There is another point, and it is more give you some idea of the kinds of things we are of a general point. I think the stimulus of our looking looking at. There is Professor John Fyfe, who is a at accelerating the decommissioning programme, renowned expert in dealing with communities that reducing the costs, it has been, for organisations like have been adversely impacted upon by the closure of the Caithness and Sutherland Enterprise, an local industries, and specifically the coal industry. enormous wake-up call. That is not a derogatory We have engaged his services in support of the comment about them, it is a stimulus to say we have eVorts of the Caithness and Sutherland Enterprise raised the profile of this issue; the timescales are still and Highlands and Islands Enterprise to help them on our side to look and develop ongoing in that area. Our position is not quite as dire as the employment in the area—so that is my overview take situation that John Fyfe has walked down in the on it. It is an alert call to the whole area. past. Most of these industries are given notice of probably a year or even less of the closure of the Q11 John Robertson: It is a very good point, and it major employer in the area. In the case of UKAEA, is well made, and hopefully you will look at these instead of having a cliV edge of a year, we have a things, but will you keep the Select Committee gradual rundown over a period of about 30 years, so informed of any work that you do? it is a bit less challenging. Nonetheless, Professor Mr Harrison: Yes, absolutely. Fyfe will be supporting the Caithness and Chairman: Thank you very much. Ev 10 Scottish Affairs Committee: Evidence
19 January 2005 Mr Norman Harrison, Mr Sandy McWhirter, Mr Marc Murray and Dr Beth Taylor
Q12 Mr Weir: Just to follow up on that, you mention has existed with UKAEA until fairly recently, and in your submission that it is expected that that is going to impact on how you look at things for competition will be introduced for the management the future? of the Dounreay site in the next five years. Given that Mr McWhirter: I do not actually think that is likely decommissioning is by its very nature a long-term to be to much of a problem. I would respond in the thing, can you tell us first of all what the eVects of the following way. A very significant proportion of the contract with the NDA coming into eVect on 1 April money that we spend at Dounreay is spent with are likely to be, and also the opening up of contractors, and many of the jobs that we will be competition; and if there is a contract for the kicking oV during the currency of what we expect to management of the site within the next five years, be our contract duration will themselves last for how long is that contract liable to be? Is whoever gets many years—major construction jobs such as a new the contract likely to be there for the full spate of the waste management and treatment facility, which will 30-year decommissioning programme or are we take several years. So those jobs, once the UKAEA going to have a series of operators and lack of on behalf of the NDA has contractually committed, continuity in this programme? will go ahead. The second thing—and this is subject Mr Harrison: That is a very interesting question. Do to ongoing discussion and structuring of the you want to go first, Beth? organisations—there will be a site licensee company Dr Taylor: I do not think I am going to be terribly which will be responsible for the safe operation of helpful on this, because I think the answer is that we the site, and that company we would expect to have a do not know, and we wish we did. In a way this is all degree of constancy throughout the programme that to be determined by the NDA, which is only just in Norman has referred to, irrespective of who wins the the process really of forming itself at the moment. managing contract. So the number of people who Certainly there are negotiations going on at the would be likely to be impacted upon by a change in moment for the length of the first contract, and top management would be relatively small. although I do not think anyone has signed and Chairman: Thank you very much. Alistair? sealed on the dotted line, we are looking at just a few short years, basically, for that contract. After that I Q15 Mr Carmichael: You can hardly be happy think we would only be guessing, if we talked about about a situation where you have a contract starting contracts. on 1 April, and you do not know yet what the terms of it are going to be. Q13 Mr Weir: Is it fair to say that the uncertainty Mr Harrison: For the first contract—and the about the length of contract is obviously going to contract has been referred to the “dowry” feed into any plans you have with Caithness and contract—although we do not have an absolutely Sutherland Enterprise for future projects? You are clear picture, our understanding is that it will be a going to be looking at the relatively short time span high probability of being a two year contract with of the contract you have, rather than over a 30- the option on a performance basis to extend for a year period. further year. So the high probability is that it is going Mr Harrison: I think there are a number of parts to to be two-plus-one years for the first contract— that response. Dounreay this year will be celebrating which will be allocated to ourselves as the present its 50th year of being, and that represents enormous incumbent of the site. continuity for the UKAEA in terms of its relationship with the community in Caithness and Q16 Mr Carmichael: But ten weeks out from the North Sutherland. The next part that has occurred starting date of that contract you still do not know to me—I would say this, wouldn’t I?—I have every that for certain. intent that the UKAEA will continue long term in Mr Harrison: The contract is not signed, that is why that relationship. That leads back then to a question I am not saying— about length of contract and future competition, and certainly what we as a company are doing, we are gearing up and looking very closely—and the Q17 Mr Carmichael: Forgive me—“contract” also gearing up is reflected in accelerating the suggests an agreement. If something as basic as this programme, the reducing of costs, some of our is not yet confirmed, your view seems to be to take it breakthrough thinking that we are carrying out as a or leave it. company. I think that reflects our determination to Dr Taylor: We do know for certain that we will be continue and prove our worth both at Dounreay and the people who hold this contract; that has always at other sites and, if you like, in layman’s terms, do been clear from day one. We do have an agreed work the best possible job we can in selling our plan for the first year, and to a lesser degree of competence and commitment to the NDA, with the definition for the second year as well, so I do not real intent that we will see out that decommissioning think there will be a kind of vacuum on 1 April; but programme right to the closure point of the it is certainly true that the final details are still up programme. for grabs.
Q14 Mr Weir: Do you not accept that by nature, if Q18 Mr Sarwar: How successful have you been in you are working a short-term contract—there is a finding alternative employment for your current fundamental diVerence with the NDA and a short- workers in the Caithness area and other parts of term contract than there is in a state monopoly, as Scotland? Scottish Affairs Committee: Evidence Ev 11
19 January 2005 Mr Norman Harrison, Mr Sandy McWhirter, Mr Marc Murray and Dr Beth Taylor
Mr Harrison: I was just mentally moving around the to take on consultancy work there. With these high question, because certainly our immediate bandwidth communications there is no need, or less workforce is fully committed to the need, for the staV to actually go to the customer; decommissioning eVort at Dounreay. I was just consultancy is something that can be delivered over thinking whether—Beth? fibreoptic links. So it is not exactly the same thing, Dr Taylor: It is not really other parts of Scotland. I but not without precedent. wonder if we could talk about other parts of England, because we do have these two southern Q20 Mr Sarwar: Presumably most of your sites—Harwell, and Winfrith in Dorset—which are employees live in Thurso, which is too far away from much more advanced in the decommissioning any major centre of employment? Once Dounreay is process, so the number of people who work for us decommissioned, of course these people will move now at those sites is trivial compared to what it used away to find jobs in other parts of Scotland and the to be when we were a big research organisation. We United Kingdom. Do you not think that Thurso will have actually been quite successful, I think, in that become little more than a ghost town? as we pulled back the decommissioning work and Mr McWhirter: I think if we did nothing that would cleaned up the site we have been quite successful in certainly be the case, but as I think we have turning these two sites into science and technology demonstrated in the statements we have made on the parks, so we are now back up to about two-thirds the socio-economic development plan, we plan to work same number of people who were employed by us at with both the local enterprise agencies to ensure that the height of our research programme are now that does not happen. working on those sites but they are not working for Mr Harrison: I do not think this is a direct answer to us; they are working for new companies like your question, but painting the picture of a society QinetiQ, like Regenysis, I think it is called, who have in Caithness and North Sutherland, there is a culture come on to our sites to use the facilities that are that a number of people work on the oil and gas rig available to use, the land that is available. That has industry, and they are itinerant, working away from been a real success story. We know it is going to be home and then returning home for fixed periods. much more challenging in Dounreay for all sorts of That in my mind is not an ideal situation for any area reasons, but to me that just says it is possible to have of society, but it does reflect the flexibility and life after a nuclear site. tenacity and the skills of the population there to take on additional work and take it on an itinerant nature Q19 Mr Sarwar: Do you have any plans for the if necessary. That does not answer your question, people who are going to lose jobs, how to find jobs but it is just painting a bit more of the picture. for them? Mr Harrison: Certainly within the developing Q21 Mr Sarwar: When members of this Committee business plan of the UKAEA we have real visited Dounreay they were told that the famous fast aspirations to take on new business, and we would reactor sphere would not be dismantled but look within our existing skill base for redeploying retained, possibly as a science exhibition or staV from both Dounreay and our southern division education centre. Is this still the intention? If so, how sites. That is still in the future, and the plan is still in many jobs do you think such a centre might provide? a fluid development. Dr Taylor: I would just like to just mention the Mr McWhirter: Can I just support that a little bit Caithness Horizons project, which is linked to this, too. What Norman says is obviously right. The and this is where we decided about two or three years situation we find ourselves in is not without ago that rather than invest money in refurbishing precedent, although it is a little bit diVerent. Some our rather elderly visitor centre next door to the site years ago a whole section of the UKAEA workforce we would put money into a partnership with the was devolved into what was then AEA Technology, town council and the Heritage Society, and we hope and that was very successfully floated oV, there are other people like Scottish Natural Heritage demonstrating that there are skills available in these that will join us eventually, but we are the core three nuclear establishments that have market interest. partners, to refurbish Thurso town hall and create Indeed, the battery factory that Norman referred to there a real high quality visitor centre, which is about there is a success, principally because of technology a lot more than Dounreay but would include the that was developed by these people who were Dounreay story, that hopefully could be the start of employed at Dounreay and at our southern sites; so building more on the tourist potential of Caithness. there are certainly precedents there. The last thing I Lots of people will tell you that Caithness has just as would say on this subject is we are blessed in many natural and archaeological attractions as Caithness by the existence of a tremendous Orkney, and yet if you look at what the Orcadians communications infrastructure. I do not mean roads have managed to do compared with what Caithness and rails when I say that; I mean computer has done, then they are owed a huge compliment. It communications. Much to my chagrin at the time a would be so lovely if—it needs more than just this hole was dug all the way up the A9, and into that has project, but we do hope that this project could be a been put a very large number of high bandwidth kicking-oV point for a tourist industry in Caithness. fibreoptic cables. One of the characteristics of the Mr Harrison: It is actually a great compliment to workforce that you will see on page five of our Orkney, the way they have organised the tourist submission is that a high percentage of them are attractions, but this is not point scoring; there are professional staV, so there is clearly the opportunity more archaeological sites in Caithness than any Ev 12 Scottish Affairs Committee: Evidence
19 January 2005 Mr Norman Harrison, Mr Sandy McWhirter, Mr Marc Murray and Dr Beth Taylor other county in the UK, it is just that a lot of them were never, ever designed to be decommissioned. We are not terribly accessible, and this is certainly not a now know how diYcult it is to know what the tricks developed tourist industry. of the trade are. The number of times that people say Chairman: I am sure Alistair Carmichael is not going “Gosh, if only they had!”—and we know now what to bite— they ought to do. My view is that if the UKAEA has Mr Carmichael: You will bear in mind the any role whatsoever to play in the renaissance of importance of quality as opposed to quantity. nuclear power it would be to feed in the expertise Chairman: I was wrong. He did bite. Did you want that we are now gaining in decommissioning in order to come back on this, Ann McKechin? to have a solution for the design of the new build. Chairman: Can we move on now and look at the management of radioactive waste. David Hamilton? Q22 Ann McKechin: Yes. Since we have asked for evidence we have actually had quite a large number of submissions that have come in from the Caithness Q23 David Hamilton: Chair, I am not going to area, including the Dounreay Action Group1, and continue the debate about nuclear energy, because they perhaps seem to be a little more sceptical about that would take us to the $20,000 question—or I the proposals for alternative employment and should have said the $20 billion question—so I am economic development. A number of them, their not going down that road. In your paper you argument is that there is an argument for Dounreay indicate three types of radioactive waste produced at to be established as a fully serviced and licensed Dounreay: exempt, low level, intermediate level. nuclear site and for a new nuclear energy site to be Can you explain to us in more detail how low-level created in the UK with Dounreay being foremost and intermediate-level waste are currently being because of the skills and experience which have managed and disposed of? I take the view that the already accumulated over the years. I appreciate vast majority of the public out there, like many of the that obviously you are not responsible in any way politicians, do not distinguish between all the for commissioning of nuclear energy units or for the diVerent parts of nuclear. I think this is a most policy in this regard, but clearly it is a subject of important area, and I would like to get some clarity concern in the local area, and clearly there seems to in relation to that part of it. be perhaps some level of support. I do not know if Mr Harrison: I can go down the areas in turn, really. you want to comment on how you think that is, and When we are talking about low-level waste, certainly whether you would want to have a nuclear energy we are producing—we have in the past and we will be plant on the site, and whether or not that is feasible. as we decommission the site—large volumes of low- Mr Harrison: I think I gave some high-level views level waste. I have some figures here: 33,000 cubic and, as you rightly pointed out, the UKAEA—our metres of low-level waste have been disposed of focus at Dounreay is the environmental restoration historically. The historical disposal route for low- of the site, and our business has no input to the level waste was in the form of pits excavated and debate about future nuclear generation or indeed the constructed on the site, running through the tens of building of one. But as a personal opinion it is years of our disposal of low-level waste on the site. beyond doubt that the skills both to construct and Those pits—there were in fact six in total—are now commission a modern nuclear power plant full, and those pits have now been sealed over. Our undoubtedly exist in Dounreay, and certainly if such next approach, as we produce new volumes of low- a programme were to exist I am sure it would be level waste, is we are looking to establish an seriously considered. I emphasise that that is a approved route to transfer volumes of that low-level personal view. I do not know whether my colleagues waste to the repository at Drigg in West Cumbria, as want to add anything to that? one route for disposal of waste. Secondly, we are Mr McWhirter: I think we all have very personal entering into and progressing through a process— views, and there is a theory that says if you lock ten more initials, I am afraid—BPEO—the best nuclear engineers in a room for more than four practicable environmental option—for disposal of hours you will end up with ten separate reactor low-level waste. One of the significant options that systems being designed, and they will all be diVerent, we are considering is on the site of Dounreay, for and they will be diVerent to anything else that has disposal of Dounreay low-level waste, we are ever been invented. I think we have to look at the looking to establish a further repository where it can Dounreay site and see what it is. It never was a be stored in what would be potentially a retrievable nuclear power station. Some of the infrastructure manner. It would be stored in underground storage that is there may well be able to support a nuclear areas, so that is a very high-level view of our programme, but it would need to be modified very approach to low-level waste. One area that is very significantly. What I am perhaps more excited about important in this business that we are in is would be the skill sets that we have in our workforce, environmental restoration—it is a curious business because we are having some diYculty at the that produced waste—and it is very important both moment, as you can probably gather, with the costs environmentally and managerially in terms of the associated with nuclear decommissioning. You may cost that this waste is streamed appropriately. What ask why that is the case, and the answer is very we have at Dounreay and we have expertise simple: that is that the plants that were designed in elsewhere in the company is the expert knowledge on the 1950s and 1960s were designed to operate; they how best to stream this waste. You can appreciate that if a large container of material was categorised 1 Ev 59 as low-level waste, if in fact half of that is exempt Scottish Affairs Committee: Evidence Ev 13
19 January 2005 Mr Norman Harrison, Mr Sandy McWhirter, Mr Marc Murray and Dr Beth Taylor waste which can be disposed of in a normal licensed Q24 David Hamilton: When is that report scheduled manner into normal landfill, the cost of that exempt for next year? When is that report scheduled to be disposal is considerably less as opposed to disposal brought forward? You said 2006. of low-level waste. So it makes damned good Mr Harrison: 2006, yes. environmental sense to put great eVort into the streaming of this waste, and extremely good cost Q25 David Hamilton: The early part of 2006? sense in saving money again for the taxpayer. That Mr Harrison: That is a good question. represents a big managerial eVort for the site to correctly and appropriately produce these waste Q26 David Hamilton: The reason for asking, streams. Beth, do you want to give any more detail Chairman, is that when the nuclear debate is taking on the LLW BPEO before I move on to ILW? place this to me is a key element. It is not just about Dr Taylor: Yes, if this is of interest. It is one thing whether they build power stations or whatever; it is which we were very proud of, actually, that we went about how they dispose. If you answered that through this. The point of this Best Practical question, that is why the report I think is very Environmental Options process is really to compare important, and that question deserves to be brought apples and pears, as I understand it: you have to back—that would actually assist many politicians. balance costs and things like transport against any Mr Harrison: I think we can come back to you with impact on the environment or the volume of waste the exact date of that. you produce, and the only way to do that is to weigh Dr Taylor: It is an issue for CoRWM, actually, and all these diVerent impacts according to how people I do not know whether you are taking evidence from feel about them. So although Norman and his them as well; but we could certainly come back with 2 experts I trust to tell me what those impacts are, we more information. or they do not have any better handle on what the Chairman: Do you want to come in on this, Mike? best balance between the diVerent attributes might be, so it is really important to get people, get the Q27 Mr Weir: You were saying that they will be public, involved in that, really. We did go through a reporting next year, but as I take it at the moment process with the low-level waste BPEO where we had there is no long-term strategy for getting rid of a number of diVerent panels of stakeholders who all intermediate-level waste. One of the things when we sat down, took a day, went through this, evaluated visited Dounreay that concerned us was evidence of where they felt the right balance ought to be, and we what had been chucked in the shaft, if I can put it then wrote this up and put it out into the public that way, over the years, and leakage of domain for comments from other people. For us, intermediate-level radiation, if we understood it correctly, from that shaft. How can you reassure the this is not something we have been used to doing, Committee that irrespective of what CoRWM is and we are quite proud at what we have done with it. going to come up with next year, that the leakages That is the BPEO which we hope will be published, I from the Dounreay shaft will be stopped and there think, next month now. will be no recurrence of that? Mr Harrison: Yes. In the area of ILW in terms of the Mr McWhirter: I hope I have some good news for long-term solution a committee, which you will be you here. The Dounreay shaft contains familiar with—the Committee on Radioactive intermediate-level waste—that is true. The rock in Waste Management (CoRWM)—the long-term the vicinity of the Dounreay shaft is extremely solution sits with them, and they will be making impermeable; water does not flow through the rock. recommendations to ministers next year in 2006. But It does, however, flow through the very thin fissures the issue for myself and my team at Dounreay is that between the Caithness slabs, and that results in a we are producing intermediate-level waste—ILW— very, very small quantity of radioactivity ending up at the site as we decommission. Our job is to get this in the environment. By the time, of course, it reaches ILW waste into a stable form that makes it safe for the environment it is so dilute that it is no longer long-term storage or disposal. A typical example intermediate-level waste, it is low-level waste. would be in a purpose-built stainless steel drum, if it Nonetheless UKAEA recognises that the shaft is an is a liquid-based ILW. We mix it in a chemical inappropriate disposal facility, and before we can process, but essentially mix it with cement and make remove the material that is in there it is necessary to it into a solid mass where it is stable, it is contained stop water getting into the shaft. We have in the past within the drum, and in the right storage facilities, it looked at a number of geological methods to stop is then in a stable manner and can be stored for a water getting in, and we have now fixed on a new long period. Our plans show a small number of technology involving high-pressure grout into the secure stores on the site, designed—it is a sort of civil area, and we have a project underway now, two engineering question this, how long does a concrete years ahead of programme, to inject a grout curtain structure—how long is the integrity worth?—but we around the shaft to prevent it leaking. The eVect of have said we will target 100 years for these ILW that in fact is to remove the principal hazard which waste stores with the sound and reasoned view that is posed by the shaft, which is a hazard to the the recommendations next year from the Committee environment rather than a hazard to anyone in the for Radioactive Waste Management will be such 2 that on a national basis decisions can be made, Note by witness: UKAEA have submitted their socio economic plan to NDA. We expect this plan to be public in structures built, et cetera, et cetera, for the national May/June and will forward a copy to the SAC when solution to the ILW waste. available. Ev 14 Scottish Affairs Committee: Evidence
19 January 2005 Mr Norman Harrison, Mr Sandy McWhirter, Mr Marc Murray and Dr Beth Taylor immediate vicinity. So the answer there is to stop the reasons associated with the fissile material water getting into the shaft, that stops the water movement we do have records that indicate how getting back out, by using technology that is now much we feel is in there and we can infer a whole load available. That actually has a very, very good impact of other stuV. on the environment. At the moment we remove in Mr Murray: Can I just add to that. It demonstrates the order of 20 cubic metres of water per day from the sort of challenge that we have ahead of us that the Dounreay shaft. This is filtered, processed as UKAEA is tackling now in order to appropriate, and discharged to the sea. Once we environmentally restore the nuclear legacy at isolate the shaft from the environment, even that Dounreay. The time when the shaft was filled up, I modest amount of radioactivity will not reach the was not even born. There is an element there that we sea, so the shaft will be rendered relatively benign are restoring the environment, we are using the best until we get the material out of there. technical approaches and techniques in order to do that and we are getting there. We have provided a Q28 Mr Weir: Do you still intend to remove the programme which is funded, which is on an material from the shaft? appropriate timescale and we are doing a very good Mr McWhirter: Yes. job of it.
Q29 Mr Weir: How long is that likely to take? Q32 Chairman: You have now made the rest of us Mr McWhirter: The reference strategy shows a feel very, very old. programme of about seven years, however there are Mr Harrison: Including myself. many unknowns associated with the Dounreay shaft. I think it is important that Members of your Q33 David Hamilton: Can I come back to the Committee should realise how the hazards grouting of the shaft. I am not an engineer, I am an associated with some of these plants change over a ex-miner. The last colliery that I worked in was just period of time. As you rightly pointed out and 3,000 feet deep and they brought a South African observed in your question, the current problem with company in, which was the best in the world, to try the Dounreay shaft is an environmental one. Once to grout to stop water coming into the shaft. That we isolate the shaft from the environment then that was 10 years ago. Over a million pounds was spent problem has gone away. When we start to remove but they could not contain the water, a million the material from the Dounreay shaft, the hazard gallons a day were coming through the shaft. How then moves away from the environment to the confident are you that technology has developed and people who operate the removal equipment and, evolved in that period of time that you can actually more specifically, those who maintain it. We have a stop the water moving through the shaft? duty of care to use the ALARP principle—as low as Mr McWhirter: We are very fortunate because we reasonably practicable—to minimise the radiation are only 65 metres deep. If the shaft was 3,000 metres levels et cetera that people are exposed to by deep we would have similar problems to those in the removing the material and, indeed, maintaining the coal industry, I would think. There are new grouting equipment. We are still trying to get the best possible techniques that involved, in the first instance, equipment, the best possible methodologies, to cementitious grout that is very, very fine and goes remove material from the shaft. The current into the cracks and forms an adequate seal with the thinking is one of bulk removal, maceration and diVerential pressures that would be consistent with then, as Norman pointed out, planting it into a a 65 metre deep excavation. There are also chemical cementitious grout in a stainless steel box. On that techniques that we could employ as well if that was basis, the removal programme should be in the order less than satisfactory. It is important to realise that of seven years. we remove about 20 cubic metres of water from the shaft, nothing like the volumes you would be Q30 Chairman: Thank you very much. I think we removing from a coalmine, and even if it were only saw the start of that when we were at Dounreay. 95% eVective that would reduce the quantity that Mr McWhirter: You would have done, yes. would need to be removed to a miniscule amount.
Q31 Chairman: I think we also heard that nobody Q34 David Hamilton: To allow you to get the quite knew what was down there, that there are no material out of the shaft that you do not require. specific records of what has gone down the shaft, is Mr McWhirter: Yes. that right? Mr McWhirter: That is true. I think we have to Q35 Chairman: Can you perhaps tell us how many remember that the shaft itself was licensed actually instances there have been of radioactive waste and as an intermediate-level waste disposal facility, not a readings that have been found on the beach storage facility. In a disposal facility there is no need adjoining Dounreay or on neighbouring farmland? to keep records, or at least that was the thinking of Mr Harrison: In terms of particles that have been the day, on the basis that you would not ever retrieve found on the adjoining beach at Sandside Bay, it is it. In a library you keep very detailed records of of the order of 50 particles. I will give you an exact where the books are so you can recover them but if figure but it is 50 give or take a couple. Somebody you were to just chuck them in the bin you would not jump in if I am way out. take any notice at all. Yes, there are some levels of Dr Taylor: It is in the 40s but could we send a uncertainty. Having said that, for a variety of other detailed statement after this meeting? Scottish Affairs Committee: Evidence Ev 15
19 January 2005 Mr Norman Harrison, Mr Sandy McWhirter, Mr Marc Murray and Dr Beth Taylor
Chairman: Yes, thank you very much.3 wider surveys. We cannot tell you within a parameter percentage how confident we are where Q36 John Robertson: You have to appreciate that those particles are but we have a very good idea the biggest thing the population has is fear, fear of where they are to the near shore environment and radioactivity, albeit as small as you say it is, that is there are further studies ongoing. We can provide leaking out into the water. Can you tell me how far you with further information on that if you want. 4 away have they detected measurements? Does it stop John Robertson: That would be helpful. at Orkney and Shetland or does it go further to Norway or whatever? Q39 Mr Weir: We have heard these terms bandied Mr Murray: We have undertaken surveys from about of “management of waste”, “disposal of Dunnet Head across to Melvich, just along the waste” and “storage of waste” and there seem to be coast, of the foreshore environments. Basically there conflicting opinions as to what should be done with is a cache of particles just oV the Dounreay coast. waste, whether it should be stored on the surface or You will appreciate that the Pentland Firth between buried in a repository. I wonder if you can address Caithness and Orkney is very, very fast moving and the question of what is the qualitative diVerence essentially if a particle was to move into that it would between storage and disposal. For intermediate- be lost within the environment, it would not be level waste it does seem to me that there is no such detected, it would move into deep water. From an thing really as disposal, it is stored for a long period, environmental point of view, that is probably the presumably in some sort of secured site, it could not best thing that could happen to it because it would just be buried in the ground in a drum and left there. be within deep water and it would never be detected Would it be unfair to summarise UKAEA’s position again and never come into contact with the natural as being to put the waste in a drum, cover it with environment in that sense. In essence, we do believe cement and leave the decision of how to deal with it that there is a cache of particles just oV the coast of ultimately to politicians and civil servants? What is Dounreay within a sandbank. We undertake diver the diVerence between disposal and storage in these surveys every summer in order to try to detect where circumstances? those particles are and try to retrieve them and to Mr McWhirter: That is an interesting question and monitor the movements of the particles by clearing it is one where the general public can easily become areas and then going back and re-surveying those confused. areas. In terms of the quantities of particles the extent is unknown at the moment because it is an Q40 Mr Weir: Not just the general public. historical feature from the site. We do believe that Mr McWhirter: I take your point. The diVerence is the release happened during the 1950s and 1960s. At the statement of intent, that is all. The intent of the moment there is no way of knowing when that storage is that it is something that you put in a place release occurred and how much was there, the with the express intent of removing it to do quantity. Certainly outwith the near shore something else with it at some future date. Disposal environment at Dounreay there have been particles implies that you put it in there with the express intent detected to that extent. of never taking it back out again. There were two options in general that were being considered, but I Q37 John Robertson: Correct me if I am wrong, but believe that CoRWM has widened the portfolio of I am sure I was told that this cache of radioactivity options somewhat. Essentially they came down to that you are talking of is on the move and what deep disposal or above ground managed storage. At started fairly close to the shore has moved out. the moment, pending a decision on the long-term Mr Murray: We are fortunate within the Dounreay strategy, generators of waste, like ourselves, have environment in that there is a central movement had to opt for above ground managed storage until which should keep it within a certain area. If it goes any other decision is made available. The hazard without that area then it is lost within the Pentland itself, as Norman said, is confined, we have stabilised Firth. We have never found any particles outwith it. I would like to pick up on a misinterpretation, and that area. it may be my misinterpretation. We do not put it in a drum and bury it in cement, we take the material Q38 John Robertson: We were told that when you and mix it with cement and put it in the drum. send your divers down to check that your divers are getting further and further out. It is not that the Q41 Mr Weir: We saw that at Dounreay. cache is going away, it is just that it is moving. Mr McWhirter: The diVerence is quite marked, as I Mr Murray: Perhaps what is happening is that we am sure the Committee will appreciate. are extending our diver surveys. What we are trying to do is to develop techniques for remotely operated Q42 Mr Weir: Would you accept the proposition vehicles to go out because there is probably more then, whether you call it disposal or storage, that danger in a diver spending so many hours eVectively these drums will have to be kept in some underneath the water and the danger of a diver being sort of secure repository for a large number of years? killed rather than coming into contact with a Mr McWhirter: Indeed. particle. We are trying to develop a remotely Chairman: Can we move on to how to meet the operated vehicle approach so that we can undertake shortfall in energy output.
3 Not published 4 Not published Ev 16 Scottish Affairs Committee: Evidence
19 January 2005 Mr Norman Harrison, Mr Sandy McWhirter, Mr Marc Murray and Dr Beth Taylor
Q43 Mr Weir: We have heard in the paper by the components of the reactor. Typically you are UKAEA, very interestingly, about nuclear fission looking at cobalt, which is irradiated to a form of so- and nuclear fusion. Presumably one means splitting called Cobalt-60 which decays to half its quantity the atomic nucleus and the other means joining it every six years if you compare that with the fission together, from straight logic. products from a fission reactor which has got 30 Mr Harrison: Indeed. years and compare that with plutonium which has got 24,000 years. Q44 Mr Weir: What is the diVerence? It talks about Mr Harrison: In terms of the availability of a being safer and cleaner. One of the great problems commercial fusion reactor to produce steam and with nuclear fission is the problem of waste, as we drive a turbine and make electricity, I would not have been discussing, the possibility of weapons want to mislead the Committee. We are 30 years grade material and the proliferation of weapons away conservatively and possibly longer. grade material. Does that apply with nuclear fusion? Dr Taylor: I think 30 before you could have a Do the same problems arise? Is there waste reactor. produced? Is there a military application with fusion as well as fission? Q47 Ann McKechin: Apart from your research into Mr Harrison: No. nuclear fusion, are you currently involved in any Dr Taylor: This is one of the key advantages that other initiatives in identifying alternative forms of everybody sees for fusion as opposed to fission. energy to replace nuclear power? Having said that, we do have to recognise that it is Mr Harrison: No, not in the UK. not a developed technology in the way that nuclear power, fission power is. The reason that it might be Q48 John Robertson: If nuclear fusion does not worth developing is because it has got these inherent provide a viable way of generating electricity, what advantages of safety; it genuinely fails safe. As I are your thoughts on how best to replace nuclear understand it, the problem is keeping the plasma power? Would it be through more use of fossil fuels together rather than a problem of controlling the or of renewable forms of energy or something else? reaction as it is with fission. Environmentally, fusion Mr Harrison: We are back in the area of personal is of hydrogen isotopes so the actual product of it is views. Formally the UKAEA does not have a view not radioactive isotopes. Where there is waste but I am very happy to give you my view and I guess produced in the fusion reaction it is just radiation of panel members have their own views equally. I have the material around the reactor but none of that is always been a supporter of a mixed energy policy. these long lived isotopes that give us such a problem There is a balance to be driven somewhere between with what is the eventual waste route. My nuclear, regenerables and coal and gas. My personal understanding is that they are all isotopes that would view is that the balance should be about 20% decay within a period of 50 or 100 years, so there is nuclear, about 40% coal and gas, and the balance of not a huge waste disposal issue as we are currently wind power and potentially wave power. Keeping struggling with on fission. open energy options does not close out any given option. That was a quick re´sume´ of my view and I Q45 Mr Weir: What about the actual fusion? It will invite Marc or the others to give their views. sounds very Star Trek to me and I am struggling to Mr Murray: My own personal opinion is that I have understand all of this. It sounds like Captain Kirk’s got enough work to do in decommissioning without plasma reactor or whatever. considering other forms of energy. That is my sole Dr Taylor: That is it actually. purpose. Chairman: Good answer. Q46 Mr Weir: Is there an inherent explosive danger in fusion as it could be argued there was in fission? Q49 John Robertson: When we were at Dounreay I Is there a weapons element to a fusion reactor in the noticed there was a wind farm nearby. Do they get same way there is to a fission reactor? many problems from environmentalists? You must Mr McWhirter: It is important to understand what have had them over the years, are they getting the the fuels are. The fuel in a fission reactor is either same problems that you had? uranium or plutonium. The fuel in a fusion reactor Mr McWhirter: They do not have any problems with is hydrogen, the stuV that is in water, and there are environmentalists but they have a lot of problems isotopes of hydrogen. There are a number of options from us because the characteristic of the windmills is open that are being explored by our research teams that when the sun gets behind them it sets up a flicker at Culham. The material that goes in there is almost in the oYces in the Forss Business Park which gives limitless in its supply because water is hydrogen and people nausea and headaches so one of them has to oxygen, so there is an almost limitless supply, which be shut down every once in a while when the sun is is one of the other endearing features. The fusion in the wrong place. reaction is the reaction of the sun, that is all it is. Yes, Mr Harrison: As a practical comment from it is true that the hydrogen bomb is the reaction of somebody who looked at this in detail, I lived for a the sun but it starts oV with an atomic bomb in the period of time in East Anglia where there are middle and a fusion reactor does not have one of beautiful, traditional windmills still in working those. As Beth says, it fails safe under all order, and they are very impressive too. In terms of circumstances. There is a very small, modest amount availability, when the wind does not blow a windmill of radioactive material as a result of irradiation of is not available and when the wind blows too hard it Scottish Affairs Committee: Evidence Ev 17
19 January 2005 Mr Norman Harrison, Mr Sandy McWhirter, Mr Marc Murray and Dr Beth Taylor is not available. The reality is an extremely low Q53 Chairman: That concludes our questions to availability and, therefore, extreme high cost of the you. Norman, can I thank you and your team for electricity it produces. your attendance here this afternoon. Before I declare this session closed, do you have anything you wish to say in conclusion? Mr Harrison: Thank you. If I may and I will be brief. Q50 John Robertson: It has been said they should First of all, thank you very much for the opportunity put them up in this place! to contribute. I think we have welcomed the Dr Taylor: You did say we could oVer a personal Committee raising the profile of these issues and opinion. probably loaded with hindsight, perhaps the day after tomorrow, we will realise how much we have enjoyed inputting to it ourselves. I would like to think, and perhaps anticipate, the Committee’s support for the UKAEA, who in turn are supporting Q51 John Robertson: Of course. the NDA, in delivering the responsibilities set out in Dr Taylor: Before we leave it on this note, could I the Energy Bill. Another part is really to restate our just say, and it is because I started my career on Y commitment at Dounreay in our investment in renewables in energy e ciency, I still believe that young people by maintaining our current levels of they could make an enormous contribution so long apprentice training and graduate improvement. as we are not looking for one big answer for That is a commitment from me and my team. The everything. In a way that is the danger of having had UKAEA at Dounreay are fully integrated with the this huge coal generating capacity and then a big local community and, in fact, we are the community. nuclear one, we are always looking for one big We believe we are better placed than anyone to answer that solves everything. You would not get safely decommission the Dounreay site while that with renewables and eYciency but you would go recognising and supporting future employment a long way with a lot of small answers. needs within the communities of Caithness and Mr Harrison: It does not half up the ante in North Sutherland. It is something that I and my Caithness. If you see physically what a 2.5 or three team are totally committed to. Lastly, I would like megawatt wind generator looks like, if you had 60 of to restate my invitation to Committee Members to them built around the back of your property you visit Dounreay. You would be most welcome and we might develop a view on the worthiness of this as a could show you the work that we are carrying out way of producing electricity. It has provoked very there. Thank you very much indeed. strong views in the local community. Q54 Chairman: Can I just put you on the spot before you go and ask was the then government mistaken when it terminated the fast reactor programme? I Q52 Mr Sarwar: Assuming that something other know it is the one you do not want to answer. than nuclear power provides the UK’s electricity in Mr Harrison: I can answer it economically. No, it the future, do you consider that it could be as reliable was not mistaken in an economic sense. and as eYcient as what you have described in your Q55 Chairman: Not economically. In any other paper as “fusing atoms to reproduce the energy that sense? powers the sun and stars” and which “oVers a safe Mr McWhirter: Can I oVer an opinion on that? and environmentally benign alternative to fossil Mr Harrison: Yes, please, it gets me out of that. fuels”? Mr McWhirter: No, it was absolutely spot-on. Mr McWhirter: That is a very good question. It is a Dounreay was never set out to be a nuclear power bit philosophical, if you do not mind me saying so. station. It was set up to demonstrate the feasibility What you are asking me to do is to say that of fast reactor technology and it did that. By 1994 it something that has not yet been postulated could had done pretty much everything that it needed to possibly be more eYcient than something that does do. By that time new reserves of oil and gas, et cetera, not yet exist. Fusion itself does exist as a physical had been found, the cost of gas had fallen and there phenomenon but capturing it and harnessing it in a was no need at that time for fast reactor technology. way to provide reliable electricity is not yet with us. All of the intellectual property rights associated with At the moment it has zero reliability. Would that technology exist, they are here for the nation’s anything that could come up other than nuclear future, and if at some time in the future fast reactor have better reliability, I would guess it must have but technology is necessary it can be brought to bear at the moment, since I do not know what then. technologies we are looking at, it would be very Chairman: Thank you very much. Can I thank you diYcult for me to comment further. very much for your attendance today. Ev 18 Scottish Affairs Committee: Evidence
Tuesday 1 February 2005
Members present:
Mrs Irene Adams, in the Chair
Mr Alistair Carmichael Ann McKechin Mr David Hamilton John Robertson Mr Ian Liddell-Grainger Mr Mohammad Sarwar Mr John Lyons Mr Michael Weir Mr John MacDougall
Letter to the Committee from Scottish Renewables
Scottish AVairs Committee Inquiry into Meeting Scotland’s Future Energy Needs Please find enclosed our views relating to your forthcoming inquiry into “Meeting Scotland’s Future Energy Needs”. Scottish Renewables is Scotland’s leading renewables trade body, representing over 120 organisations involved in the development of renewable energy projects in Scotland. Our membership ranges from community groups and sole traders, up to major Scottish utilities and international plcs. Between them they are active in the development of biomass, hydro, solar, wave, wind and tidal energy projects. Further information about our work and our membership can be found on our website. In considering renewables as part of Scotland’s current and future energy mix we would like to make the following key points: 1. Scotland’s target that 40% of its electricity comes from renewable sources is achievable and should be met through a range of renewables. This will assist in achieving GB renewable targets. 2. The key issue facing Scotland is how to consider the replacement of current conventional generation that will complement the planned 40% renewable target. ie the issue is how to achieve the 60%. The debate is not, therefore, about renewables vs. conventional as both will be needed. 3. If renewable energy in Scotland is to be successful there must be coordination across government departments and with government agencies. Too often our industry must deal with conflicting policies and regulations 4. In considering a future appropriate energy mix, the issue of non-electrical sources is often forgotten. Renewables also has a role in helping to meet Scotland’s future heating and transport energy needs. The following information provides detail on each of these key points.
Renewable Energy Working Alongside Conventional Generation The UK Government has set a target that 10% of its electricity comes from renewable sources by 2010. Beyond this is a 15% target for 2015 and an aspiration that the 2010 target is doubled by 2020. Within Scotland we have higher targets. For 2010 there is an 18% target and a 40% target for 2020. These targets reflect Scotland’s substantial renewable resource and aspirations for associated economic development, and also recognise that Scotland will make a sizeable contribution to GB targets. Currently approximately 14% of Scotland’s electricity comes from renewable sources. The bulk of this is hydro, but wind and landfill gas also make contributions. There are also suYcient wind energy projects now under construction or with planning approval to ensure that Scotland meets the 18% target. Looking at the 2020 target it should be noted that all renewable technologies will need to play their part here. We would envisage that the Scottish target will be met as follows: — ® hydro (ie 10%)1 — ° wind (ie 20%) — ® emerging technologies (ie 20%) % biomass, tidal and wave energy It is worth noting that there is currently a substantial amount of wind energy in the Scottish planning system now. We would not expect all of these projects to come to fruition either because of planning or grid constraints. There have been calls on the Scottish Executive to develop a National Strategic Plan for wind or even to impose a moratorium on project proposals. We would caution against this.
1 While hydro currently provides approx 11% of Scottish electricity needs, we would expect this contribution to fall as rising electricity demand will not be oVset by new generation. Thus while the level of hydro generation will increase over time, its percentage contribution may fall. We have estimated this at 10% for simplicity. Scottish Affairs Committee: Evidence Ev 19
We have called on the Executive to carry out two pieces of work that would provide more certainty for communities, planners and developers in Scotland. Firstly, the Executive needs to provide more clarity on what the 40% target will means in terms of the number of projects constructed (eg in MW) and secondly, better guidance is needed on cumulative impact2 to assist planning authorities with multiple applications for development in a particular locality. To ensure that other renewable technologies can play their part in meeting future energy needs the UK Government— in partnership with the Scottish Executive— needs to ensure the following: (a) marine energy is given a positive financial and planning framework to develop in. This will provide incentive to technology and project developers to move forwards in developing first generation projects. (b) Appropriate support mechanisms for biomass energy are developed, including development of a heating target (see later). It should be noted here that previous UK Government support on biomass has not been usable in Scotland because it has focused on energy crop support instead of support for forestry diversification. (c) Encouragement of micro-generation—including ensuring support in planning and building regulations and providing incentives to electricity supply companies to facilitate cost eVective connection and allow the sale of electricity from household or small business sources. The current system frustrates connection of micro-generation through being costly and bureaucratic. It is also worth noting that there is much discussion about the need for grid upgrades and new infrastructure as a result of new renewable energy proposals. New generation of any kind does need new infrastructure. However, it is worth noting that the priority development is the proposed Beauly—Denny upgrade. This will provide new capacity for new generation but it will also provide more security of supply for electricity customers in the Inverness area. New grid lines will also help to release the potential for projects in the Scottish islands where renewable energy—be it wind, wave or tidal—provides opportunities for economic development and stability for these Scottish communities. Upgrade plans for new infrastructure will also ensure that old infrastructure up to 50 years old is modernised and the costs shared with those wishing to utilise it for generation. Another issue also needing to be considered is the issue of intermittency and the eVect that a high penetration of renewables will have on the whole electricity system. Wind and wave energy are intermittent sources in that the level of generation will rise and fall depending on the strength of the wind/waves. Tidal energy is a predictable but not constant source and varies across the day and seasonally. However, at the levels of penetration of these technologies industry experts express confidence that this intermittency issue can easily be managed. Indeed, such a problem is an insignificant one when compared to the daily challenge of managing the constant rise and fall of electricity demand. The GB System Operator National Grid Transco has stated that: based on recent analysis of the incidence and variation of wind speed we have found that the expected intermittency of wind does not pose such a major problem for stability and we are confident that this can be adequately managed . . .3 Furthermore, the Carbon Trust in its “Renewable Network Impacts Study” of 2004 stated that: “At the current target levels, intermittency is not a significant issue aVecting the development of renewable generation.”4
Replacing Ageing Conventional Generation A key question facing the UK Government is how it plans to replace existing conventional generation with new generation. With renewables set a target of increasing its contribution from 10% to 40% some of this will be replaced. However, there will still need to be some new conventional plant. There has been much play in the media about the choice between renewables and nuclear and how they can help to meet UK climate change obligations. However, it is the Scottish Renewables view that there is no policy choice here, and choosing renewables does not necessarily mean rejecting nuclear. We would reject this argument because renewable energy is worthwhile on its own terms as a viable energy source. Similarly the case against nuclear does not stand or fall because of the strength or weakness of the renewables argument. The wider challenge for Scotland is therefore how to replace existing conventional generation. Put simply there needs to be a debate on what a future 60% of conventional generation will look like.
2 Cumulative impact primarily aVects wind energy proposals but can be applied to a mix of technologies or development types in a particular locality. 3 National Grid UK, 2004. Seven Year Statement. www.nationalgrid.com/uk. 4 Carbon Trust, 2004, The Carbon Trust and DTI Renewables Network Study. Ev 20 Scottish Affairs Committee: Evidence
Scottish Renewables would therefore urge the Inquiry to help move the debate forwards: it should not be about the 40% vs 60% but how best to provide for a future 60% of Scotland’s electricity needs. New build and replacement will be needed here. As with renewables, we see that conventional generation works best when there is a mix, because this means that the strengths and weaknesses of each technology can be balanced. As for the interplay between conventional and renewable and generation and demand we would note the importance of a mixture to ensure that stability of supply is maintained. Key here is having future thermal plant that can be turned up or down to reflect (a) changes in demand, and (b) changes in contribution from more intermittent sources. Clean coal and gas are best placed to provide such thermal plant, but biomass can also play a role. Nuclear energy provides baseload power but cannot be turned up or down easily. However, this fact can be balanced by the continued use of pump storage and demand side management tools such as use of white- goods metering.
Co-ordinating Policy and Regulation
It is noteworthy that a continued frustration of ours is how regulation of the electricity market can often work against achievement of policy objectives in electricity. While there are diVerent roles for policy and regulation, there would seem to be scope for a degree of rationalisation. Our key concern is the implementation of the British Electricity Trading and Transmission Arrangements that will see the Scottish electricity market and the English-Welsh market merge. While this will provide a larger market for generation, the current system will retain a number of regulatory diVerences. For example, transmission will be classified diVerently in Scotland, so more renewable generators will be exposed to transmission charges than in England and Wales. Also the level of charges in Scotland is substantially higher.
We estimate that of the total £290 million charging bill payable by generators, £140 million will be met by Scottish generation, despite making up only 13% of total GB generation. This means that the average Scottish charge is six times higher than the average English-Welsh charge. Such a result penalises all forms of generation and ignores the fact that the development opportunity is often greater (primarily due to better resources or more site locations).
Considering Energy—Not Just Electricity
Electricity use makes up approximately 20% of our total energy use. Heating makes up approximately 40% and transport fuel approximately 40%. Given concerns about future costs of gas as we become more dependent on imports, alongside concerns about oil price rises, it would therefore make sense to consider likely impacts of these changes on the cost of future heating and transport needs, and whether there will be an economic impact to Scotland because of this.
Renewable energy can provide energy for heating and transport. For example biomass and solar energy can help provide heating energy (biomass works best in combined heat and power applications where heat and electricity are generated). Biofuels and wastes can be used to make bio-ethanol and bio-diesel to mix with or replace petrol or diesel. Longer term renewable electricity projects could be used to aid hydrogen production for use in fuel cells.
Thus while most of the policy debate is focused on electricity needs, we are fast approaching the time when long-term changes will be required in how we meet heating needs. Consideration of meeting energy for future transport needs is not too far behind this. We would therefore urge your Inquiry to consider in more detail how these issues should be be considered and resolved by the UK Government.
I hope that the above information is of assistance to you in your inquiry. If you would like further information, or would wish us to present our views to the Inquiry itself, we would welcome the chance to assist you further. Maf Smith Chief Executive 17 January 2005 Scottish Affairs Committee: Evidence Ev 21
Witnesses: Mr Maf Smith, Chief Executive of Scottish Renewables Forum, Mr Niall Crabb, Director, Scottish Coal, Mr Jimmy Ferguson, Managing Director, Wavegen, and Mr Alan Mortimer, Head of Renewables Policy, ScottishPower, examined.
Q56 Chairman: Mr Smith, could I welcome you and building at Black Law, which is now under your colleagues to the public evidence session in our construction. We are also involved in other inquiry into “Meeting Scotland’s Future Energy renewables. We are currently co-firing wood at our Needs”? Before we start the detailed questioning, two coal-fired plants, Longannet and Cockcenzie, Mr Smith, is there anything you would like to say by and investigating the potential for marine energy in way of introduction? particular, working with OPD on wave power, OPD Mr Smith: May I just underline a few of the key being one of the leading technology developers in the points from our written submission to you and that field. We are very active in renewables. might be helpful to start the discussion and perhaps trigger a few questions in your own minds. The first point is that within Scotland we have a target of 40% Q58 Mr Hamilton: Before I ask a question, it may be given by the Scottish Executive, which is what it sees appropriate for me to indicate that I am a member it can do to achieve the GB targets. We see that as of the National Union of Mineworkers, and I still being achievable, if it is met, from a range of sources pay my union dues. I do not get anything back in and it is very important for Britain as a whole that return, but it might be appropriate to say that. I was Scotland is allowed to go forward. However, there is in the pits 20 years ago. Could I ask the an issue that faces Scotland now, and that is about representatives from Scottish Coal and decisions over the conventional generation we rely ScottishPower if they see renewable forms of energy upon within Scotland. We have termed this the 40% as ever replacing fossil fuels? and the 60% question. In deciding, for example, on Mr Mortimer: We see them going some way to where new conventional plant comes, we do not feel replacing fossil fuels. If we follow the current that that has anything to do with the debate on legislation, then certainly we can see a scenario in renewables, which is a separate one. Renewables Scotland where renewables could be producing as have their strengths and can deliver for Scotland. much as 40% in the longer term towards However, if renewable energy is to continue to be ScottishPower’s requirements and then the successful and to achieve the targets set for it, there requirement for fossil fuel energy will reduce, but we does need to be co-ordination with Government do see a continuing need for fossil fuel burning policy-making in diVerent regions and departments because of its flexibility, which is one of the key and within various government agencies. Ofgem, for issues in determining the amount of renewables example, would be a key one. We would ask the which can be accommodated, so we would not like Committee, finally, that in looking at a future energy that to be ignored. mix, it also considers the issue of non-electable Mr Crabb: At the moment, probably 36 to 38% of technologies, for example, use of renewables for Scotland’s electricity comes from coal. Coal is a meeting future heating and transport needs, and finite resource. In answer to your question: at some these are equally important policy questions that stage in the future, something will have to replace will need to be asked as sources that we rely upon, coal and other fossil fuels. I think our point is that such as oil and gas for example, start to become there is an awful long way to go from where we are more expensive and more scarce into the future. at the moment to where everybody would like us to be at some time in the future. Clearly, coal is extremely important at the moment. What we are Q57 Chairman: Do any of your colleagues have trying to do obviously is to manage that transition anything by way of introduction, perhaps with over whatever is a natural timescale. I think that particular reference to how their own companies and rushing from where we are at the moment and trying industries are meeting the challenge of finding to rely on a certain amount of new technology and renewable alternatives to nuclear power production? all the planning issues that come with that is clearly Mr Mortimer: Briefly, I am Head of Renewables something that needs to be recognised as Policy for ScottishPower, and ScottishPower are problematic. Having said that, there are lots of responsible for generation, transmission, things that can be done with coal and with other distribution and supply of power to over five million fossil fuels, to manage that transition well. Our customers. We are a major UK utility. In the particular company is interested in biomass because generation field, we have coal-fired plant, gas-fired we see biomass as being a major generator of plant, hydro plant at two locations and wind power electricity at some time in the future, but there is at 12 wind farms throughout the UK. Given the virtually none being burnt at the present time in scale of our activities, the Renewables Obligation on Scotland. I think 60% odd of renewables in Europe us is also large and it is a major challenge, which we come from biomass, but we are oV to a fairly slow are facing head-on. start. The advantage of biomass with coal is that you get an immediate reduction of emissions, and this is The Committee suspended from 2.20 pm to 2.39 pm the so-called co-firing. If we start to blend in biomass for a division in the House with coal supplies, as Alan Mortimer has said, which we are doing at the moment—we are actually doing We are a leading developer of wind power; in fact we the first commercial contract in the country of have more in the planning process in the UK than biomass blending with coal—we have all the anywhere else and last year secured permission for advantages of neutralising the existing coal-fired the biggest on-shore wind farm that we will be power stations and getting that immediate reduction Ev 22 Scottish Affairs Committee: Evidence
1 February 2005 Mr Maf Smith, Mr Niall Crabb, Mr Jimmy Ferguson and Mr Alan Mortimer in emissions. There are the employment issues. Our terms of our ability to continue to win coal to go into employees are all in rural communities but “his” power stations and keep the lights on while we fundamentally their skills are in bulk handling, are developing all these new technologies. logistics and blending. That is what goes so perfectly well with coal and biomass; the same skills move us into the next generation of power. In answer to your Q61 Mr McDougall: In central Fife an application is question: yes, I think at some stage it will happen. being made at present for a biomass plant within a Personally, I think there is a long way to go but there papermaking company and yet everything that we are some very exciting things happening in the short propose in terms of meeting the energy needs of term which will catalyse and speed up that transition Scotland seems to be confronted by a wall. If you but in a natural timescale. want to go for wind power you have a problem with planning applications for the windmills that supply the energy. If you want to go for coal, then you have Q59 Mr Hamilton: As a supplementary, Mr problems there, and also if you want to go for the Mortimer, are you at ScottishPower looking at environment, et cetera. If you want to go for biomass technology at the present time and, if so, biomass, then of course you need more lorry loads how far along are you? to bring the product in because it is in greater bulk, Mr Mortimer: Yes, we are looking at biomass and yet there is an identifiable need for biomass in technology and co-firing is our immediate terms of meeting the energy needs of the future in application for it. We are currently undertaking Scotland. It appears that no matter which way we trials at Longannet and are actually burning at go, there will be a public objection in some shape or Cockcenzie following trials, which have been successful, on a longer term basis. At the moment, form but your business cannot plan its way ahead we are using sawdust but we are looking to move on unless you have a clear indication of where Britain to biomass and purpose-grown trees. should be going. How important is it to you in planning your long-term future that there is a clear indication, despite the ups and downs of various Q60 Mr Hamilton: Both of you have referred to opinions on where the energy needs of Scotland planning issues. I know changes are taking place and should be met? it is not within this remit of the UK Parliament. Are Mr Crabb: Clearly, it is all about investment. you not facing an unequal playing field in planning Companies such as my own are trying to invest in issues at the present time for opencast or for our future. As coal declines, we need to put some of expansion of nuclear power stations? Are you that money into new technologies, and so we are getting the same response as another fuel-oriented very keen to be investing in biomass. As Mr organisation that is applying for planning issues? Is McDougall says, it is an associated company, it a fair playing field? Scottish Coal, that is proposing the biomass power Mr Crabb: As I have said, something like 36 to 38% plant at the paper mill. Planning is probably the of Scotland’s electricity is coming from coal. We see greatest single uncertainty in business life these days. coal as being important in Scotland. If you look at I am a planner by background, so you will have to the UK in total, I think about 55–56 million tonnes forgive me if I do lapse into a bit of jargon. The way of coal are being burnt for electricity generation. The forward is with what is known as the development whole of the UK coal industry is producing about plan where the debate takes place at the beginning of 25–26 million tonnes and so any reduction in indigenous supplies of coal will just be replaced by the process. The public become involved when the imports. The figures are: 26 million tonnes of development plan is being drafted. East Ayrshire indigenous and 55 million tonnes for electricity Council, for instance, where we operate, have generation or 60 million including steel. You can see recently revised their structure plan, which is the that if you knock one tonne oV at the bottom that development plan. They have identified the need and will just mean another ship load coming in. We the location for a biomass power plant in their area. would suggest that it is important in the short to That tells people early on that that is what is going medium term to be able to continue to obtain to happen. They are consulted at that stage so that indigenous coal supplies. The coal that is in Scotland when people start coming through with the is bought and paid for; as it were, it belongs to the proposals, it should not be too great a surprise and nation. It is a primary industry. I think what you are we should be down to making sure that the detail is alluding to is a recent suggested change to the right as opposed to the principle. The FREDS planning guidance as it relates to opencast coal. The committee, the BEG oVshoot or the biomass sub- same guidance was introduced into England about group, reported yesterday. You will note when you four years ago as MPG3. Whilst it does not aVect us read that that reference is made there to a trade-oV, directly, the English opencast industry has been that ideally you would build your biomass power decimated as a result. Last year there was not a single plant where the trees actually exist at the moment, planning permission granted in England. The same but that is not necessarily where the need is. If it is presumption against is suggested to be being applied associated with a paper mill, then it is going to be a in Scotland. This would be a presumption against semi-industrialised area. They quite rightly make the opencast coalmining. I appreciate it is planning point that it may be for pragmatic reasons much jargon but it is a change. It has not worked in easier to obtain the necessary consents on an existing England and we are desperately scared, I suppose, to industrial site, such as a paperworks or on the edge a certain extent of what it might mean in Scotland in of a new town, where there is a greater degree of Scottish Affairs Committee: Evidence Ev 23
1 February 2005 Mr Maf Smith, Mr Niall Crabb, Mr Jimmy Ferguson and Mr Alan Mortimer acceptance from the public than trying to site a upon renewables? Also. in relation to the planning major biomass power station on virgin land on the aspect, it has been suggested that one of the reasons edge of the Cairngorms, for instance. there seems to be a rash of wind farm applications is Mr Smith: If you look at renewables in general due to a cut-oV date with the introduction of without looking at technologies, we have the BETTA and that is causing the logjam. Is that the renewables obligation and that sends a clear long- case? In view of that, how many of these are ever term signal. That has been very welcome. We have likely to need to go ahead? GB targets now for 10% by 2010 and 15% for 2015 Mr Smith: In terms of BETTA, we do have major in the electricity sector. That helps to set the financial concerns about the eVect of BETTA on generation, signal that will encourage investment and that particularly generation within the Highlands and investment needs to know that it is going to be get a Islands of Scotland. We still support BETTA as a return on that, and that the energy market will not principle in that BETTA will open up a Scottish disappear, as it were. There will come a time very market, a GB market, by fusing England and Wales soon when we need to look within a GB context at alongside Scotland, and that is good. However, we what we are going to be looking for from renewable are concerned at the high charges and the imposition energy by 2020. We have the situation in Scotland of some new agreements and codes that the Scottish where the Scottish Executive has proposed 40% but market does not have and has not needed. The key the financial confidence in that will come from the issue is access, how you contract and get on to the GB market to put something in place which mirrors system, how you agree to use the transmission the ROC market (renewables obligations system. That relates to the queue you referred to. I certificates) that drives forward renewables here. We will return to that shortly. The second one is the would urge something in that sense. charging. We are seeing a proposal for locational charging, what Ofgem would call “cost reflective charging”, which will mean that Scotland, which at Q62 Mr Liddell-Grainger: Mr Crabb, you touched the moment makes up 13% of our generation mix for on the planning side. Is not one of the problems with GB, will be paying almost half of the charges. The all this that you are trying to diversify but the capital average Scottish generation plant in Scotland will cost, the investment, is extremely long term because pay up to six times more than the equivalent in of the planning problems you have. It can take up to England and Wales. We see it as unacceptable that a decade to get the planning authorities to back you. you can have some element of locational charging to If you lose that, or it goes into an inquiry, nobody try and drive investment but you cannot impose it to knows how long that will take. Do you think that we a point where no other signals can have any impact need to review the planning laws to try to push either. Given that in general renewables as a through renewables, or any form of energy resource have to be utilised where the resource is, production, because at the moment it is taking so that does not help. For example, you can pipe gas; long to do anything to get things up and running? others you can ship around; but wind, waves, tidal Mr Crabb: In an ideal world, you probably would and hydro have to be utilised at the source. We are throw another six and start again but planning seeing targets frustrated by that. In terms of the issue legislation has developed since 1947 to where we are of the queue, there is a substantial excess of now. Successive governments have all tried to generation being proposed in Scotland. We think a remove red tape and to make it easier for investment. lot of that is because the BETTA switchover has The Scottish Parliament is suggesting that they will meant that the National Grid has imposed a do a major review of the planning system in the deadline for when generators have to register their forthcoming year. To be pragmatic about it, we interest. If you do not register by that deadline, probably are where we are but there are things that which as 1 January, you would face new terms which could be done to streamline planning in terms of were not known. Therefore, companies interested in decision making. There is always a quality of staV schemes had to put in a scheme, no matter where the issue in local authorities, particularly with emerging scheme was in their own minds or in the technologies, because people do not have that development process. We would not expect the vast experience. Fundamentally, I believe that if you get majority of those to go forward, thereby artificially the development plan right at the outset, then the creating a demand. If you look at what we see as decision is made democratically as quickly as the needed in the wind sector where most of those local authority deem it to be appropriate. The worst projects are, if wind was to make up 20% of possible thing that could happen would be to bolt a Scotland’s electricity needs that would mean 70 wind third party right of appeal on to the end of that. If farms based on the average size. There are about 200 there is to be more public involvement and more within that queue but we do not see many of those public debate, that should be at the beginning so that being at a realistic stage in their development. all of us who want to invest know we are on a fairly Perhaps only half of those are at a realistic stage. We safe wicket in putting down our money. are planning success/failure rates to start to get down to the 70 you are going to need to meet that 20% that would be a useful contribution to all Scotland’s Q63 Mr Weir: Just following up some of those electricity by 2020. points, in your paper you talk about the impact of BETTA (British Electricity Trading and Q64 John Robertson: To return to transmission Transmission Arrangements) on renewables, and in charges, how much more is it for renewables than it particular on transmission charges. Could you tell us is for, say, nuclear or, for that matter, coal power a bit about those and how they are likely to impact stations? Ev 24 Scottish Affairs Committee: Evidence
1 February 2005 Mr Maf Smith, Mr Niall Crabb, Mr Jimmy Ferguson and Mr Alan Mortimer
Mr Smith: It is the same; payment is on a per the electricity itself or through the Renewable megawatt basis depending on the capacity of the Obligations certificates, which again are paid out per plant to which you want to connect. unit. There are no direct payments to establish wind farms; there is only payment for what is produced. Q65 John Robertson: There is no extra cost for the There are no ineYciencies in the market in that setting up wind farms or anything like that? system. You cannot get money just for putting up a Mr Smith: In terms of the transmission charge you wind farm; you can only get money for providing pay, no. The grid system is blind to the type of electricity into that market to the end user. generation. Q75 John Robertson: You have to have the wind Q66 John Robertson: This is an important point. farm before you get your electricity. Who do you think should pay the cost of setting up Mr Smith: You do, but the investors take that all these wind farms, the cost of connecting? decision. It is private investor which will make the Mr Smith: The market should pay for that. decision to build, construct and operate the wind farm. It will do that on the basis of having a contract Q67 John Robertson: But the market cannot aVord for the sale of the electricity to a supply company. that kind of cost all at once, so who is going to pay for it initially? Q76 John Robertson: This is good news. So there is Mr Smith: Do you mean if those high transmission no actual money needed from the Government? charges are in place, who will pay? Mr Smith: The funding is from the Renewables Obligation, which is money from the supply Q68 John Robertson: You say 20% of Scotland’s companies. The Government has imposed a penalty needs would equal 70 wind farms. on supply companies if they fail to meet targets on Mr Smith: Yes. renewable electricity that they have to provide. It is up to them how they choose to meet that. They will Q69 John Robertson: How many turbines would choose to meet that in the most cost-eVective way that need? that limits the risk to themselves and limits the Mr Smith: That is taking a wind farm with an increase that they would have to pass on to their average of 50 turbines. electricity customers.
Q70 John Robertson: At what kind of eYciency Q77 John Robertson: There could be an increase in would those 50 turbines have to run? cost? Mr Smith: That is looking at a two megawatt wind Mr Smith: The renewables obligation buy-out, the farm. penalty, is at a level calculated to account for the carbon cost of that fuel, the carbon savings that are Q71 John Robertson: What is the eYciency of a created from that. turbine? Mr Smith: It will depend on the site. The average Q78 John Robertson: If you take out all the eYciency we are seeing in Scotland in terms of their gobbledegook, how much is that? delivery is approximately 25–30%. Mr Smith: The Renewables Obligation is currently 3p per kilowatt, so per unit of energy. Q72 John Robertson: So they are not very eYcient then? Q79 John Robertson: How does that relate to a Mr Smith: But they will operate for 85% plus most nuclear power station? of the time. Mr Smith: There is not an equivalent buy-out.
Q73 John Robertson: So that I understand, for the 70 Q80 Mr Weir: My understanding is that the problem wind farms, you have based their size on a 25% with transmission charges is that, as far as eYciency rating? renewables are concerned, the pay-back time for a Mr Smith: Yes. The eYciency is not a relevant renewable development would be much longer than statistic in energy. What is relevant is to deliver— the time that is allowed on the sunset clause under the Energy Act. Could you also remind us how many Q74 John Robertson: With the best will in the world, conventional stations there are in the north of while I accept that you may want to sell it to us, I am Scotland and what eVect these transmission charges concerned about what we are getting for our money might have on these? here because I believe the Government will have to Mr Mortimer: These charges do apply uniformly to put out the money initially. If I am asking taxpayers all forms of generation. It is a particular concern of to pay to set up wind farms and there are going to be ours that they will aVect all generation across the 70 of them in Scotland to meet this need, then I want whole of Scotland and they will impact all of our to know what I am getting for my money. EYciency business. We do feel that they are disproportionate of 25% I would suggest is not very good. and we have made representations to Ofgem on that Mr Smith: In terms of the funding for renewables, account. To date, it does not appear that that has that comes from other sources. The developers been heard. We also believe that they are receive money for each unit of electricity they particularly disproportionate to renewables because produce. That is funded through either the sale of most renewables are in the remoter areas where these Scottish Affairs Committee: Evidence Ev 25
1 February 2005 Mr Maf Smith, Mr Niall Crabb, Mr Jimmy Ferguson and Mr Alan Mortimer charges are highest, and that is contrary to the Q86 Mr Lyons: Do you think that is realistic for us? requirements of the European Renewables Mr Ferguson: I think it is very realistic, personally. I Directive. Again, we have made that point, but we think Maf Smith in his introduction mentioned the do not know yet whether that has been listened to hydrogen economy, which is a little bit down the and heeded by Ofgem. If it has not, then really the road yet but it is something that we should be very only route left is the clause which you referred to in carefully looking at from a Scottish perspective to the Energy Act and the potential discount for remote see what or how we integrate that and grasp the area generators. opportunities there for the future of the economy.
Q81 Mr Weir: You would agree that whilst making Q87 Mr Weir: In your paper you give a breakdown renewables more expensive, it would also make of how you see this 40% being made up: one-quarter for hydro; half for wind; and a quarter for emerging conventional generation in the north of Scotland technologies. I have two points. How far advanced more expensive? are these emerging technologies and how realistic Mr Mortimer: Yes. are they to produce large scale electricity? As regard hydro, what new schemes are proposed for hydro Q82 Mr Sawar: Nuclear power stations are currently and are they having the same diYculties as wind being decommissioned throughout the world. Do power, for example? you believe that a combination of renewables and Mr Smith: Perhaps I could take the general fossil fuel (conventional) will ever be able to replace breakdown and then I will pass to Jimmy Ferguson nuclear energy? to talk about the marine technologies. Mr Ferguson: The decision on whether the country moves into renewable energy does not depend on The Committee suspended from 3.08 pm to 3.22 pm whether the nuclear industry is established, but it is for a division in the House quite clear that, irrespective of what shape the renewables move into, we are going to need some The question you were asking was about the relative other form of power to supplement the renewable role of each of the technologies and what supports energy industry. I think in Maf Smith’s paper he some might need to get them there. In terms of where talks about possibly up to 60% of Scotland’s power we are now, for example hydro is the dominant under the current commitments will have to come technology within Scotland at the moment in from conventional methods. Conventional methods meeting renewable sources. It has been there a long could be hydrocarbon based or nuclear based. There time. We are expecting a small number of new is a clear need to fill up that gap. schemes to be proposed; for example, Southern Energy has proposed the Glendoe scheme in the Highlands. But much of the hydro we would expect Q83 Mr Sawar: You have talked about targets and to be small-scale hydro, a lot of river types, rather you said that 30% of our electricity will come from than the larger down schemes. In terms of its renewable sources. Do you think these targets are contribution to the targets and to large-scale energy achievable? generation, it would be relatively small. Wind is a Mr Ferguson: I think for Scotland those targets are proven technology and Scotland has a very quite achievable. There is still a bit of discussion to substantial resource. Scotland has 25% of Europe’s be held on the mix of renewables to satisfy that, but wind resource. Therefore, it is a very cost-eVective 40% from Scotland is a very achievable target. form of renewables and there are good sites there. We would expect that wind could meet up to half of that, which equates to 20% of Scotland’s electricity. Q84 Mr Sawar: What is the timetable? The challenge is how you move beyond that to Mr Ferguson: It is 40% by 2020 and that is include the emerging technologies, which are wave, achievable. tidal and biomass, which have a lot of potential but are still some way from market and so they need some support. Perhaps my colleagues could describe Q85 Mr Lyons: You concede in the paper that there what support they would need. will be a mix and you confirmed that 60:40 looks to Mr Ferguson: I will talk about the marine energy be what you are heading towards. What would be technologies. It is possible for the marine energy the ideal mix if you were looking for that? technologies to deliver a contribution towards the Mr Ferguson: Because of the resource available to support of emerging technologies. I would say that Scotland in wind and wave and biomass, it is is probably about 10% maximum from marine possible that Scotland would exceed its energy needs energy in the timescale given. However, to achieve capability by several hundred per cent. It just that we had an announcement yesterday of £42 depends on how you want to use and move that million in support to the marine energy industry, power. The 40% in gigawatt terms is not that diYcult which is very welcome. That broadly reflects what a target to achieve over a period of time, and time is industry has told the Government it needs. very necessary to achieve those targets, but there is However, there is still a further gap for small a potential for Scotland to be a gross exporter of companies like Wavegen, and I presume I am power and to create a new economy producing speaking on behalf of others like OPD and WAS as power and sending it elsewhere. well, where it is going to be quite diYcult to find the Ev 26 Scottish Affairs Committee: Evidence
1 February 2005 Mr Maf Smith, Mr Niall Crabb, Mr Jimmy Ferguson and Mr Alan Mortimer additional money, private equity, to help the Mr Mortimer: Without the Renewables Obligation technologies get to the next stage of evolution. It is and its predecessor, which was the Scottish achievable but additional support is needed to help Renewables Obligation in Scotland, no, we would the smaller companies in taking their technologies to not. that next stage of development. It would probably take up to 10 years for all the companies to get to the stage where they have enough critical mass to go Q92 Mr Hamilton: Scottish Coal, do you receive any their own way and act and behave as stand-alone public subsidies? businesses. Mr Crabb: Not at the moment.
Q88 Mr Weir: You are talking about ten years to get Q93 John Robertson: Mr Smith, you gave a figure of to that stage. What sort of timescale are we talking 3p per kilowatt. Was that for all renewable power or about before they have a significant impact on the was that just for wind power? amount of electricity that is being generated from Mr Smith: That figure is for all renewables. The these schemes and feeding into the grid? Renewables Obligation is technology blind. Mr Ferguson: This is my personal opinion. I would define significant impact as where a technology can deliver on a commercial basis about 100 megawatts Q94 John Robertson: I find this quite hard to believe of power. I speak on behalf of Wavegen: with the because the Royal Academy of Engineering made a right support, we could probably deliver that in report on energy and how much it was costing. Their about eight years’ time. That would take us through figures were 2.2p for coal; 2.3p for nuclear; 6.3p for a couple of stages of evolution coming up to one wave; and 6.7p for wind. That is more than double megawatt, five megawatt, 10 megawatt, 50 what you are telling me. I asked you earlier, and I megawatt and then 100 megawatt. That would be want you to answer this question again: are you the critical amount when I would say this technology receiving a subsidy and, if not, why the discrepancy can deliver and do so commercially. in the figures? Mr Smith: Firstly, if you look at what the report of the Royal Academy of Engineering was trying to do, Q89 Mr Lyons: Mr Ferguson, has the technology the objective of the report was to look at a bounded been used elsewhere in other countries so that we community and try to work out how to provide new could look at the evidence and use that rather than generation for that community. The costs that that start from scratch to develop this here? report comes up with do not relate to the costs we Mr Ferguson: Our technology is unique in the world. would expect to see across GB or within the GB Let me rephrase that. There have been a few other market. That is not what they analysed. attempts at commercialising our technology— Japan, India, China and Norway—but they failed on deployment. We have records to show that the Q95 John Robertson: Let us talk English here so we basic principle that we use was available 100 years can understand what you are saying. Are you telling ago. The diYculty was in taking it and putting it me that these figures are wrong and that the Royal together as an integrated package, as we say “from Academy for Engineering did not give us the truth? wave to wire” and then delivering that Mr Smith: They took a range of figures. They did not commercially. We know the technology works; we take those figures and try to work out what the costs have been operating and producing power into the of the diVerent technologies would be to work in the grid now for over four years at (Isla). What we have British market. They compiled figures for a range of to do now is reduce the cost of that power and deliver diVerent sectors, and that is where you get it on a scale. discrepancies within that from other reports. If you want direct figures in terms of what the cost of Q90 Mr Hamilton: Could I ask ScottishPower: what operation of those technologies is, the Renewables percentage of energy does your company currently Obligation I have outlined has a value set on the produce from renewable sources? penalty payment of 3p. Mr Mortimer: I would have to check exactly what that is. At the moment, we have just over 100 Q96 John Robertson: You told us that previously. megawatts of hydropower and 150 megawatts of Are the figures of 6.7p for wind and 6.3p for wave wind power. I would have to check the percentages. wrong? The figures they used must have come from people like yourself. Q91 Mr Hamilton: Unlike John Robertson’s view, Mr Smith: My view, from the figures I have seen in my view is that a subsidy means it comes from the reports, is that the cost of wind is beneath that. The public purse. You can dress it up in any way you cost of wind is less than that. want but the public ends up paying something. Would ScottishPower have entered into the wind farms and the wind development if that public Q97 John Robertson: You are at less than half of money had not been available for you to access? You that. You said 3p and so we are roughly 3.3p or have implied you are a commercial company, an 3.7p out. international company. Would you have gone down Mr Smith: That is the cost of the Renewables that road if money had not been made available to Obligation which you receive in addition to the cost you? of the sale of the electricity. Scottish Affairs Committee: Evidence Ev 27
1 February 2005 Mr Maf Smith, Mr Niall Crabb, Mr Jimmy Ferguson and Mr Alan Mortimer
Q98 John Robertson: You have to remember, Mr period of five years, I think it is, for marine energy. Smith, that we are here looking at this as the British That is for a very fixed period of time and it is capped Parliament and how much it is going to cost the oV at certain limits. people of this country. We have been told that coal is 2.2p per kilowatt and nuclear power is 2.3p. While Q100 Ann McKechin: The figures provided by Mr a lot of us want to become involved in renewables Robertson do not include the cost of the damage to and make sure that we have alternative methods of the environment or the cost of decommissioning of getting power, we need to know exactly what the nuclear energy or the cost in terms of climate change. cost is and whether the figure of 6.7p is right or These are factors but they are not built into the wrong. If you are telling me the figure is 3p, then I figures Mr Robertson quoted to you. Am I right in would say 3p was quite good. You also told me you saying that? do not receive any subsidies, and I thought that was Mr Ferguson: That is why I declined to comment on great because you said that all the costs were going figures for social and nuclear. It is very unclear what towards outside industry that was going to pay the the figures are. bill, and they were even going to have penalties against them if they did not reach the figures. If that Q101 John Robertson: Is there a factor built in for is correct, then I am all for that. If I am now paying adverse weather that would cause the turbines to be over 100% more than that, then I want to know why switched oV if that gets any worse? Do you know that is and I want to know why the figures would be exactly what the weather is going to do in years to doctored as such to make it look as if it was a lot less come? than it was. Mr Mortimer: On every site we measure the wind Mr Ferguson: There are many questions within your speeds and determine the wind regime. The average question. Let me try and explain this. I am speaking shutdown due to high winds, that you refer to, with knowledge from my former existence as a amounts to round about 1% in a year. project director on an oVshore wind farm oV Great Yarmouth. I am not familiar with the report you are Q102 John Robertson: But it is getting worse. If you talking about but the figures sound to be round can do this, I suggest you tell the weather girl in the about correct. The cost of producing power from the morning so that we know what the weather is going various technologies is of the order of magnitude the to do. figures you were quoting, the figure Maf Smith gave Mr Mortimer: If the wind speed increases, then the earlier that all renewable industries receive. I explain average production of the wind farms will go up this to my children by the term “golf handicap”. The because the amount they produce at lower wind golf handicap they get at the moment—and I think speeds will increase by more than the extra loss they you referred to it as a subsidy—is a form of subsidy will get in very high wind speeds when they shut but it does not come from Government but from down in a gale. industry though this obligation. At the moment, that subsidy for renewable energy is 3p. The figure of 6.7 Q103 John Robertson: I am thoroughly confused by or 5 point whatever it was is reduced by 3p to give all the figures being bandied about. You were talking wind energy and wave energy an equal chance of earlier about the mix of types of renewables. Can standing, so that when developers like you tell us what you think is the most appropriate ScottishPower come along, they can look at wind form of renewable energy for Scotland? I did not get Y and conventional power on a level playing field. The an answer to my earlier point about the di culties idea is that the 3p brings the figure down so that it that hydro was facing. You mentioned the Glendoe goes head-to-head with other forms of generation. scheme. I understood there was considerable objection in the area of the Glendoe scheme, in much the same way as there is over wind farms. On that basis, I wonder whether you would support the view Q99 John Robertson: You have explained that very that it is time for a national strategy for these well, Mr Ferguson. How long will that money be renewables, at least in planning terms, so that people available to the industry? know where they stand rather than the rash of Mr Ferguson: Let me add one more fact. The cost of applications that we have seen to meet the BETTA producing power from wind varies by as much as 5p deadline. V to 8p depending whether it is onshore, o shore, the Mr Smith: The current policy is primarily the distance to the grid and the environment in which planning policy within the Scottish Executive. We V you are building. By going o shore of course you would support clarification about what that means have the risks associated with the marine in terms of delivery of projects. For example, and we environment, vessel costs, et cetera. The cost of are guilty as well, we have said 40%. That is not an taking wind energy oVshore is significantly more oYcial clarification of what that will mean in terms, than it is onshore. The figure you have there sounds for example, of the number of megawatts or very much like an average that has been put megawatt hours being produced and what you could together. How long will the subsidy go on? I will ask expect from each of those technologies. We have for some help from Maf Smith in a second. The told you today that we would expect wind could announcement yesterday on the draft the achieve all of that, which would equate to 70 wind Government has put forward is for¨ 42 million. They farms. That starts to clarify what would be needed. say they are going to put in enhanced support for a Within the Scottish Executive forum on renewable Ev 28 Scottish Affairs Committee: Evidence
1 February 2005 Mr Maf Smith, Mr Niall Crabb, Mr Jimmy Ferguson and Mr Alan Mortimer energy development for Scotland, the industry Mr Smith: If I may, I will turn that round and say executive discussion group, they have a report on that there is not a form of generation we have yet biomass and a report on wave and tidal which could found that everyone likes. That is part of the come out with figures about what they see as problem we are faced with and I suggest it is part of realisable and realistic. We think there is a need for the problem you have in your inquiry. We have got that. In terms of the other area relating to wind out of the habit of consenting new generation. For energy and the interest in new applications, what is example, the hydros we benefit from in Scotland and missing from the planning framework is cumulative the conventional stations we have in Scotland are a impact; that is, how to make decisions when you result of the time when either it was easier to make have more than one scheme proposed and there is those decisions or we were more prepared to make interest from a number of developers. Guidance for those decisions. It now seems we are not prepared to local authorities would help on that. However, it is make the decisions that do need to be made if we are going to have the right mix of generation and important to note that there is a national planning Y guidance which does guide local authorities or the su cient schemes for us to build. There is no reason Scottish Executive when it decides with larger why a modern hydro should not be more acceptable schemes how to assess individual schemes. There than those previous schemes. The environmental regulations are now much stricter, and that is is clear guidance from Scottish Natural Heritage appropriate, but that does not mean that the scheme about, for example, diVerent landscape should not be able to get through that and receive designations, and that again helps to guide the consent it needs. developments. There are very clear steering Mr Hamilton: In my previous life I was a local messages already in the system to develop that and councillor. I was also Chair of Strategic Planning. It tell them where they should go and what types of sounds as though Maf Smith is saying that— sites they should be seeking to bring forward but it Chairman: There are now going to be two divisions, does not tell local authorities or the public at large which will take half an hour. In light of the time, it the amount or the level that we will need. would be very unfair of us to keep the witnesses here. I understand that Mr Mortimer has to leave at 4.20. We are going to write to you with the rest of the questions. It may be, however, that we have to ask you to come back at a later date. I am sorry about Q104 John Robertson: What about the point about that but this is democracy. Thank you very much for hydro and what is happening there? your attendance today, gentlemen.
SUPPLEMENTARY ANSWERS FROM SCOTTISH RENEWABLES FORUM TO THE SCOTTISH AFFAIRS COMMITTEE’S INQUIRY INTO SCOTLAND’S FUTURE ENERGY NEEDS
1. Do you believe that planning regulations should be changed in order to facilitate the establishment of more wind farm sites? We do not see that the planning system should necessarily be changed to facilitate establishment of more wind farms. However, it is certainly true that the workings of the planning system can frustrate speedy resolution of planning applications. All that is required is to ensure the planning system delivers and fits with existing guidance. Within Scotland planning on renewables is governed by National Planning Policy Guidance 6 (NPPG 6) of the Scottish Executive. This sets out how planning authorities need to assess individual applications for renewable sites. Backing this up is the Scottish Executive’s Planning Advice Note 45 (providing case studies and further detail for NPPG6) and various guidance from other statutory bodies: in particular Scottish Natural Heritage. Experience in taking forwards renewable energy projects (in particular wind and hydro) has demonstrated that the planning system does not always follow planning guidance. Key issues are: — Planning decision times are increasing, and are commonly over 12 months. However, planning authorities have an obligation to make a decision with 6 weeks of receiving an application. — Long decision times are unhelpful to all concerned, as slow decisions do not necessarily amount to better decisions. The result is that developers and the local community have no certainty of outcome. Swift decision making (acceptance or rejection) would give all more understanding about what was actually going to happen in an area. This can be particularly problematic in an area where a number of proposals are in planning: a lack of decisions mean that the local community will be forced to assume that all proposals will come forwards. Scottish Affairs Committee: Evidence Ev 29
— If planning consent is granted, planning authorities then consider other technical issues and agreements (known as section 75 agreements) to set out development conditions for the particular project. These agreements can cover issues such as decommissioning bonds, roads and access work, planning gain and community benefit. However, many of the issues covered in these agreements are generic, meaning that the bulk of the agreement could be established prior to the planning consent being awarded. At the moment, these technical agreements can delay a final planning decision by up to a year, meaning that successful projects must wait over two years for resolution. We would therefore wish to see Scottish planning authorities (either local planning or the Scottish Executive) ensuring that targets within existing guidance are kept to. However we do see that there are areas in which the planning system could be modified or improved. There are two particular issues needing resolution: — Cumulative impact: in an area where multiple schemes are proposed, then there is little guidance from the Scottish Executive to local authorities on how to assess these multiple applications, or to ask project developers to explain potential impact on the local area in light of other existing schemes. We have sought further guidance work from the Scottish Executive that would assist local authorities in assessing multiple projects. — Clarity in renewable targets: the Scottish Executive has a target that 18% of its electricity comes from renewable sources by 2010. This will rise to 40% by 2020. These targets aim to assist in achievement of wider GB targets. However, there is a lack of clarity about what these targets mean in terms of number of gigawatts necessary, and the likely contribution from each technology.
2. Some conventional forms of energy, opencast mining, for example, can disrupt the local environment; is there not a similar danger about renewable forms of energy doing the same? For example, we hear complaints that wind farms intrude on the landscape by being ugly and noisy—would you like to comment? It is worth noting that there is no useable energy technology that does not have some kind of impact either on the local or global environment, if not both. It is for the planning system to assess likely impact and ensure that on balance the schemes are beneficial and that any disruption can be minimised. Considering wind, where there is currently a lot of interest in scheme development, cumulative impact tools would be useful to prevent over development of a particular technology in an area, and we would expect the planning system to be able to control development and ensure it is acceptable and can be accommodated within the landscape. Consideration of whether wind farms are “ugly” is important but is subjective. Some people do not like wind farms and feel they are inappropriate structures. However, the majority of people finds them attractive and understands that they make an important contribution to meeting our energy needs. This fact has been demonstrated by numerous surveys. For example, in 2003 the Scottish Executive commissioned MORI to survey residents living near existing wind farms in Scotland and assess their views of wind energy. For example, three times the number of residents said that their local wind farm had a broadly positive impact on the area (20%) than said that it had a negative impact (7%). Most (73%) felt that it had neither a positive nor negative impact, or expressed no opinion. Furthermore the MORI poll found that people living closest to the wind farms were generally most positive about them (44% of those living within 5km said the wind farm had a positive impact, compared with 16% of those living 10–20km away). These people were also most supportive of expansion of the sites (65% of those in the 5km zone support 50% expansion, compared with 53% of those in the 10–20km zone). Similarly, those who most frequently saw the wind farms in their day-to-day lives tended to be most favourable towards them (33% of those who see the turbines all the time or frequently said the wind farms had a positive impact on the area, while 18% of those who only saw them occasionally said the same). On the issue of noise, it has been shown that wind farms are not noisy and operate eVectively within tightly controlled noise limits. Noise levels are a standard planning condition for wind farm schemes, meaning that the developer has tight limits to work within.
3. We heard from the UKAEA that using nuclear fusion to produce electricity might be a viable option in about another 30 years. Do you believe this is a realistic timescale? We have no expertise on our group about the likely timeline for eVective nuclear fusion delivery. However, we would note here that even if fusion energy can be achieved at a realistic price within this timescale, which still leaves us with a shortfall in our energy supplies over the next 30 years. In Scotland for example, two of our coal and one of our nuclear stations will close in the next 10 years, taking away 50% of Scotland’s generating capacity. New capacity will therefore be needed, and renewables has a role in meeting a part, but not all, of this. Ev 30 Scottish Affairs Committee: Evidence
4. What are your views on the principle of nuclear fusion; would your own companies wish to be associated with producing power by such a method? Companies we work with have no developed view of nuclear fusion. However, to be interested, companies would need to see public acceptability for the technology; reliability; cost eVectiveness, and the ability for them to see a return on any investment in the technology. It is not clear that nuclear fusion technology can provide this: this being the case, then private sector involvement is unlikely without significant government involvement or support.
5. In your submission you state that that renewables have a use in providing Scotland’s future heating and transport energy needs. Would you like to expand on this viewpoint? If one considers energy use in Scotland, only 20% of our needs are electricity based. The remaining 80% of energy is for provision of transport energy or heating energy. In Scotland we have a target that 40% of electricity comes from renewable sources by 2020. However, in terms of our total energy needs, this equates to an 8% target. This contrasts poorly with action in the European Union where a 10% energy target for 2010 has been set, and where consideration is being given to a 20% energy target for 2020. Heating energy is provided primarily by gas, liquid propane gas and oil. All are finite resources, and all are resources where indigenous supplies are beginning to run down, meaning increasing importance on imported supplies, and an increasing likelihood of cost fluctuations. Transport energy is provided almost totally by petroleum fuels. While supplies here are still strong, it is generally accepted that the larger reserves in Scotland are now being drilled, and future discoveries will be smaller in size. Also, there is a need to ensure that we utilise our reserves intelligently (eg ensure supplies for manufacturing of higher value materials). Given the above, it makes sense that we look now at how renewable sources will help us to meet future heating and transport needs. Within Scotland there is significant potential to utilise solar and biomass (eg wood resources) to meet an increasing element of our heating needs. At the current time, there is growing interest in creation of boiler networks providing heating needs. For example, in southern Argyll the local authority and local agency Argyll, the Lomonds and the Islands Energy Agency (ALI Energy) are supporting installation of biomass boilers in business and domestic premises. For example, the swimming pool and new housing association housing has been fitted with biomass boilers in Lochgilphead. For transport, companies such as Argent Energy are now delivering fuel made from renewable sources. Argent Energy has now commissioned a plant near Motherwell that produces biodiesel for the UK market. The firm takes used vegetable oil and tallow and processes it into biodiesel. This fuel can either be mixed into normal diesel supplies or sold separately. It is expected that the Argent Energy plant will make a significant contribution to the UK meeting its voluntary targets under the EU Biofuels Directive that sets the UK a target of meeting 5.25% of its diesel supplies by 2010. Scottish Renewables Forum has called for a wider energy target to be set. Currently we have a renewable electricity target, but we would like to see a wider target set that encourages and supports action in delivering renewable energy for heating and transport. Our view is that setting a wider GB target that 25% of our energy comes from renewable sources by 2025 would be a stretching, but achievable target.
6. In your submission, you also say “If renewable energy is to be successful there must be co-ordination across Government departments and with government agencies. Too often our industry must deal with conflicting policies and regulations”. Are the diYculties caused within UK government—ie, between legislation introduced by, eg, the DTI and by DEFRA, or is more likely to be a conflict of legislation introduced by the UK government and that introduced by the Scottish Executive? Our key example within the UK Government is in how the electricity industry is regulated by various government departments or non-governmental departmental bodies. At the current time we spend significant time liaising with Ofgem on reforms underway to merge the English and Welsh electricity markets to create a new British market. This reform is known as the British Electricity Trading and Transmission Arrangements (BETTA). While BETTA will assist in opening up the Scottish market, and allowing Scottish generators access to the English and Welsh markets, we have ongoing concerns about the high transmission charges being set by Ofgem. Ofgem wishes to use “locational charging”. However, the end result is a series of transmission charges significantly higher for Scottish generation. At the present time, transmission charges in Scotland are between £5 and £12 per kW. Under BETTA they will increase to between £12 and £25. The dichotomy here is that the two Scottish transmission companies can run the network eVectively at less than half the cost that is being set under BETTA, and will lead to significantly higher charges in future. Scottish Affairs Committee: Evidence Ev 31
However, it is UK policy to develop renewable energy to meet targets. To achieve renewables targets we will need to utilise renewable resources, but a significant proportion of this resource is located in highland areas of Scotland. The net result is that the Government’s regulator has set charges for use of the network that frustrates achievement of energy policy.
7. What, in your view, is the safest way of managing and/or disposing of radioactive waste? As an organisation we have no developed policy on radioactive waste.
8. Do you believe that low-level and intermediate-level waste should, in principle, be dealt with in the same way, or should diVerent levels of waste be dealt with in diVerent ways? As an organisation we have no developed policy on radioactive waste. 16 March 2005 Ev 32 Scottish Affairs Committee: Evidence
Tuesday 22 February 2005
Members present:
Mrs Irene Adams, in the Chair
Mr Alistair Carmichael Mr John MacDougall Mr David Hamilton John Robertson Mr John Lyons Mr Michael Weir
Memorandum submitted by Professor James Lovelock CH CBE DSc FRS I am a wholly independent scientist and a long standing environmentalist. My credentials include the invention of an ultra sensitive detector that confirmed Rachel Carson’s warning that pesticides and herbicides were being overused to the detriment of wild life. I also was the first to discover that chlorofluorocarbons (CFCs) were accumulating on a global scale and to demonstrate that they decomposed in the stratosphere. My principle contribution has been the development of Gaia theory, otherwise called Earth System Science that sees the Earth as a self regulating planet that normally actively sustains a habitable environment. I fear that the climate change, consequent upon greenhouse gas emissions and unwise farming practices, will come sooner and be more severe than was thought only a year ago. Evidence coming from the monitoring of the global climate reveals changes as great as the most pessimistic of earlier predictions by such professional bodies as the Intergovernmental Panel on Climate Change (IPCC). The wholly unexpected and unprecedented heat in the European summer of 2003 when over 30,000 died was an example. We should take seriously the warnings of the Government Chief scientist, Sir David King, who in 2004 said that global warming is a more serious threat than terrorism. Secure supplies of energy, especially electricity, are needed to sustain our civilised way of life and the United Kingdom needs a secure energy base that does not depend on imports from what may soon become a troubled and unstable world. There is no energy source immediately available to us other than coal, gas or nuclear. Nuclear is available now, coal burning, if it is to continue, needs the early development of equipment to sequester the carbon dioxide before it leaves the furnace chimneys. Natural gas from the North Sea and the Norwegian Sea will soon run out and other sources are far distant and likely to be insecure. More important than this I grow concerned over the greenhouse eVect of a large increase in the use of gas for energy; natural gas is twenty five times more potent a greenhouse gas as is carbon dioxide, so that a leak as small as 2% of gas, anywhere from the wells to the homes or the power stations, will make it as harmful as burning coal and a 4% leak would make it three times as dangerous. The leak rate from North Sea gas wells has been reported as 6%, and the Russian gas fields are unlikely to be better. Renewable energy is a courageous idea but so far is unable to supply more than a token supply of energy and at present is uneconomic and unreliable in comparison with the other sources. I would recommend that every eVort be made to start nuclear new build and coal burning power stations that sequester the emitted carbon dioxide. The dangers of nuclear energy have been much exaggerated as have the problems of nuclear waste. They are minor compared with those that threaten from global heating. 21 February 2005
Witness: Professor James Lovelock, examined.
Q105 Chairman: Good afternoon, Professor coal burning power stations that sequester the Lovelock. May I welcome you to this public emitted carbon dioxide”. What has made you come evidence session of the Scottish AVairs Select to this view? Committee at Westminster. At present we are Professor Lovelock: It is a view I have held for the conducting an inquiry into “Meeting Scotland’s last 25 years, at least. It is on record in a book I wrote Future Energy Needs”, as you know. You have in 19855. kindly provided us with a written statement. Before we start our detailed questioning, is there anything Q107 John Robertson: Do you not find this a you wish to say to augment that statement or to add contradiction from being an environmentalist to to your written remarks? supporting coal in particular and nuclear? Professor Lovelock: Thank you for inviting me. I do Professor Lovelock: No, I do not. I am a scientist not have anything to add to the written statement I primarily. There is nothing wrong with getting sent. energy from coal, as long as you do not let the carbon dioxide get into the air. There are sensible Q106 John Robertson: Professor, you have been a 5 Note by witness: “The Ages of Gaia” published by Oxford leading environmentalist for 30 years and yet in your University Press in the UK and by WW Norton in the USA. statement you say that you would recommend that Publication date 1988. The writing was over a three year “every eVort be made to start nuclear new build and period. Scottish Affairs Committee: Evidence Ev 33
22 February 2005 Professor James Lovelock and economic ways of removing carbon dioxide Q112 Mr Weir: You would not accept the industry from the furnace gas at the power station. The view that it has to be dealt with in that way? biggest problem is sequestering it, knowing where to Professor Lovelock: The industry has no choice. I put it, but there are all sorts of suggestions. I do think the law says that radiation above certain levels think that it would be wrong for Scotland, which has must be treated in a certain way and that is it. considerable resources of coal left, not to use that power source. Q113 Mr Carmichael: Looking at the first part of Michael Weir’s question, and you have dealt with Q108 Mr Weir: You say in your submission that, not the question of nuclear waste, he spoke also about only have the dangers of nuclear energy been much the dangers of nuclear energy being exaggerated. I exaggerated but so have the problems of nuclear think he pulled that from your comments. What is waste. Given that nuclear waste is a real issue your assessment of these dangers? We all think of the surrounding nuclear power, what, in your view, is worst nuclear incident in our living memory, V the most e ective way of managing nuclear waste? Chernobyl. What is your assessment of something Professor Lovelock: I think we should follow the like that? example of the Finns who have suggested—in fact Professor Lovelock: The United Nations sent a they are doing it—burying it deep in the granite. World Health Organization team to Chernobyl in There is a lot of granite in Finland and there is lots 2001 or 2002. The information is all on their website. of it in Scotland. The natural radioactivity of the They found, after exhaustive investigations granite is quite high. The Finns reckon that it will involving a large number of doctors, a total of 45 not be many hundred years before the waste has deaths that had occurred at Chernobyl. Yet fallen to the same level of radioactivity as the repeatedly the BBC and most of the newspapers talk granite. of numbers in anything up from 30,000 to one million, and this is just nonsense. It is true that the Q109 Mr Weir: Do you accept there will be radiation distributed over a large area may shorten considerable public opposition to anywhere a the lives of people to some extent, but we might be nuclear waste depository was proposed? talking of shortening of lives by perhaps 16 hours or Professor Lovelock: I would wholly agree with you a couple of days. I think this is almost insignificant that the perception of the dangers of nuclear are so on a lifespan. The figures have been manipulated by widespread that any suggestion like that or that I the anti-nuclear people to make the worst possible make will be resisted. Yes, I agree. case. That was understandable in the Cold War. We were all frightened of nuclear events. CND and Q110 Mr Weir: Do you accept the industry view, other organisations did a good job in frightening which seems to be that any nuclear waste has to be people, but unfortunately the fear has hung over and very carefully put in lead lining, mixed with cement, is now a real problem in dealing with our energy and stored away for very many years? needs. Professor Lovelock: No. I think that is almost a nonsense that has grown up over the years. This Q114 Mr Carmichael: Your evidence to the problem of disposing of nuclear waste has almost Committee is that there are only 45 deaths become an industry of its own. It is a tiny amount is attributable to Chernobyl? the total that is being produced in this country, not Professor Lovelock: Quoting the United Nations only in Scotland but in Great Britain. It is something statistics, yes. that would fill a small detached house and that is over 40 years. It is not a major problem. But the amount of carbon dioxide that is produced, now Q115 Mr Carmichael: Are you familiar with the there is a real waste. A year’s amount would make a Chernobyl project by the Swiss agency for mountain of solid carbon dioxide two miles high and development and co-operation? 12 miles around its circumference. That is a gigantic Professor Lovelock: No, I am not problem to dispose of, but that is never mentioned. We only hear about this tiny, small quantity of nuclear waste. Q116 Mr Carmichael: If I told you that their figures, which were based on government agencies in the three former Soviet republics themselves, estimated Q111 Mr Weir: You mentioned that the nuclear that something in the region of 25,000 of the 800,000 waste would fill a small house. When we visited people had so far died as a result of their exposure to Dounreay we saw a great deal going into crushing; radiation, you would discount their figures? low level, intermediate level waste being put into Professor Lovelock: I do not know the quality of steel drums with cement and laying it out. When we their evidence. I have a great respect for WHO, a visited the United States we heard about the very great respect. In fact, I spent part of my life in problem of trying to get a project going at Yucca the Medical Research Council and worked closely Mountain. Are you talking about high level waste? with them, but I do not know about the others. Professor Lovelock: I was talking about high level waste. I do not consider the low level waste any problem at all. It is radiation at levels similar to Q117 Mr Carmichael: You would stick to the those in Cornwall, for example, and near Aberdeen assertion that the total number of deaths in Scotland, too. attributable to Chernobyl is 45? Ev 34 Scottish Affairs Committee: Evidence
22 February 2005 Professor James Lovelock
Professor Lovelock: Yes, so far. power the power stations in the British Isles is less than one-millionth of the quantity of coal, oil or gas. Q118 Mr MacDougall: From what you are saying, I There is not a very big throughput in that industry, presume the message you are giving is that your own so there is not an awful lot of money in it. particular view is that there should be further investigation into the re-prioritisation of our heating Q121 John Robertson: Do you think what we are energy needs. The observation so far is that we could getting really is the connection between nuclear exclude very easily the dramatic from the reality, weapons and nuclear power? what is perceived as opposed to what really happens Professor Lovelock: I think so, and this is very on the ground. You have highlighted your thoughts understandable. All of us were fearful during the on Chernobyl, which we talked about, and other Cold War that the superpowers would go really ways in which industries have lost lives and caused mad, and that would have been a terrible thing, and damage to the environment. There is diversity in it was right to be fearful, but we should not let it spoil industry. I have witnessed that in my own area of our future energy needs. Central Fife where we produce gas from coal. That is probably ahead of its time. Is your main point therefore, Professor, that there should be a closer, Q122 Mr Weir: Following on from that question, more detailed and wider examination of the re- one of the other problems perhaps with nuclear prioritisation of how we meet our energy needs? power is the worry that it could lead to nuclear Professor Lovelock: Indeed it is. I think that the DTI proliferation. We have seen how the Americans have Energy White Paper was badly unbalanced. reacted to the Iranian nuclear power plant. How Principally it was unbalanced by making our nations would you deal with that? It is all very well to say we utterly dependent for 80% of energy on imported would have nuclear power stations in the UK but gas. In a world that is likely to be changing fast as a how do you then prevent other countries building result of climate change, it would be madness to rely them, possibly with the weapons element involved on so insecure a source of supply, but, much more in that? than that, gas is probably the most dangerous Professor Lovelock: I do not know how we deal with greenhouse fuel of the whole lot. It is 25 times as other countries, but I do know about the UK. I am potent as carbon dioxide as a greenhouse gas. You glad you asked that question because most of the only need a leak of 2% for it to be just the same as waste problems in the UK come not so much from burning coal; a 4% leak makes it something like the production of power but from the production of three times more dangerous than burning coal for a plutonium for weapons. Modern nuclear power period of 60 years. I am told that the leak rate from stations—and I emphasise “power”—the ones that the North Sea is 6% from the gas wells and the would be the new build, are specifically designed not Russian leak rates range between 5 and 15%. It is an to be plutonium producing and to produce only exceedingly dangerous fuel to use and there may be about one-tenth as much waste as the old series. Like a world ban on the use of gas, which would leave us all engineering, it improves with time. It has had a in a terrible mess. good record to date. Apart from Chernobyl, it is the safest energy-producing system there is. It improves. Q119 John Robertson: Professor, I have been fortunate in that I have been to Finland and I have Q123 Mr Weir: Do you accept that perhaps in the seen what they have done with the waste there. They Iranian example there is already a worry about what won the argument not just politically but with the they might be doing with the nuclear power people of Finland about what they should do with programme? Do you accept there is a legitimate the waste. How do you think our Government could concern that some of these programmes might be allay the fears of the public here in relation to used for weapons production, especially, as I nuclear waste? understand it, the use of fast breeder reactors which Professor Lovelock: I think it would be quite a might produce plutonium that could be used in diYcult job but advertising in any form succeeds; we weapons? buy the products. If you tell people long enough the Professor Lovelock: In satisfying the United same message, they begin to believe in it, I am afraid. Kingdom’s energy needs, there is no need It is a terribly undemocratic thing to say but it seems whatsoever to have any nuclear power plants that to be a fact. We have been hearing the other message produce plutonium. The straightforward new from bodies like the green lobbies that seem to have generation plants do not do that. Whatever the had an awful lot of money to spend to say their piece Government does to enable nuclear new build, for a long time. surely could be built into the regulations having regard to them being of that type and not weapons- producing. Q120 John Robertson: Do you think we should open this up to the industry itself for them to sell their own industry to people? Q124 Mr Lyons: Professor, do you consider it is now Professor Lovelock: This is a funny thing. The time for the Government to make a decision about nuclear industry is a relatively small industry. I am how to deal with nuclear waste? not at all sure that it is even as big as the green Professor Lovelock: Oh indeed I do. We have very lobbies. This is not surprising when you think about little time left before the climate enters an it because the quantity of uranium you need to irreversible phase of warming. Beyond that point, Scottish Affairs Committee: Evidence Ev 35
22 February 2005 Professor James Lovelock there is nothing we can do that will stop it; it takes oV very close to sea level or likely to be flooded should of its own accord. According to all my climatologist be the ones to be abandoned and not the ones that colleagues, we are very close to that point indeed. are high up.
Q125 Mr Lyons: Do you think indecision makes Q130 Mr Hamilton: Professor, I am not a scientist people more worried and concerned about the but I was in the coal industry for 20 years, and that situation? was 20 years ago. Even in my time when I was in the Professor Lovelock: It is possible. coal industry, we were talking in terms of green coal. Indeed, there was a science department in the Q126 Mr Lyons: Turning to the question of new National Coal Board which was extremely good and build in terms of nuclear power stations, when do innovative. Many of its inventions were copied you think we need to start with new build in order to throughout the world. I have looked at your avoid a consequence of the lights going out? submission. How realistic is it that the idea of green Professor Lovelock: It is all a matter of the will. I am coal should be considered by Government at the told that the South Koreans can build a nuclear present time? power station in two years. The French claim they Professor Lovelock: I think it is quite realistic. In can do it in 56 months, and that is their schedule for fact, it is being done in some parts of the world. The Norwegians are not using coal but oil, but it makes the new stations they are building I think somewhere V in Brittany. There is no reason, as far as I can see, no di erence really to the sequestration problem. why we could not do the same, given the will. They are burying the CO2 in an old gas well under their part of the North Sea. In a sense, the prototype work is already underway and being done. There Q127 Mr Carmichael: Professor, do you have a view does not seem to be any bad news coming from these on who should be responsible for financing the attempts, so I see no reason why it should not be construction of new build for nuclear? done. Professor Lovelock: No, that is not my province at all. I do not know. All I do know is that the Royal Q131 Mr Hamilton: Would you therefore say, with Society of Engineers, which is a very respectable the experiments taking place in the use of biomass— professional body in this country, has costed nuclear coal, wood and so on, and I think there are now as the cheapest form of energy, cheaper even experiments being done at Cockcenzie power than gas price-wise. station—that this is the time to be looking at reinvesting in the coal industry? There is now the Q128 Mr Carmichael: I ask because you will be possibility of expanding in that area. We know full familiar with the terms of the Policy Innovation Unit well there are no pits left in Scotland but eight report on our energy needs. They concluded, if I million tonnes of coal are produced in Scotland at recall, that we require to build 10 nuclear power the present time. stations if it were to be economic. That was using Professor Lovelock: For Scotland’s needs, as I said figures that had been given to them by the nuclear earlier, it would be unwise to abandon coal. I think industry themselves. As far as I am aware, there is that is important, but I do not think you should ever nobody in the nuclear industry at the moment think of using biomass fuels as a way of getting proposing or oVering to build. Presumably that energy. This is a very dangerous notion indeed would be a cost that would fall on to the state. Are because it denies the fact that the world needs the you aware of any other means by which it could be natural ecosystems to regulate itself and keep the done? climate in a steady state. When you think of it, the Professor Lovelock: I would have thought, once the appetite of a car for example for fuel is something hesitation to go into a nuclear programme dropped like ten times that of a person. We are having enough and the Government shone a bright light on it and trouble finding enough farmland to feed people. Just gave it its favour, that industry would then be imagine what would be needed to feed cars and other prepared to join in and help fund it. I am not an energy sources in the world. Biomass fuel is all right economist. You are asking me to comment outside for getting rid of agricultural waste, but the moment my province. you go beyond that and starts planting crops to produce fuel, you are in a very dangerous area Q129 Mr Lyons: Going back to the question of new indeed. build, whatever the number might be, is there a scientific preference about where the sites should be? Q132 Mr Carmichael: You warn in your submission Professor Lovelock: I do not think it is a matter of that the UK “needs a secure energy base that does science but two factors come in here immediately. not depend on imports from what may soon become One is that wherever possible they should be on the a troubled and unstable world”. Is that not exactly same sites as the existing plant because most of the what is being proposed and in a very few years’ time local objections have already been answered and, the UK will be importing gas from, for example, much more importantly, the power lines are all Russia and Ukraine? joined up and all ready to go. The other factor is that Professor Lovelock: According to the DTI paper, the one should watch a little bit the sea level, which is North Sea and Norwegian supplies of gas are quite going to be rising throughout the century. limited and will run out. By 2020, when nuclear is Obviously, those nuclear power stations that are practically closed down, we will be importing Ev 36 Scottish Affairs Committee: Evidence
22 February 2005 Professor James Lovelock something like 80% of our energy needs probably power schemes like the Bristol Channel, but I do feel from Russia. There will be some coming in by they should be explored. The main renewable energy tanker, liquid methane from various parts of the you are going for is wind turbines and my objection world, but again, those are not really very secure to those is, one, that they are obtrusive and, two, that sources of energy. they are so ineYcient. I think the German equivalent of the Audit Commission announced recently that Q133 Mr Carmichael: Why then do you think the they were getting 16% eYciency from German wind DTI signed a concordat with Norway in 2002 to turbines, of which they have a huge number, I think construct a pipeline to import gas into the UK from 17,000. This seems pretty poor to me. Norway? Professor Lovelock: That is because the Norwegian fields will keep going perhaps until the 2020s and it Q139 Mr Weir: Are you aware of the experiments in is worth having, just as we are using the North Sea wave and tidal technology that are going on in at the moment, right up until it dries up. Scotland? Do you think that is a way that a significant amount of energy could be produced for the future? Q134 Mr Carmichael: You would regard Norway Professor Lovelock: I wish I could answer that with presumably as being a fairly secure, stable base from a positive “yes”. All I can say is: explore it as much which to import? as you can. After all, this is a challenge for Scottish Professor Lovelock: Yes, but not long-term. engineers, surely, who are supposed to be the best in the world. I would have thought that if it can be Q135 Mr Carmichael: What about their stocks to the done, it should be, yes. north of Norway? Professor Lovelock: They might be. Q140 Mr Lyons: On the question of hydro, we have Q136 Mr Carmichael: Do you know anything been served well in Scotland by decisions taken in about that? the 1930s and 1940s in terms of hydro. Is there scope, Professor Lovelock: I do not, no. in terms of modernisation and improving the eYciency of the hydro stations, that we could enact Q137 Mr Weir: You mention in your submission just now? that “renewable energy is a courageous idea but so Professor Lovelock: I am told, although I am not an far is unable to supply more than a token supply of expert on this, that hydro is used not to the limit but energy”. I would like you to expand on that and tell that you cannot expect a lot more of it. It is a mature us how much energy you consider it is feasible and technology that has developed. Probably there will realistic to expect from renewable resources within be relatively uneconomic hydro schemes that could the next 20 years? be brought into use, but I do not think you should Professor Lovelock: The nub is the time we have. expect a lot more from it. Shall we say we were now in 1900 and talking about this; renewables would be a very sensible option in many parts, not necessarily in this country but in Q141 John Robertson: Do you believe that the only many parts of the world. I would like to see, for way renewable sources of energy could be example, on the great plains of America where they economically viable would be if they were subsidised grow nothing but grain and soya beans and crops by the Government? like that –there is no countryside, it is just one-mile Professor Lovelock: That appears to be the case. square fields with barbed wire—as a wonderful site Going back again to the Royal Society of Engineers, for enormous wind farms all over, but our small they put the cost of renewables as far as wind is country is not like that. These wind farms are a little concerned at 7 point something pence per kilowatt V bit intrusive and unpopular, so it is not the chosen hour for o shore; 5 point something for onshore; source of energy. I have been told that the renewable and I think 2 to 2.5 for gas and nuclear. Subsidies energy that will be available from the Severn Barrage would be needed. would be equivalent to four large power stations. The City has stated that they would be prepared to Q142 John Robertson: Do you think we still need a fund such a scheme; it would cost £13 billion. I do balanced energy policy rather than putting all our not know why it has not been followed up; it seems V eggs in one basket? a much easier and more e ective renewable option Professor Lovelock: I do. I think one always needs a than many. balanced energy policy because you can never tell what is going to happen, particularly in a period Q138 Mr Weir: Do you consider that some forms of when climate change is happening rapidly. That not renewable energy are more technologically viable only aVects climate but it aVects world politics, and than others? What type of energy do you believe all sorts of things. would be most appropriate for Scotland from renewable sources? Professor Lovelock: You have hydropower already, Q143 Mr Lyons: Professor, you will be aware of the do you not, as far as you can get it? That is a first Scottish Executive’s decision to look by 2020 for grade form of renewable energy. I do not know how 40% of Scotland’s energy to be produced from suitable are the estuaries on the west coast for tidal renewables. Do you think that is feasible or realistic? Scottish Affairs Committee: Evidence Ev 37
22 February 2005 Professor James Lovelock
Professor Lovelock: I would need to be persuaded it year. Because of this, we are entering a diVerent was feasible or realistic, but again I do not know the world and we have got to stop thinking in terms of nature of the schemes they are proposing that will global solutions, or even European solutions, and give 40% of Scotland’s energy from renewables. If I almost be forced to think nationally on these did, I might be able to give a better answer. problems and we have got to secure our home base or we will not be any good outside it. Q144 Mr Lyons: Do you think it seems quite a task to get to that level by 2020? Q149 Mr Hamilton: Professor, earlier you answered Professor Lovelock: If it can be done, it would be a question on supplies quite negatively. I was wonderful in some ways. It would be an example to surprised by that and thrown by it because you are the world. As I say, we do not have time at this the first person who has ever answered the question juncture for visionary schemes. We have to cut our on biomass in a negative way. In the evidence we cloth to the conditions of the world and the world have taken up to now most people have indicated looks a very dangerous one. We had better use the that biomass is a way forward, a way of actually energy sources we need. Maybe they will give us time utilising all the facilities we have. Your indication to change over because any sort of energy source, was it is a dangerous road to go down. Perhaps you like a nuclear power station, does not last for ever. could submit a paper to explain that position? What They need replacing after a time, and then comes the you say is diVerent from what we have heard up to time one should look at or be prepared to use now. I would be interested to see how you come to alternatives. that conclusion.
Q145 Mr Lyons: What you are saying is very Professor Lovelock: I come to that conclusion interesting. You are almost following word for word through what has been my life’s work for the last 40 the statements we heard in the USA. People there years, understanding the earth, and at long last that were saying you need an audit of your resources and is beginning to be recognised in the general scientific then use that as a basis for building towards your community. We now do realise that the biology in target. Would that be your approach? the oceans and on the land play a vital part in Professor Lovelock: Indeed it would, yes. sustaining the climate and the composition of the atmosphere that we enjoy. In other words, they are Q146 Chairman: Most people would accept that a looking after the world for us and we cannot go on mix of nuclear, fossil and renewable sources of taking away those natural ecosystems for either energy is needed to maintain electricity supplies for farmland to feed people or for fuel without there the future. What, in your opinion, would be the being consequences. optimum percentage mix? Professor Lovelock: Whew, that is a diYcult one! I Q150 John Robertson: Professor, in your statement would have thought that one should get at least 30 you said, “There is no energy source immediately or 40% from nuclear and possibly a similar balance available to us other than coal, gas or nuclear”. from coal, given sequestering, and renewables fill up Apart from renewable sources, are there any other the gaps. alternative sources of energy that are being pursued at this moment in time? Q147 Mr Hamilton: If no nuclear power stations Professor Lovelock: Yes, indeed, and I had the 6 were built, and this is speculation, and you were pleasure of visiting the ITER fusion project at dependent on fossil fuels and renewables, do you Culham only a couple of weeks ago. I was very think that is feasible? surprised to see what amazing progress they have Professor Lovelock: Long term it is not feasible made there. I think they have actually got to the because the coal does not last for ever. If you are point of making 16 megawatts of power in that putting more demands on it, it will go sooner. I do small-scale, prototype fusion reactor. They are fairly not know what the life expectancies of the coal fields confident that the next stage, the large ones, will be V in Scotland are. Again, thinking of the troubled e ective power producers, but we cannot think of world, the importation of coal and other fuels from that—and they would be the first to say so—in under outside may be much more diYcult than it is now. 20 or 30 years.
Q148 Mr Hamilton: You are aware that the coal Q151 Chairman: There have been reports that China burn is basically about the same as it has been for the and South Africa are pursuing what I think is called last four or five years. All that has happened is that a pebble-bed technology in building new nuclear we have had a declining coal industry. The power stations. What are your views on this type of importation of coal has been at an increasing rate technology? over that period of time. Do you believe, as many Professor Lovelock: I think it is absolutely ideally people have reported here, that the security of suited to countries like South Africa and China. energy is of the utmost importance to the United These are small, modular nuclear power stations, Kingdom? which are about as failsafe as it is conceivable for Professor Lovelock: I do indeed. I think it is of vital 6 Note by witness: ITER is an acronym for, “International importance. I feel that because the climate is Thermonuclear Experimental Reactor”, and more recently changing so fast, the climate scientists involved with “International Tokomak Experimental Reactor”; it is also it are amazed at the change in attitude over a single the Latin for “The way”. Ev 38 Scottish Affairs Committee: Evidence
22 February 2005 Professor James Lovelock even a pessimistic engineer to consider and they do Q152 Chairman: Professor Lovelock, that concludes not produce large volumes of waste of any kind. our questions. May I thank you for your attendance They would be ideally suited for supplying power to here this afternoon. Before I declare the session regions. At the moment, countries like South Africa closed, do you have anything you wish to say in have big central power stations and they need to conclusion, perhaps on matters not covered already send cables over enormous distances. Not only are during the questioning? they expensive to build but they lose energy as they Professor Lovelock: The only thing I would like to go. They could dot the country around with a large do is to thank you for your most thoughtful and number of these small units, which really are small helpful questions. You have made me think a bit by our standards. I would have thought that in some more, and that is always worth spending an of the more remote areas of Scotland power from afternoon doing. one of those could be quite handy, but I do not know Chairman: Thank you for your attendance today. It enough about it. will be extremely helpful to us when we come to making our report. Scottish Affairs Committee: Evidence Ev 39
Tuesday 1 March 2005
Members present:
Mrs Irene Adams, in the Chair
Mr Alistair Carmichael Mr John MacDougall Mr Peter Duncan John Robertson David Hamilton Mr Mohammed Sarwar Mr John Lyons Mr Michael Weir
Letter to the Committee from Scottish and Southern Energy I am pleased to have this opportunity to submit written evidence to the Committee’s inquiry into meeting Scotland’s future energy needs. Scottish and Southern Energy (SSE) is the second largest electricity generator in the UK, owning and operating almost 10,000MW (megawatts) of thermal and renewable generation. This includes around 4,300MW of gas-fired generation, around 4,000MW of coal-fired generation and almost 1,400MW of renewable generation (making SSE the largest generator from renewable sources in the UK). All of this renewable generation is in Scotland. The company also owns two gas-fired power stations north of the border: at Peterhead, where there are 2,300MW of capacity; and at Cardenden, which has a capacity of 120MW. This submission deals with the third strand of the Committee’s inquiry: how can the shortfall in energy output be met once nuclear power no longer provides Scotland’s energy needs? This pre-supposes that the nuclear power stations at Hunterston and Torness (scheduled for decommissioning in 2016 and 2028 respectively, assuming a 40 year life) will not be replaced, and this submission is written on that premise. As a result of the punitive charges that will be levied on Scottish electricity generators under the new British Electricity Trading and Transmission Arrangements (BETTA), Scotland will become (all other things being equal) the first place in Great Britain in which power stations will be closed and the last place in which they will be built. These charges put Scotland firmly on course towards becoming an importer of energy in the medium term. The impact of the charges is such that it will cost £23 million more per year to operate a 1,000MW gas- fired power station located in Aberdeenshire than it will to run an identical power station located in Somerset (and £26 million more per year than it will to run an identical station in Cornwall). The significance of this cannot be understated, because the two nuclear stations are not the only Scottish power stations to face closure within a foreseeable timescale. The Large Combustion Plant Directive, combined with the impact of the EU Emissions Trading Scheme, will lead eventually to the closure of coal- fired generation in a number of locations in the UK. With high transmission charges, the two Scottish coal- fired power stations must be prime candidates for closure sooner rather than later. In other words, within 10 years, Scotland seems likely to lose around 4,500MW of nuclear and coal-fired generation capacity, and a further 1,300MW when Torness closes. Apart from renewable energy, this would leave just the power stations at Peterhead and Cardenden in Scotland—and high transmission charges make it much more diYcult to justify keeping even those stations open. There will, of course, be those who argue that the introduction of BETTA will lead to a Great Britain-wide electricity system, and that the existence of that system will make meeting Scotland’s future energy needs a straightforward matter. This attitude is complacent. It is true to say that a number of the previous constraints on the England-Scotland interconnector have been removed. Nevertheless, it is also reasonable to conclude that if Scotland loses large power stations in the central belt, a major upgrade of the interconnector would be necessary to ensure the security of the country’s electricity system. Upgrades of the electricity transmission system in the south of Scotland would also be necessary. A high-level estimate suggests that this investment in the electricity infrastructure could be of the order of £1 billion. Scotland’s future energy needs will be met, in part, by a growth in renewable energy—particularly onshore wind. In addition to the 300MW of wind generation which is already in operation in Scotland, consent has been granted for another 950MW. But transmission charges will have a very destabilising eVect here also. The Government has recognised this, and took powers in the Energy Act 2004 to “cap” the transmission charges incurred by generators whose output qualifies for Renewable Obligation Certificates. This means that the protection oVered by the cap would not extend to hydro-electric power stations with a capacity of more than 20MW which, as with Peterhead and Cardenden, places a question mark against their viability. Ev 40 Scottish Affairs Committee: Evidence
In addition, this “protection” power adopted by the Government will apply for a maximum of 10 years. This is despite the fact that the new renewable technologies, which the Renewables Obligation is designed to stimulate, are unlikely to be deployed commercially until the end of this decade at the earliest. In other words, the prospect of punitive transmission charges remains and will clearly undermine the development and deployment of new renewable technologies. In summary, therefore, Scotland is faced with the prospect of the following sequence of events unfolding: — closure of the nuclear power stations; — closure of the coal-fired power stations; — question marks against the viability of gas-fired and large hydro stations; — question marks against longer-term deployment of new renewable energy; and, in this scenario, — major investment in the England-Scotland interconnector and in the transmission networks. None of this is unavoidable. In particular, the transmission charging regime could be fundamentally reviewed—and strongly recommending that such a fundamental review takes place is the most valuable immediate step which the Committee could take to help Scotland meet its future energy needs. A reformed regime would, at the very least, remove from Scotland the stigma (all other things being equal) of being the last place in which it is economically rational to maintain or build a power station, including new renewable energy. With an appropriate charging regime, the future of the gas-fired power stations and the 20MW-plus hydro-electric stations would become significantly more secure. There would be fewer barriers in the way of developing and deploying renewable energy in Scotland. And the prospect for coal-fired generation would be brighter, allowing time for all of the options for “cleaning” coal technologies to be fully examined and, if viable, implemented. There would be every possibility of Scotland keeping a balanced portfolio of electricity generation. I am looking forward to discussing these issues with the Committee on 1 March. Ian Marchant Chief Executive 23 February 2005
Witnesses: Mr Ian Marchant, Chief Executive, Generation Operations, Scottish and Southern Energy and Mr Paul Smith, Director of Generation Operations, Scottish and Southern Energy, examined.
Q153 Chairman: Gentlemen, could I welcome you to basis, and I think this is a great opportunity and I this public evidence session on our inquiry into welcome being able to help the Committee in their Meeting Scotland’s Energy Needs. I know you have deliberations. had a great rush to get here and we are grateful to you for rushing the way that you have. For the Q155 Mr Sarwar: Paragraph 4 of your submission record, would you like to introduce yourselves? paints a very pessimistic picture, and you say that Mr Marchant: My name is Ian Marchant, I am Chief Scotland is on course towards being an importer of Executive of Scottish and Southern Energy, and I energy in the medium term. Could you please define am joined today by Paul Smith, who is Director of “medium term”? Are we talking about in 10 or 15 Generation Operations for Scottish and Southern years’ time or even sooner? Energy. Mr Marchant: My belief is it is more like a 10-year to 15-year horizon. If I can characterise the diVerence between the UK and the Scottish issues? I think the UK-wide issues are getting quite urgent; I think for Q154 Chairman: Thank you. Before we start on the Scotland the issues are more important but slightly detailed questioning is there any statement that you less urgent. We do have time to resolve this issue would like to make? particularly because the nuclear stations in Scotland Mr Marchant: Just two very short things. Apologies are not expected to close until 2011 at the earliest, for being late. I can, as it happens, blame the UK and maybe 2016 with life extension. So the issues are Energy Minister. I was speaking after him at a less pressing, but I think they are very, very conference and he was late. The interesting thing is important. that the theme of that conference was Energy in Crisis, the conference sponsored by Amicus7, and Q156 Mr Sarwar: From where do you think the very interesting flavour of that conference was Scotland will have to import its energy? Could it be that the debate was a UK-wide focus, and I think it from elsewhere in the UK? is very opportune that you are looking at the Mr Marchant: Yes, as I said in my introductory particular issues facing Scotland because a lot of the remarks, UK policy is driven at the UK level and the issues are being dealt with purely on a UK-wide view on security supply will be taken at a UK-wide level. So, yes, as a region Scotland will be an 7 Trade Union importer but the UK as a whole will be more Scottish Affairs Committee: Evidence Ev 41
1 March 2005 Mr Ian Marchant and Mr Paul Smith worried, for instance in the electricity, about its amount of gas, they will have the same O&M costs;9 overall reserve margin. At the moment Scotland has the only diVerence is the transmission bill and in one a significantly higher reserve margin than in England I am paying £18 a kilowatt and in the other one and Wales. I think that that could reverse. receiving £5, and the diVerence of that is £23 million. So if you were trying to decide where to build a new Q157 Mr Sarwar: But do you think in any future gas fired power station you can guess it would not be time we will have to import from countries like in Scotland because the price of land does not Norway or from Russia or the Ukraine? anywhere near get to £23 million a year. That is why Mr Marchant: If you are looking at gas, yes; I have made the statement that given these undoubtedly the UK—and Scotland I do not think transmission charges Scotland is the first place you will be any diVerent—will be a net gas importer, and would shut a power station—all other things being if it is not this year it will soon become a net gas equal—and Scotland is the last place you would importer. As the North Sea gas production starts to build a fossil fired generator—again, all other things decline, which we have already seen evidence of that, being equal. That is the consequence, that is what the UK will become a net energy importer. My these charges are designed to do. They are a very, comments were more focused, if you like, at very extreme economic signal. electricity. Q160 Mr Weir: What do you say to the Q158 Mr Sarwar: When you say about gas and you Government’s response to the argument that the say “this year”, that means it could be this year or generators in Scotland will benefit because of the next year? ending of charges on the interconnector? Mr Marchant: We probably have been this winter. Mr Marchant: As a company as a whole that is true, We almost certainly are today a net energy importer. and therefore why at this stage we are looking at Today, as you know, it has been a cold spell. My day those charges. I can live with them. I am talking started badly with snow in Edinburgh, and it has about the public policy consequences of the charges been a cold spell since last week, and almost certainly in the long-term. Those facts that I have given you— the UK has been a net importer of gas this week. So and Ofgem would not dispute them—are the facts. If that trend has been coming for years and it is here you are talking about a transitional change, yes, with us today. there are swings and roundabouts, but in the future when I make economic decisions about power Q159 Mr Weir: In your submission you talk about station location that is what I will be facing—a UK- the transmission charges problem, and you quote a wide market, the interconnector has gone, so any figure of between £23 million and £26 million more decisions are based on a UK-wide market. So the to operate a gas-fired power station in consequence of that is that Scottish power stations Aberdeenshire than the Southwest of England. Can will shut before English power stations. you expand on that and tell us how you come to these figures? Q161 Mr Weir: What about the impact on future Mr Marchant: What we have had until now are three renewable energy developments? The north of separate transmission charging areas. We have had Scotland is widely tipped to be the area where England and Wales, which the National Grid have renewable generation will be most appropriate. charged, and we have had the central belt of Obviously your main generator is in the North of Scotland, which Scottish Power have charged and Scotland. How do you see these charges impacting the north of Scotland—they have been run upon renewables? separately. And you pay diVerent amounts for Mr Marchant: I did say all other things being equal, generation. One of the consequences—not one of the and obviously the wind speed is diVerent in Scotland objectives—of BETTA8 is that we will have a than it is down here. Why are all the wind farms national set of transmissions charges. They are being wanting to locate in Scotland? Because of the higher put in place by the National Grid Company, who is wind speed. We will see two things happening as a the system operator and they have a model. I cannot result of these charges. The first is that renewables explain to you how that model works because I think still will get built in Scotland; good projects can still there are only about eight people in the country who aVord to pay these charges. But what that means for understand how that model works, but it is very, the fossil generation is, if you think about when the very extreme locational charging. So as a result our fossil generation closes the pricing signals should do Peterhead power station will pay £18 a kilowatt for that, they should soften and load and generation every kilowatt it has connected. A power station in supply gets more imbalanced in Scotland. But what the central belt of Scotland will pay around £12 a the renewables will do is replace that fossil kilowatt. A power station in the north of England generation and push the charges back up. So some will pay around £5. A power station in the Somerset renewables still get built, but less will get built with area will receive £5, so you have a very pronounced these extreme charges. It is quite clear that the more tilt. What the numbers in our evidence were saying marginal projects will not happen. We are currently was, converting those to pounds million on the trying to consent a new hydro station at Glendoe on bottom line, if you have two identical power stations the banks of Loch Ness and the economics of that with the same eYciency they will lose the same are being directly aVected by transmission charges,
8 British Electricity Trading and Transmission Arrangements 9 Operational and management costs Ev 42 Scottish Affairs Committee: Evidence
1 March 2005 Mr Ian Marchant and Mr Paul Smith and that makes a marginal project probably reserve margin, on a fossil and nuclear only you have uneconomic. I am not saying I will not be doing it gone below 100%—I cannot work the maths out in here, but there is clearly a marginal project that is my head but you have got to that point already. I being aVected. There are two diVerent things that are think the interesting issue is that if you take going on here. Cockenzie, we think that is likely to be the next coal station that shuts in the UK. It is not ours so we can Q162 Mr Weir: But is the implication of that—and give you some comment on it, but it is a marginal I do not want to put words into your mouth—that plant. So it starts to happen quite quickly. in future when you are looking at the type of generation you would favour, would that put you Q166 Mr Duncan: With such dramatic figures as that against renewables? Are you more likely to look at how likely do you think it is that we are going to face more conventional generation under these charges significant security issues in that 10-year period? in the south rather than in the north? Mr Marchant: The fundamental issue, as I see it in Mr Marchant: Yes. I am almost caricaturing what energy policy at the moment, is transmission pricing. could happen here, but in 20 years’ time you could Ofgem approved these prices only last week and they find that Scotland, in 20 or 30 years’ time, after the announced as part of that that there were some second nuclear closure, only has renewable energy, conditions they want reviewed. I think it is and all of the fossil conventional generation is in the important, and I would urge the Committee to look south. Therefore, what is Scotland’s energy at those conditions and, if you see fit, to recommend position? Well, if the wind is blowing and the tidal Y that those take a particular view of security supply regime is favourable, Scotland is self-su cient for in Scotland because there is a chance to change these energy. But for the other half of the time it is not and policies, these prices in the next two years. To me it it is a net importer—back to the original question. all hinges around those transmissions because they That is a caricature of where we may well end up, but are sending signals for certain things to be done. that is where the compilation of the transmission They are not the signals that you, the politicians pricing policy and the renewable pricing policy—it is want, but you have to change the signals otherwise an unintended consequence of these two policies the market will respond. So there is an avenue, there competing in an economic market place—will end is a review and the key thing is to make sure that that up. review is comprehensive. Q163 Mr Duncan: All around the world clearly the security of supply is becoming, if it was not already Q167 Mr Duncan: Obviously the other issue in the before, one of the major issues at the forefront of medium and longer term to ensuring security of policy making. In your submission to the committee supply is the relative balance between the individual in paragraph 7 you say that, “Within 10 years components of our energy mix. In your submission Scotland seems likely to lose around 4,500 you seem to foresee Scotland’s future energy needs megawatts of nuclear and coal-fired generation being met by a mix of fossil fuels and renewables, capacity, and a further 1,300 megawatts when essentially. What future do you see within that for Torness closes.” nuclear power? Mr Marchant: Yes. Mr Marchant: It is quite nice for a politician to be asking me that rather than me asking a politician. My own personal view is that I think it is going to be Q164 Mr Duncan: In broad terms could you give us Y what percentage of Scotland’s requirements that very, very di cult if not impossible to meet the two represents? objectives of security of supply and reduce carbon Mr Smith: Currently Scotland is around 30, 35 emissions without some new nuclear build. But I terawatt hours. British Energy and Scottish Power believe that we have to sort the waste issue out as a generate around 22 terrawatt hours, in broad terms, country before we can properly address that issue in and that will disappear and that will leave Peterhead, a professional and grown-up way. We should sort which is around eight terrawatt hours, plus the out the waste issue first and then when we are existing hydro fleet of around three, so there will be comfortable and we know how we are going to 11. So eVectively there will be a third of the existing handle it we can then look at that question in the capacity left generating. next few years. When I look at the numbers I find it diYcult to see newer technologies like marine making enough progress in enough time by 2015— Q165 Mr Duncan: So at a time when all around the and that is the cliV edge as far as the UK is world everyone is concerned with security supply, concerned, 2015. What can get there in 10 years? we are facing within 10 years the loss of one-third of Nuclear can because it can be built in that time our requirements in Scotland? because the technology is there. I am not sure about Mr Marchant: When Cockenzie, Longannet and the marine and some of the other technologies. first nuclear station close—which is the scenario we were talking about—Scotland is in that position I caricatured. It is not as extreme as that because it still Q168 Mr Duncan: I do not want to go too far down has one nuclear station and Peterhead, but you still this line because obviously it is a very specialist area, have that the fossil generation and the nuclear but am I not right in thinking that nuclear waste is, generation will be insuYcient to support Scotland’s to a large degree, an historic issue in that we have a energy requirement. So from being at maybe a 40% stockpile of nuclear waste and if there were to be a Scottish Affairs Committee: Evidence Ev 43
1 March 2005 Mr Ian Marchant and Mr Paul Smith new generation of nuclear plants then it would be immature—no one country or region in the world considerably eYcient in terms of generating waste has a lead in that technology—and I think that there than was the original generation? is a good argument for sustainable development in Mr Marchant: I agree. It is a personal view; I would that area which will bring jobs into Scotland as well rather know how we were going to sort out the past as meeting some of the energy requirements. That is one before we make it a little bit worse. why we are investing with the Weir Group, the Glasgow based engineering company, looking at Q169 Mr Duncan: Just to summarise this, it is your tidal technology, because I think that that has the contention, irrespective of the silence from potential to be a long-term solution. politicians, that in order to achieve both our security supply objectives and our Kyoto objectives it may Q173 Mr Lyons: At the outset you said that you well be necessary to commit to future nuclear power? would be looking at some new hydro stations. What Mr Marchant: It may well be necessary. That is a is the potential in that area? good way of putting it, it may well be necessary. Mr Smith: The majority of the schemes have already been identified in the past and were built with the Q170 Mr Lyons: Mr Marchant, you referred to the North of Scotland Hydro Board. The new one that mix of fossil and renewables as our future in some we have been currently looking at is the Glen Doe ways. What would be the optimum mix in your scheme, which is a 100 megawatts scheme up on the opinion between both of them? banks of Loch Ness, at Fort Augustus. We are still Mr Marchant: Unfortunately I do not know because looking at a number of small one and two megawatt it depends really upon the rate of technological schemes, but, again, they are going to make a very progress. For instance, if I had to make those small impact on the overall hydro output. Typically decisions I would want to know what the rate of the 1300 megawatts of installed capacity we have progress in reduction of the level of waste from generates just about three terrawatt hours a year, nuclear is versus the future costs of marine, the and in UK terms that is only 1% of the energy. future cost of biomass, the consequences of the Mr Marchant: Scotland is a well hydroed country. If agriculture of economy energy crops, all those sorts you look on a global basis we make good use of the of things. I cannot predict but I think any solution rain we get, and most of the best schemes that were that becomes unbalanced—because we will know stopped in the early 60s, when the hydro programme when we have got the wrong answer, I am not sure was killed were what are called cross-catchment we will ever know we have the right answer—if we schemes, where you take water from one catchment end up with 85% gas and 15% wind we have the into another. You now cannot do those under wrong answer. environmental regulations, I think it is the EU as well as UK law, and the Framework Directive is Q171 Mr Lyons: Can I just clarify a point from Mr making that worse. The best unused schemes are Duncan’s question? On nuclear are you saying that now oV limits. What we did about four years ago, we there should be no new build until they have some went into the company archives and we looked at all solutions found for the question of waste? of the old schemes and Glendoe was the best one we Mr Marchant: It is a personal view, yes. I think we could find that would meet the current legislative should sort out our past problems before getting requirement. It has so far taken us 22 months worse, but it is a personal view. through the planning process and we still do not have an answer. Just to give you a flavour, that is Q172 Mr Lyons: To keep on the terms of renewables, going to cost us about £1,400 a kilowatt to build in terms of Scotland what is the most appropriate compared to about £700 of £800 for an onshore wind renewable for Scotland, would you say? farm, and it will only be used half the time of an Mr Marchant: The most eYcient in terms of onshore wind farm, about 15%, a little over. So the economic eVect is obviously onshore wind. Let us be economics of the hydro are not compelling. clear, 16 gigawatts of onshore wind is not going to be built in Scotland, which is the level of connection Q174 Mr Weir: I just want to take you back to the applications that currently exist. That was wind farms on one point. You mentioned this rush occasioned by a particular quirk in the ways that the for permission to meet this artificial deadline. Do industry and Ofgem have decided to handle the you think that this rash of applications has move into BETTA. EVectively, we encouraged every irreparably damaged the image of onshore wind person who thought they might ever want to build a because of the impression given that the country is windmill anywhere in Scotland to put in an going to be covered in windmills? application because you get a certain reserved place Mr Marchant: I hope not. It is clear that the industry in a queue. So in a sense we have the maximum. My shot itself in the foot with this. In a sense I own view is that we will probably see less than half understand why the policy objective was pursued of that built because of the issues of visual amenity because the alternative would have had the wind and environmental impact. Local resistance will developers up in arms that they could never have got mean that with the planning process we will end up connected unless there was deep reinforcement in the with the right answer, which will be more than we southeast of England, which is what the debate was have today but significantly less than the asking of around. But there is a hearts and minds issue still to developers. I think the big prize for Scotland is in the be debated, both ways, and I think at the moment marine, where it is a technology which is fairly that the debate is quite polarised. The opponents of Ev 44 Scottish Affairs Committee: Evidence
1 March 2005 Mr Ian Marchant and Mr Paul Smith wind are focusing on 16 gigawatts and that is their terms of jobs through its construction facilities and answer, but the debate is what is the right level of intellectual property then you potentially can have a wind farm development and do the existing political desirable outcome. And if you think about the costs process of market forces get us there? I believe they of adaptation if climate change happens it may be do. I believe that the market will impose a discipline that if there is a price maybe it is a small price to pay. on a developer and that the planning process and the So I do think it is achievable and I think it is appeal will also allow the political process to work. I desirable. But that in a sense is political—the find the planning process dreadfully frustrating and question of desirability is a political decision and I dreadfully slow, but that is actually part of the price have given you my personal views. of having a democracy and making sure that we get to the best answer. Q178 Mr Weir: You also mentioned, when you were talking about BETTA, and it perhaps comes back to Q175 Mr Weir: Given that, I understand that there what we were discussing before, that those who are also similar planning problems with some of the think that meeting Scotland’s future energy needs is small hydro schemes as well, and the Scottish straightforward is a complacent attitude. Can you Executive has made a commitment of 40% explain why you think it is complacent? renewable energy by 2020. Given all the problems Mr Marchant: I think in the short term BETTA will how realistic do you think that is? have no issues. The lights will stay on. There will be Mr Marchant: 40% of what, is one of the questions? no adverse consequences next winter because we are I think we are going back, to answer that question. in a BETTA environment. But we deal in a long- Is it on electricity production in Scotland, because term industry, investment decisions in networks and 40% of nothing is not a great deal? Or is it 40% of power stations of 30 years, and if we do not start energy supplied in Scotland? Or is it 40% of making the right decisions fairly quickly then we will renewables in the UK? 40% of what? What I think is find ourselves in a position in 2010 that we do not that Scotland’s ability to have a growing and want to be in, where they are making urgent thriving renewables industry is very strong and that decisions and they are probably the wrong decisions. the amount of renewable energy capacity in We still have the time to get some of these things Scotland will grow. It is diYcult for me to predict right. But I think there is a complacency that because because 40% of your electricity generation, then things will be all right on day one they will be all right when does the nuclear shut? And it is something I in year five. have been actively encouraging the Scottish Executive to give greater definition to what that Q179 Mr Weir: In principle are you supportive of policy meant or potentially to redefine the policy in BETTA with these problems? diVerent terms. I hope I am explaining what I am Mr Marchant: Yes, I think the larger market will be talking about? more eYcient and we will strive to an overall lower cost solution. I just think that as a region Scotland Q176 Chairman: Maybe I can interrupt and help you has to decide what its energy policy wants to be. Do here with this? The Scottish Executive say in their they want to focus exclusively on renewables or do report, “The Executive has set a target of 18% of they want to have a regional self-suYciency? It can electricity generated in Scotland to be from be either of those objectives or any combination can renewable sources by 2010 and an aspirational be accommodated within the BETTA market. I just target of 40% by 2020. Current generation from think there needs to be more parity on what those renewable sources stands at around 12%.” objectives are. Mr Marchant: The 40% will be achieved very, very easily just by shutting Longannet and Cockenzie, Q180 Mr Carmichael: Can I first of all apologise for and that is my point. If you define it as a relative my lateness, and my apologies to you, Mr Marchant, point it is easy to achieve by reducing the amount if this is ground that you have already covered. You you generate. I think that is the wrong definition of have given your own definition of the Scottish policy. I think it should be of energy supplied, in Executive’s target of what you would like to see as other words what Scottish consumers use rather being 40% of electricity supply, which you think is than what Scottish generators generate. both achievable and desirable. Do you think in short that BETTA helps or hinders the meeting of that Q177 Mr Duncan: Can I ask you, if the policy were target? to be that 40% of energy supplied, would that be Mr Marchant: I think that BETTA has two “Ts”, either desirable or achievable? transmission and trading. I think certainly on the Mr Marchant: I think it is both. I think it is transmission side of it, which we were talking about achievable, 40% of energy supplied is achievable earlier, it is almost certainly going to hinder these without an enormous onshore wind. The question of high charges—I know the constituency you whether it is desirable then comes back to whether represent—particularly in the island groups where you fundamentally believe one of the most pressing we have some very, very good natural resources, and problems we face is climate change. That is a the risk of the very extreme locational signals could personal view and we will all have diVerent views in make what would be otherwise sensible projects not this room. I happen to think that it is right up near happen, and I think that you have to remember that the top of the list and if you can produce a BETTA and the whole transmission charging sustainable plan that has an economic benefit in methodology was built in a pre Energy White Paper Scottish Affairs Committee: Evidence Ev 45
1 March 2005 Mr Ian Marchant and Mr Paul Smith world. So we are implementing one set of policies are not the cheap option that people may have and we have put another key objective on it and we thought them to be in terms of producing energy and have not yet revised those key things. So I think they they are an expensive alternative, and the other one are good but they will actually hinder a diVerent suggesting that in terms of the hydroelectric, that policy objective, and we need a bit more joined-up that can be just as damaging to the environment as thinking and another look and say, “What market burning fossil fuels and may contribute towards structures do we need to fulfil the policy objectives global warming. I have mentioned this before on of the carbon reduction?” another occasion but I did come to the conclusion that nobody seems to have a source of energy that Q181 Mr Carmichael: Forgive me if you have does not have a problem and what you really have to already answered this question, and please say so, try to work out here is where we move on from here but Ofgem made its decision on Friday with regard in terms of what is the most sustainable form of to transmission charging. What is your view on the energy so that we would be able to supply Scotland impact of that in the development of renewables? in the short and longer term. Do you have a view on Mr Marchant: I did cover it but I think it is worth these particular comments? Do you dismiss them or repeating. I think that decision was the only one they do you think there is some reason for concern in could realistically have made, otherwise we would them? have had a disorderly market on 1 April. The key Mr Marchant: I will ask Paul to give you some point is they said that there were some things that capital costs in a minute, but I believe your summary they were still unhappy with. We have to make sure is well founded in the sense that I could find you that that review is wide ranging. There will be a somebody who is opposed to every form of energy pressure to keep it narrow. I think it is beholden production. Partly because the nuclear debate is upon people in Scotland particularly to make sure it relatively quiet we have not seen the counter is a wide ranging review so that we get the chance to proposition there. If you think the wind farm debate say what transmission pricing policy we want for the is virulent wait until the nuclear debate starts, it will long-term that meets our political objectives. So if be a whole diVerent order of magnitude. I happen to you regard those prices as a short-term fix that is think that clean coal can have a future but if you fine; if you regard them as a long-term solution we start talking about permitting a new coal fired power have a problem. station you will find people who are against that. The only thing—and this is the theme of the address Q182 Mr Carmichael: One final point briefly. Are that I was giving at the conference I was at—that you aware of the position with regard to the EU solves all the Government’s policy objectives is relating to transmission charging? Unfortunately I energy eYciency. The only way that you can really have come without the papers today but I am aware fundamentally deal with all of this is not use that unit of an EU directive from 2001, which I wondered in of electricity; therefore you do not have to worry fact if Sir John Mogg, the Chairman of Ofgem might which particular form of generation you have. I have been involved in drafting, which states that the think the Government recognised that 50% of its transmission charging regime should specifically not carbon reduction emissions needed to come from the discriminate about the generation of electricity from demand side, energy eYciency and things beyond renewables and specifically again especially those in the meter. But I do not think that current policy remote and peripheral, as he calls them, areas. instruments are going to deliver on that and I just Mr Marchant: I am aware of that view. I think that wish that there was the same amount of energy Ofgem’s view is that their proposals do not. My view enthusiasm, the cap and innovation and creativity is that I think it is a very interesting legal question on the demand side as there is in renewables. That and something that we have to very seriously think has put me on a hobbyhorse there, but in terms of about what we do with that. But if the charges are for costs, Paul. review then let us make sure that we get it right. So Mr Smith: You raised two points. One was the CO2 rather than starting oV with a challenge to it I would from hydro, which I will take first. That study was rather involve myself constructively in a sensible and actually based on these large hydro schemes that thorough review. If it is not a sensible and thorough have been done in China and Argentina and Brazil, review I will have to look at the legal implications of these sorts of places, where you are actually flooding that, and I think you will find that other Scottish existing valleys and the CO2 comes from the trapped generation take a very similar view. vegetation that has been flooded. Within Scotland, although all the hydro schemes were actually Q183 Mr Carmichael: So you are keeping the door existing lochs and had their level raised slightly or open on a legal challenge? they were running river schemes, so the actual CO2 Mr Marchant: I believe I have to, until I see the detail within those is just a natural river trapped level, so behind their review of these conditions. you will not see high levels of CO2 coming from the Scottish hydro scheme. On the second point, in Q184 Mr MacDougall: Can I just bring your terms of technology, as Ian has already said, £700 attention, you may have read the articles in the per kilowatt for wind and onshore wind farm is the media, the scientific research that was carried out, in rough estimate. For a CCGT—a Combined-Cycle The Guardian of 26 February and The Scotsman on Gas Turbine plant—you are looking at around £400 24 February, and both these reports highlighted a kilowatt. The operating costs for a wind farm, diVerent concerns, one on the fact that wind farms depending on its size, are significantly lower than Ev 46 Scottish Affairs Committee: Evidence
1 March 2005 Mr Ian Marchant and Mr Paul Smith that for a CCGT plant. So if you were working out Mr Marchant: I personally believe that any an investment clearly you would take the cost of environmental solution that ignores coal is just not paying for the capital to build the plant, you would practically achievable on a global scale. If you look then take the operating cost, obviously annualised, at China, India and the US, they all have substantial and work out per megawatt hour you are generating. reserves of coal and, in one case, an existing For wind you are obviously getting the energy for substantial energy requirement, and the other two free. So it could actually get your investment substantially growing. They are going to burn their eVectively at half the cost of a CCGT and it is coal, that is a political reality. So any global solution looking about the same economics. Wind is actually to climate change that does not address clean coal is only economic because the ROC—the Renewable not going to fly above those three countries. Obligations Certificate—actually gives you that Therefore, we as the UK should be saying how do we uplift energy. If that was not there clearly you would want to take advantage of that situation? The be investing in fossil fuels. Americans are spending a lot of money on clean coal Mr Marchant: I think the other question is, do you technology. My own view is let them and when they believe that we are into a period of sustained high are ready we will grab the technology and use it! I fossil fuel prices? And do you believe that oil and gas think the other thing we should be looking at as the will start to be priced as a scarce commodity? If you UK is carbon capture because for coal to be really do then every barrel we save is a good thing and clean you have to capture the carbon and put it every investment we make that saves barrels in ten somewhere, not into the atmosphere. Here the UK years’ time is a good thing. If you believe to the has a potential advantage. With the depleted North contrary, that the oil industry will continue to find Sea oil fields we actually have somewhere that that new fields of production then investment in carbon could be captured and I think that is the area renewables is not economic. So again you are talking in the value chain that the UK should be focusing on about very high level views about the future for the next 20 years. So therefore coal and gas can economics, which is again what I come back to. You have a long-term almost zero carbon, if you want it, end up saying, “I do not want to put all my eggs into future. We are waiting any day now for the DTI’s any of those baskets and some sort of balanced carbon capture strategy paper, and it may even be solution is probably the answer.” today—it is imminent—and again I am looking to that to see the UK stepping up in that area.
Q185 Mr MacDougall: Could there be a situation, Q187 Mr Sarwar: So do you think that the time is given the development in China and places like that, right to start rebuilding Scotland’s coal industry? that cost wise—for example, Scotland could try to Mr Marchant: Coal industry? supply its own energy within hydro power, or whichever one is acceptable, and I am not sure what Q188 Mr Sarwar: Yes. should be acceptable or not, to meet all the criteria Mr Marchant: I am not convinced about that. expected of that. Would that be an expensive source However, the fact that we have coal fired power having to meet it within Scotland alone, as opposed stations still producing I would not want to see them to within the UK? Or indeed would it be better in the all shut in 2015. Whether that means that coal can be longer term that we actually import all our energy mined here economically, I do not know. You are from a cheaper source and in that way give the way beyond my knowledge there. benefit to the users and that would be a much more Chairman: There is now a division in the House and economical way of supplying energy? Does that we shall suspend for 15 minutes for our Members to consideration come into it somewhere? participate in that division and we will reconvene Mr Marchant: You have to weigh up the cost and the at 16.18. security supply issues. There is a price. Many countries are dependent solely upon imported primary energy and their economies thrive. We have The Committee suspended from 16.03 pm to been well blessed in the UK for many years with 16.18 pm for a division in the House North Sea oil and I think we have got used to not asking ourselves that question or what that trade-oV Chairman: I think we stopped you in mid flow. is. We are now getting to the stage where we do. Again, from my own personal view I would not want Q189 Mr Sarwar: Do you believe in rebuilding to be in a position where I was importing all of my Scotland’s coal industry? energy, but I would not mind, as long as I have a Mr Smith: The big issue for coal power generation balanced range of sources—and I would not want to in the UK is the Large Combustion Plant Directive, be dependent on any one country or any one fuel— which comes into force in 2008 and that actually a balanced range of fuels, diVerent infrastructure, I drives all the coal generation plant to operate at a have diversity, I am not going to be worried if I am very low sulphur emissions environment. Scottish importing maybe a significant proportion. and British coal by nature is very high in sulphur. The only way you can run those coal stations is if you have flue gas desulphurisation fitted to the back Q186 Mr Sarwar: Your submission seems to support end of the coal plant. So there is a large decision to the idea of “green coal”. Do you consider that coal be made between now and 2008 for about 18 does indeed have a future, despite the industry being gigawatts of coal plant that has opted out of the rundown over recent years? Large Combustion Plant Directive, is it going to fit Scottish Affairs Committee: Evidence Ev 47
1 March 2005 Mr Ian Marchant and Mr Paul Smith
FGD or not? If it does not then it is eVectively going July—up to last year we were just a gas and hydro to have to reduce its load factor by a half because it generation—and we bought 4,000 megawatts of this is limited by the number of running hours to 20,000 old coal from American companies who were exiting between 2008 and 2014 when it must shut. Currently the UK market. They had decided to opt out; they around 30% of the UK’s energy is provided by coal were not going to fit that equipment. We are re- generation and there are only a handful of plants examining the economics of that decision and it is that have flue gas desulphurisation fitted. So there is clear to us that is firstly a very marginal decision. The going to be a large drop oV and that is why second thing that is also clear to us is that with the Cockenzie, which does not have flue gas sulphur content of UK coal, even fitting the FGD desulphurisation, and Longannet, will obviously be equipment, it would not work because the size of the aVected by that. So to answer the question, it is likely plant that you would have to build would be so that the bulk of the coal burnt in the UK will come much greater that it would become a decision that from imports. you would not do. If you are going to shut the plant in 2015 you will not do it. So even if you fit FGD Q190 Mr Sarwar: Which countries do you think will equipment I still do not believe that leaves a future import this coal? for UK mined coal of sulphur content of the sort of Mr Smith: Russia, Australia, Indonesia, Columbia, 2, 3%, the sorts of numbers that UK coal has. You are talking about low sulphur coal of about 0.4, South Africa. V Mr Marchant: At the moment South Africa is 0.5%, so a significant di erence. My own view is that probably one of the main suppliers. Indonesia has I think the UK coal industry, in a sense, we have had very low sulphur coal and under the old Large that benefit over the last 200 years and it is not going Combustion Plant Directive it is very attractive. The to contribute for the next 200 years. trouble is that UK coal is very high sulphur and it is very diYcult to see a future for UK-mined coal. Q192 David Hamilton: It puzzles me because we are Mr Smith: The Drax power station in North talking in terms of the amount of coal that we have Yorkshire is the largest coal fired station in Europe in the UK, which is substantial, irrespective of the and it is currently burning British coal and British demise of UK coal—not UK coal generally but UK Coal have just announced that they cannot supply Coal Company. In Scotland Scottish Coal produced the quantities of coal because of geological problems eight million tons of coal a year, opencast. The with their mine. planning applications that are being looked at at the present time are being changed by the Scottish Q191 David Hamilton: Thank you, Chairman. My Executive, which actually mitigate against Scottish apologies for being late. Can I follow on the coal because planning applications will be much more diYcult to get, as I understand it, than they discussion that we are having in relation to low V sulphur content? Scottish coal has a lower sulphur have been up to now. They will have a di erent content than English coal; I say that for a start. But planning application to that of wind farms and it is the adaptation that is required to be made within the much easier to get a wind farm than to get Scottish power stations will be forthcoming if there is a long- coal, although the population may object to both. term viability proposal for coal in the UK. My The issue that I come back to is why would we as a understanding is that the UK power suppliers have nation throw away something that we have in indicated that they will not invest substantial abundance, and that is coal? You are basically amounts of money on adaptation to try to achieve saying to me that irrespective of the British the low sulphur content, the carbon dioxide content, requirements we should not and cannot under the unless the Government in some way or another talks present regime take any of the British coal because in terms of allowing a long-term future for British of the sulphur content being too high. Mr Smith: I can clarify that. There are power coal. If we start importing coal from other areas and V 30, 35% of it needs energy for coal, that defeats the stations, Drax and Radcli e in Nottinghamshire, very purpose that we are trying to achieve, and that who have FGD units fitted, which were sized based is self-suYciency of energy within the UK. Surely on the high sulphur content of British coal, so they there is a contradiction there? will continue to run and continue to consume British Mr Marchant: I think one thing you have to think coal. The existing power stations that do not have about from a global point of view is that there is five flue gas desulphurisation must fit that in order to not times as much coal as there is gas. So if you were be one with the constraints from 2008 onwards. In going to put your eggs in one basket you would put the market place they are looking at it from a market it into coal. On a global security supply issue you point of view, they would not fit FGD sized on have to keep that into eVect. The fact that coal is also British coal because it is just marginal based on coming from diVerent countries as well, so a power prices going forward. geographic diversity. Only Russia is in a sense on the same list. Gas will come from Norway, Russia, Q193 David Hamilton: So it comes back to Algeria, whereas the coal, as we have said, will come economic outlay. from Russia, South Africa, Columbia, Australia, Mr Smith: Yes. potentially American companies who were exiting Mr Marchant: It comes back to there are constraints the UK market. So there are some definite diversity laid down by EU law and the Large Combustion issues there. I think the issue about fitting FGD, the Plant Directive, and when you factor in the green coal, we bought some coal plant last year, economics that gives then you would not invest to Ev 48 Scottish Affairs Committee: Evidence
1 March 2005 Mr Ian Marchant and Mr Paul Smith burn more British coal. If you have previously Q200 Mr Carmichael: On carbon capture in fact, invested and can burn it you will carry on burning it, presumably you are talking about something which but you will not invest to burn more. is similar to the Enhanced Recovery Operations where the gas coming from the North Sea is pumped down to extract it? Q194 David Hamilton: Unless there was a policy of Mr Marchant: Yes. secure energy for the UK, and coal must be part of that? Mr Marchant: Yes. Q201 Mr Carmichael: I am aware of some work— and it is fairly Blue Skies, if I can use the term—being done at Imperial College London on that. I am not Q195 David Hamilton: When you indicated the aware of it being financed or promoted in the various coals that could come in from around the research project that I have come across. What is world, does that include Polish coal? your assessment of the timescale for that to be Mr Marchant: It could do. commercially applicable? Mr Marchant: I think that we are talking a ten-year Q196 David Hamilton: Because I imagine the EU type of time for it to be fully commercially deployed. might change their rules again to placate our Polish It has a potential to be a major contributor to our colleagues because of the size of their coal industry. 2015 debate that we were having, nuclear, Mr Marchant: One of the interesting debates is that renewable, old coal, and clean coal I think has a part about 20 gigawatts, which is about 25% of the UK’s to play. It is not going to solve the problem next year, capacity for generation, will shut in 2015. If that is but hopefully we can see demonstration of scale the case will the lights go out or will the rules be within the next few years. That is the key, once you changed? That is the other half of your question. have the first one or two plants actually up there on a reasonably sizeable scale working. Because the technology exists. We could go and buy in small Q197 David Hamilton: Can I come back again, scale today to get it through to the next stage. I am Chairman? We will have a debate in relation to starting to have some interesting discussions in that nuclear, which will be the big one, but there will also area and I will make sure that I firstly find out what be a debate about all the reserves that we potentially Imperial College are doing as well. have. Contained in that debate would it be appropriate—and I am quite sure you will do this Q202 Mr Lyons: On the question of the FGD units, because you are a multi-company now—to ensure you say it becomes uneconomic if you have to invest that your voice will be heard along with Scottish in that. If the Government were to invest in that with Power and so on to ensure that there is an argument coal, would that make a diVerence? there for the coal industry of the UK? Mr Marchant: It depends how they invest in it, as Mr Marchant: Having bought these two coal fired they do not own any coal fired assets. stations it is a bit like I have got religion on coal and I now make sure that my voice is heard long and loud on the subject because it made me look at my Q203 Mr Lyons: In terms of giving assistance to industry in a diVerent light. The one thing I always people looking to reduce carbon? come back to is 200 years of global coal reserves and Mr Marchant: If they gave either capital grants or 38 years of gas and say, “Hang on a minute, you some sort of assistance, yes, but from where we sit, have to have a balance of those two,” and I know having another look at that issue, it is a marginal which side I would bet on. So, yes, I think that we decision. You would not need to pay 100% capital have to continue having debates about a balanced grant before it would be worth doing. To be honest energy solution, which comes back again to the I have never thought I could go and ask Government carbon capture because the way that you can solve a for such a grant—maybe I should. Obviously that lot of the coal issues is if you can get the carbon does not aVect Scotland because my plants, one is capture to work and you then start to get a solution just outside Liverpool and one is in Yorkshire. that maybe ticks all the boxes. Q204 Mr Lyons: You talk about the Scottish coal and the high sulphur content that is in the coal. Is Q198 David Hamilton: One final question, Chair, there any research or approach in terms of burning and it is a diVerent one. You may not want to answer something with coal that will reduce the sulphur this, but do you think it is fair that the Scottish content? Executive are working on the basis that they are Mr Smith: Currently on our two coal plants we are going to mitigate against certain fossil fuels and burning biomass, which is basically palm kernels, all allow planning applications to go through rather of residues from the third pressing and woodchip easily in relation to wind farms? and that obviously has a carbon reduction because Mr Marchant: I tell you, I do not find the planning it is carbon neutral and it also tends to give the heat process on wind farms at all easy. It is not easy. without sulphur, although some biomass does have sulphur content. That is the only potential fuel. You Q199 David Hamilton: It will be easier than coal can have gas over burn, which takes sulphur out and anyway. gives you heat but then you are actually eVectively Mr Marchant: I have never tried to permit for coal converting your coal station into a gas fired power but I have wind, and I tell you it is not easy. station. Scottish Affairs Committee: Evidence Ev 49
1 March 2005 Mr Ian Marchant and Mr Paul Smith
Q205 Mr Lyons: So eVectively a mix of biomass Q208 John Robertson: Moving on, what are your and coal. thoughts on the UKAEA’s comment that nuclear Mr Smith: It gives you some. There are two fusion might be a viable energy source in about 30 fundamental issues here. One is Large Combustion years’ time? Plant Directive, which comes in in 2008, is very Mr Marchant: Can I ask the engineer sitting at the much controlling your sulphur dioxides and your table to have a go at that one, because I am interested nitrous oxides. You then have the Kyoto Protocol in the answer! and all of the other things which the climate change Mr Smith: I attended a presentation by Sir David issue is driving, which is about reduction of carbon King, Chief Scientific Adviser to the Government, dioxide. The Large Combustion Plant Directive is and he was certainly talking favourably of that but not carbon dioxide, that comes later. he believed it is a long way away. He actually put Mr Marchant: About 6% biomass burn currently at forward projections from the Government in terms our power stations. of 2020, he is looking at the energy mix being 60% Mr Smith: By weight. from gas fired power stations and the rest from Mr Marchant: And we are investing £20 million to renewables, predominately wind onshore and increase that, which is enabling us to extend the life oVshore. Coal was not there, nuclear was of those coal fired stations anyway, and you will find disappearing, but he was then showing maybe 10% again that Scottish Power are doing the same at or so going forward. So I think it is a long way away. Cockenzie and Longannet, but that at this stage not going to tilt the decision one way of the other, but Q209 John Robertson: We talked about a secure it helps. balance policy for energy. Do you think that there is Mr Smith: The one other point that is worth a place for nuclear even today? pointing out is that the other bit of legislation that Mr Marchant: Yes. you need to be aware of is the Integrated Pollution Prevention Control (IPPC). That is also Q210 John Robertson: And that we should go constraining power generation in terms of sulphur forward with that as part of the balance? bubble. Mr Marchant: Again, I mentioned earlier, my own Chairman: Moving on from coal, you will be glad to personal view is we have to wait the issue out before know. John Robertson. we build new nuclear, but we should certainly be looking at extending the life of what we have, if that Q206 John Robertson: Thank you, Chair. My is economic to do. apologies as well for being late. One question relating to biomass. We took the evidence of Q211 John Robertson: You maybe mentioned this Professor Lovelock last week and very interesting it earlier on, but what sort of time are we talking was too, and he basically said that he would not about? In the United States they talk about 20 years. touch biomass at all because nobody has done any When we talk about extending the life in this country investigation and work on the kind of eVect it it is five years. actually has into the atmosphere or into the ground Mr Marchant: As I understand it, and this is a itself. Do you know anybody who has done any question I asked the Trade Association in America, experimentation or checking to see if there are any the plant was fundamentally designed diVerently 30 problems in the increased gasses that would be odd years ago. The American plant is a diVerent created? design and had a diVerent philosophy from day one. Mr Marchant: I am not aware of anything. They were permanently replaced. The UK plant was V Mr Smith: Combustion gases are CO2. built di erently and therefore it has a finite life. That Mr Marchant: We have to get a permit from the was what the nuclear experts were telling me. Environmental Agency in England and Wales. We Mr Smith: British Energy have issued statements to V have to run pilots before we can burn any sort of this e ect—and we would have to ask them the exact material. It is not a free-for-all; you have to go answer—but the graphite core of the reactors are through some quite stringent hurdles. actually cracking on a large number of the stations, John Robertson: It came as quite a shock to us last which will potentially reduce their life, and if the week when he said it and I thought I would throw the reactor gives way then that will reduce the overall life question in to see if anybody else had looked at it. of that, and it is based on a three-year cycle. John Robertson: So the five years is probably about right. Q207 Chairman: I think his other concern was the amount of land that would be taken up building Q212 Mr Weir: Your memorandum sets out a plants for this particular project and the eVect it sobering scenario in many ways with the gradual would have on the natural environment. closure of power stations, questions about the Mr Marchant: Again, it is one of these things that it viability of renewable resources, but it ends is exactly the same argument for onshore wind. If optimistically in the assertion that none of it is you set a large requirement then the counter unavoidable. Then you mention your favourite topic arguments are very strong, but it can have a role. I of this afternoon, transmissions charges. What think biomass and energy crops can have a role in benefits do you think could be achieved by a review both supporting the agricultural economy and of the transmission charging scheme and what do helping to reduce our CO2. you think is the outcome if it is not reviewed? Ev 50 Scottish Affairs Committee: Evidence
1 March 2005 Mr Ian Marchant and Mr Paul Smith
Mr Marchant: The outcome, if it is not reviewed, as only for ten years and for the emergent technologies, I have portrayed it, is that Scotland’s energy mix is marine, deep oVshore, wind—we have not talked driven increasingly to a renewable, and whatever about deep oVshore today—it is too short because that is from a UK perspective it will have more than you are only at the end of your demonstration phase its fair share because it is rich in it. But Scotland will and you are looking to deploy a 20 and 30 year be an energy importer and will not have indigenous project just as the capping regime comes to an end. fossil and nuclear generation. I think that some The risk with the way the model works is if you have element of locational charging in transmission a capping regime then it encourages even more pricing is sensible so there are some economic signals extreme prices when you come out of the cap, just about distance between demand and supply. But I because of the way the model works. The more think the economic signals are very extreme, are generation there is in an area the higher the prices go. very, very marginal. That is as I understand this model works and, as I said, it is very, very complicated. It is very unstable and it is very, very marginal. The odd 100 megawatts of generation moves the slope of the line quite significantly and I Q216 Mr Weir: Am I right in understanding that the think what we need are more moderate locational cap runs for a specified period so that only those up signals, stable transmission prices, that people make and running at the beginning get the full benefit? sensible investment decisions. I think transmission Mr Marchant: Because the cap does not exist I do pricing is so fundamental that it has to be reviewed not know. You may be right. All I know is that it has in the light of overall public policy on energy as well a ten-year period. I do not know what happens to because the transmission network is the core energy projects that come on in those 10 years. I had that drives the fuel diversity issue in the long-term. assumed that they would get nine, eight, seven, however many years left. I had assumed that, but on Q213 Mr Weir: Is it your understanding of the an onshore wind farm you are talking of a 15 or 20 proposals that they take any account of the year life of which you are looking at the economics. locational imperatives for renewable energy? We are So even 10 years is going to have a dent on the end talking about wind and wave. of it. Mr Marchant: They take no account of that at all—none.
Q214 Mr Weir: So would the net eVect be that any Q217 Chairman: Are there any other beneficial new generation is likely to be in conventional rather reforms that you would like to see introduced? than renewable, if you follow it to the logical Mr Marchant: In the energy sector? I want to come conclusion? back to the demand side because it is very easy, Mr Marchant: Not necessarily because you have the because the generation industry is the one that renewable obligation driving your policy from a attracts attention because it is going to be big assets diVerent point of view. You have two things driving and big decisions. That is only half the issue, the you to diVerent answers, so you still can get other half of the issue is from the demand side and renewables built but that means you do not get fossil the customer side, and I would like to see more done generation build in Scotland. That is the logical to encourage investment and creativity in the energy consequence of it. It is not possible therefore to say eYciency demand side. If I could give you a couple that you will not get renewables but it is possible to of examples? Installing rooftop wind turbines on say that less will get built than would otherwise be rural properties can make a significant diVerence to the case because the marginal project, whatever that fuel poverty. It would be great if you could also use happens to be, will not get built with the higher price. those to eVectively claim energy eYciency credits But you cannot say that nothing will get built. You under the EEC scheme. It is a relatively minor thing see that and the amount of appetite for onshore and that could give a real boost to an emerging emerging technologies is still as high as ever, the technology that is actually coming out of Scottish economics are still there for the early projects. That universities. And manufacturing could also be based will change; it will dampen enthusiasm in the later there. So that is a very minor thing. Another years. example is a whole promotion of energy eYciency. I believe that Government should look at something Q215 Mr Weir: As I understand the Energy Act like a Social Obligation Certificate. We have talked there is a cap on the transmission charges for about Renewable Obligation Certificates—ROCs— renewables for a specific period. Will that help initial so why not SOCs to actually encourage companies projects and what eVect will it have on future like my own to really invest in energy eYciency in a projects? very significant way and make it a business Mr Marchant: There is the power to cap rather than opportunity? Then we will go for it. So I think there the actual caps. The Government has the power. I are some policy reforms in particular on the social am not sure it wanted the power but the House in its obligations, and I am happy to let the Committee wisdom decided to give it the power. My have some of our detailed thoughts on that, which understanding is that they are reluctant to use that we have not submitted, but which I think people power, partly because they would rather see an might find interesting. So if you are happy I will enduring long-term solution. The capping power is submit that supplementary work. Scottish Affairs Committee: Evidence Ev 51
1 March 2005 Mr Ian Marchant and Mr Paul Smith
Q218 Chairman: Gentlemen, that concludes our Mr Marchant: I think we have had a very questions to you this afternoon. Can I thank you comprehensive view of the energy industry today, so once again for coming along. Is there anything else thank you. you would like to add in conclusion, that we may not Chairman: Thank you very much again for your have covered with our questions? attendance.
Supplementary memorandum submitted by Scottish and Southern Energy I am writing to thank you for giving Paul Smith and me the opportunity to give oral evidence to the Select Committee on 1 March. I am also grateful to you for being so understanding when, despite our best endeavours, we arrived a few minutes late. At the end of the session, you asked if there were any areas we wished to highlight in addition to those discussed during the evidence session. I mentioned two: the role of micro generation technologies in the context of the Energy EYciency Commitment and our proposal for a “Social Obligation” scheme and I undertook to write to you with some further information.
The Energy Efficiency Commitment
Under the Energy EYciency Commitment, over the next three years, we expect to help around 250,000 priority households to lower their energy bills through the provision of free loft and cavity wall insulation. But there is much more that could be done. Some newer technologies can now be included in suppliers’ energy eYciency programmes, such as micro Combined Heat and Power. But others, like rooftop wind turbines, are not. SSE part owns an Edinburgh-based company, Renewable Devices Swift Turbines Ltd, which has developed what is believed to be the world’s first feasible rooftop-mountable wind energy system. It is designed to be quiet running, planning compliant and capable of providing around one third of the electricity needs of a typical semi-detached house. While I don’t quite subscribe to the view of one commentator who said that without proper support micro wind turbines will “remain oddities, used only by cranks”, consideration needs to be given to how these technologies can be more clearly aligned with EEC. They could, for example, be included in suppliers’ energy eYciency programmes for a given period of, say, three years to help them fulfil their undoubted potential to help meet Scotland’s future energy needs. If the Committee has time, therefore, I would encourage it to examine the development of micro generation in Scotland and to look at what could be done to make sure that the developing technologies are able to play their full part in meeting the country’s electricity requirements.
Social Obligation Proposal
I have no doubt that greater energy eYciency is the best response to the issues set out in the Energy White Paper. For example, the fight against fuel poverty needs to become energy eYciency based. In line with that, we have developed a proposal for a Social Obligation, modelled on the Renewables Obligation. This has been developed because we do not believe that piecemeal schemes, however valuable in themselves, are the way to tackle the core problems. We believe that fuel poverty is a fundamental issue that requires a fundamentally diVerent approach than we have had up to now. The scheme we envisage would involve combining Warm Front (or Warm Deal in Scotland) and the social aspect of the Energy EYciency Commitment into a single “Social Obligation” on energy suppliers. Suppliers would be set annual targets for bringing a number of ineYcient properties up to an agreed standard for energy eYciency. Each property brought up to the agreed standard would earn the supplier a “Social Obligation Certificate”. Any supplier failing to meet its target would pay a “buy out” cost—or fine—for each property not improved. The buy-outs would be recycled to suppliers with SOCs according to their relative success in meeting their targets. Modelled on the Renewables Obligation, this scheme would provide an incentive for energy suppliers to be innovative and creative in tackling energy ineYciency and thus fuel poverty. We have been promoting this scheme in government and elsewhere for some time now. Our belief is that it represents a radical solution to a very tough problem, and we will continue to promote it. Ev 52 Scottish Affairs Committee: Evidence
Summary I can provide additional information on both of these points if that would be helpful. In the meantime, 1 would like to re-state my thanks to you for the opportunity to give oral evidence on 1 March. Both Paul and I enjoyed what was a stimulating and wide-ranging discussion. Ian Marchant Chief Executive 11 March 2005 Scottish Affairs Committee: Evidence Ev 53 Written appendices
APPENDIX 1
Letter to the Committee from Stuart Young
MEETING SCOTLAND’S FUTURE ENERGY NEEDS I am pleased to submit written evidence for the Committee’s consideration in response to its invitation. I am a self-employed Construction Consultant from Dunnet in Caithness and my work is generally concerned with assisting Dounreay Nuclear Establishment in their decommissioning. I have done considerable research into energy requirements and how they can be met. I am not an expert, and I do not represent any organisation. I do know that my views are representative of almost all I have discussed the matter with, and given my connection with Dounreay, I have access to many knowledgeable and expert views. The Introduction to my Submission serves as a resume´ of the topics covered, all of which I believe to be germane to the Committee’s deliberations. While my submission is self-contained, I would welcome the opportunity to give oral evidence and answer any questions the Committee might have. 5 January 2005
1. Introduction 1.1 I am a self-employed Construction Consultant, and a resident of Dunnet in Caithness. I run my business, which is focused on aiding Dounreay’s decommissioning eVort, from an oYce in my home. 1.2 I have recently become aware of the nature and scale of proposals for onshore wind generation. I have attempted to inform myself of the environmental, social, and economic consequences of large-scale wind farm development with particular reference to its implications for Caithness, and through this have come to some conclusions on how future energy output can be met once nuclear power no longer provides Scotland’s energy needs. 1.3 The evidence I wish to present is not expert. It is a common sense interpretation of information in the public domain, and my views are subscribed to by many clever people I have spoken to in my search for information and understanding of our energy requirements.
2. Subject Matter I wish to present my findings and conclusions to the Committee under the following headings: — What is a typical wind turbine? — Why we need geographical diversity. — What is a large windfarm on a national scale? — What is a large windfarm on a local scale? — Surely a few turbines here and there won’t make much diVerence? — So what would be the consequences? — The first thing to be done. — The next thing to be done. — Some observations on management of waste. — Alternative energy sources. — How future energy output can be met once nuclear power no longer provides Scotland’s energy needs. — What are job prospects after Dounreay? — Conclusion and recommendation.
3. Submission
3.1 What is a typical wind turbine? Through examination of available information on a number of proposals in Caithness, a pattern emerges which indicates that a reasonable size of turbine to consider as representative is: — One with a turbine height of 70 metres and rotors of 80 metres in diameter, a total height from ground to tip of 110 metres. Ev 54 Scottish Affairs Committee: Evidence
— It would have a capacity of 2.5 Megawatts, but it would generate to that capacity for a relatively small proportion of the time. — For illustration I propose to use one third of the time, although I have heard figures of 24% and 27% being used with authority. — It would typically be 350 metres distant from its neighbours, therefore occupy a space of 350 metres square. This is the equivalent area of almost 25 football fields 100 metres long by 50 metres wide. — It would be linked to its neighbours by an unsurfaced track and would have a substantial hardstanding adjacent to it for construction purposes. Say the equivalent of a half kilometre of new track per machine. — It would require little hands-on attention after commissioning. One person looking after two wind farms each of 40 turbines seems a reasonable expectation.
3.2 Why we need geographical diversity? To harness the capacity of a solitary wind turbine, then two other wind turbines are required, each in a diVerent geographical area. This is because the wind either does not blow enough all the time, or it blows too hard some of the time, and the turbine has to be shut down. As the wind will generally always be blowing somewhere, and provided there are suYcient turbines distributed nationally to capture all wind conditions, a degree of security of supply can be anticipated in normal conditions. Therefore to harness the rated capacity of any one wind farm, two other similar wind farms will be required elsewhere in the country.
3.3 What is a large windfarm on a national scale? Hunterston B Nuclear Power Station, which is among those soon to be decommissioned, has a capacity of 1,288Mw. Just to replace this resource with onshore wind would require something like 1,546 new turbines dispersed across the country. This would occupy a gross area of land of just under 190 square kilometres, or 75 square miles. It would require the construction of 723 kilometres of access track. It might provide 20 full time jobs after commissioning. Torness at 1,364 Mw is proportionately larger: — 1,639 new turbines. — 201 square kilometres or 79 square miles of land. — 766 kilometres of access track. — Perhaps 21 full time jobs. Both combined would occupy a gross area greater than that to the north east of the Wick to Thurso road, but of course they would have to be located uniformly throughout Scotland to capture the necessary diversity of wind conditions. This is large-scale on a national scale.
3.4 What is a large windfarm on a local scale? The Dounreay Prototype Fast Reactor, one of the smallest British nuclear power stations built, if not actually the smallest, was rated at 250 Megawatts, or the equivalent average generation of 300 wind turbines of 2.5 Mw capacity. Twenty-two wind farm developments are at some stage of evolution in the Caithness area at present, totalling some 386 turbines (which of course would require 772 others else where in the country to provide the rated supply). Please see Illustration No 1 which shows windfarm development proposals in this area as known at 23/11/04.1 Construction News recently published the figure of 94 wind farm projects UK wide “in the pipeline” ie not under construction, and without planning permission yet. Of these, 19 are in Caithness. That is 20% of the nation’s windfarms “in the pipeline” in Caithness. That is disproportionately large on a local scale.
1 Not printed. Scottish Affairs Committee: Evidence Ev 55
3.5 Surely a few wind turbines here and there won’t make much diVerence? The following scenario is as I would be aVected, but similar situations will exist across the country. Caithness is a low-lying county, with long views. For example, from my oYce window, at an elevation of 25 metres above sea level I could clearly see at the time of writing: — Scaraben, near Berriedale, 48 kilometres away. — The radio masts and Ben-a-Chielt at Latheron, 33 kilometres away. — Ben Griam Beg, 49 kilometres away. — Ben Klibreck, 74 kilometres away. — Ben Loyal, 62 kilometres away — Ben Hope, 77 kilometres away. Please see Illustration 2 which shows sight lines to the places mentioned.2 A typical turbine is 70 metres to the hub with 40 metre long rotor blades, a total of 110 metres high. In the northeast corner of Caithness, there is very little land above the height of 110 metres above sea level, and the proposed turbines would occupy the higher ground. There is nowhere to site a windfarm which would not have an overwhelming impact on the visual environment. There is no opportunity for “sensitive placement” of turbines. Please see Illustration 3 which shows the areas of Caithness which do not reach an elevation of 110 metres above sea level.3 From my oYce window I would see at least parts of: — Durran Windfarm 10 kilometres away (25 turbines, all visible). — Spittal Hill Windfarm 16 kilometres away (47 turbines, all visible). — Buolfruich 37 kilometres away (15 turbines, layout unknown, say 50% visible). — Dunbeath 42 kilometres away (25 turbines, layout unknown, say 20% visible). — Lieurary 16 kilometres away (3 turbines, all totally visible). — Baillie 20 kilometres away (20 turbines, 19 visible). — Broubster 21 kilometres away (58 turbines, layout unknown, say 50% visible). Step up to the road at my front door and: — Scoolary Windfarm 7 kilometres away (48 turbines, all visible, several from my kitchen). Illustration 4 shows sightlines to the prominent windfarm locations as viewed from my home.4 Illustration 5 shows how Scoolary Windfarm would look from our local tourist attraction, Mary Ann’s Cottage, about 300 metres from my home.5 (Our other local tourist attraction, the Castle of Mey, would be totally dominated by Scoolary Windfarm.) Illustration 6 shows Durran and Tister Windfarm, and Spittal Hill Windfarm as they would look from my home.6 Illustration 7 shows how Lieurary Windfarm would look from my home.7 Illustration 8 shows how Baillie Windfarm would look from my home.8 The committee might think that I am adopting a “not in my backyard” attitude, but it is everyone in Caithness’s backyard. Every community would be dominated by windfarms, if not by those listed above, then by others of the 22 potential windfarms currently in the pipeline. Even if only 25% of the proposed developments were to go ahead, windfarms would become the dominant feature of a landscape prized for its “skyscapes”. The visual amenity of a whole county would be sacrificed and less than one third of the capacity of one small nuclear power plant would be replaced.
2 ibid. 3 ibid. 4 ibid. 5 ibid. 6 ibid. 7 ibid. 8 ibid. Ev 56 Scottish Affairs Committee: Evidence
3.6 So what would be the consequences? Caithness depends on Dounreay and tourism. Dounreay will employ fewer people year by year so it is essential that tourism is nurtured, and I cannot subscribe to the view that people will come to Caithness to see windfarms. Windfarm is actually a euphemism for Electricity Generation Industrial Estate, and there will be plenty of these to see much nearer folks’ homes than Caithness. Orkney will lose its attraction to tourists through windfarm development so even the “passers-through” will diminish in numbers. With no Dounreay and a failing tourist industry, Caithness faces a bleak prospect of rising unemployment, rising migration from the county, falling house prices and empty properties, and nothing to keep young people here. And this is entirely outwith our own control.
3.7 The first thing to be done By virtue of the 1989 Electricity Act, planning decisions for windfarm developments over 50 Mw are made by the Scottish Executive, which makes no secret of its appetite for windfarms. The scoping report for Spittal Hill Windfarm lists 33 organisations to be consulted during the Environmental Impact Assessment, and a further 17 to be consulted by the Scottish Executive. Of these, only Highland Council might speak up for the people of Caithness and for our future generations. One voice in 50 is unlikely to make an impact. We have been eVectively disenfranchised. We can exercise our democratic right and vote out one Lib Dem MSP, and one Lib Dem MP who has no sway in the Scottish Parliament, neither action being likely to influence the Scottish Executive. The future of renewable energy generation is of national importance, and it is right that the Scottish Executive control the wider issues. It is not right that they decide on individual windfarm applications. These are local matters. The terms of the 1989 Electricity Act must be altered to return local planning issues to local control where the electorate can hold local councillors accountable, and where the people will have a voice.
3.8 The next thing to be done Remove the artificial motivation for the proliferation of inappropriate windfarm proposals, and the grant schemes which actually act against the objectives of reducing harmful emissions. — Repeal the legislation which allows the trade in Renewables Obligations Certificates without any obligation to supply electricity from renewable sources. — Remove incentives to reduce hydro-electric generation to bring individual schemes down to a grant aided threshold, which actually reduces genuine renewable energy generation. I apologise to the committee for being unable to supply references for the foregoing, but as Members have better access to research than me, they will not find it diYcult to identify the source legislation and incentives.
3.9 Some observations on management of waste I can provide no technical input to the management of nuclear waste, but I strongly believe that waste should be dealt with where it is produced, and not given to others to deal with. One thing is sure. A community being asked to accept waste from elsewhere will produce a much stronger case than the community from where it comes. Caithness in general is comfortable with nuclear issues, and most people here, I believe, would accept that Dounreay waste issues should be dealt with by Dounreay.
3.10 Alternative energy sources Again, I can provide no expert advice, but I would oVer the following observations: Coal. Not readily available and a proven greenhouse gas emitter. A good technical source of power, but no longer acceptable as a main source of core generation. Oil. Resources under British control are limited and there is no reliable long term source of supply. A greenhouse gas emitter. Gas. Resources under British control are limited and there is no reliable long term source of supply. A greenhouse gas emitter. Scottish Affairs Committee: Evidence Ev 57
Biomass. I am not sure that I understand this term, but presumably timber is a large element. King Henry the Eighth’s naval building devastated England’s timber resources, so I do not think our forests will last very long used as a principal source of power generation. Having said that, there is clearly a place for such sources on a local scale, and it is happening now in Wick. Photovoltaic. I understand this to be photo-electric cells. There is clearly a place for this in the overall scheme of energy supply, but it is never going to play a large part. On-shore wind. I believe that onshore wind generation is basically a sound source of energy in the right circumstances. My view of the right circumstances is where: (a) the source of supply is close to the point of need; (b) the turbines become part of the landscape; and (c) where it is acceptable to the local community. Oddly enough, these are the general requirements of Legislation and Guidance to Planning Authorities. OVshore wind. This is more environmentally acceptable from a visual impact point of view, particularly the further oVshore the turbines are located. OVshore generation will suVer the same low operational time problems and will be much more costly than onshore to construct and maintain. There is still the problem of the sheer numbers required to provide substantial contribution to our energy requirements. Wave power. This would have the same limitations of wind power in that its availability cannot be guaranteed so many sources from diverse locations would be required. Also, where the best waves are found, so are the most demanding structural requirements. Tidal power. This is a very attractive option for me. Subsurface turbines would not suVer the same stresses as surface installations. The tide can be predicted and relied upon twice a day. It comes at predictably diVerent times all round the coast. But it is more likely that the source of generation will be remote from distribution facilities and it will therefore be costly to install the infrastructure and fund the distribution. Nuclear. No longer politically acceptable.
3.11 How future energy output can be met once nuclear power no longer provides Scotland’s energy needs I have no answer to this. — Fossil fuels are limited and damaging. — Minor sources such as biomass and photovoltaic are eVectively fringe elements. — Onshore wind can never provide enough power, and the scale of building will at some time or other become unacceptable to the public and therefore to politicians. —OVshore wind would be more acceptable to the public but too expensive to have as our principal source of generation. — Wave power is unlikely in my view to make more than a nominal contribution. — Tidal power seems to me to be a good bet but installation and distribution costs will probably confine it to limited locations. It is unlikely to be a major contributor to our energy requirements. In any case, development lags long behind our needs. — Imported power might solve short-term problems, but would be hugely risky as far as long term political relationships are concerned. Furthermore, a main power artery would be at grave risk from terrorist attack. — Nuclear is politically unacceptable. Nuclear is also the only realistic way in which the UK can become self-reliant on its generation requirements, and it is eYcient, reliable, and, I believe, cost-eVective. A modern plant built today will not have the decommissioning costs associated with early-day plants like Dounreay because that is where the investment for the future was made, and we shouldn’t throw it away.
3.12 What are job prospects after Dounreay? Without a major change in the way we are heading, there are very few prospects for Caithness, but if we can preserve our environment from inappropriate and ineVective windfarm development, and retain our responsibility for dealing with our own waste, both nuclear and non-nuclear, then we can improve the general prospects over a longer period. Ev 58 Scottish Affairs Committee: Evidence
4. Conclusion and Recommendation I believe that we have no alternative but to place our reliance for electricity generation on nuclear sources. I believe that power should be generated near its point of requirement, but I also believe that the social, economical and environmental benefits from a new nuclear power station in Caithness would more than overcome the disadvantages. A new nuclear power station in Caithness would provide substantial employment and economic stability for many years. 5 January 2005
APPENDIX 2
Letter to the Committee from Confederation of UK Coal Producers
MEETING SCOTLAND’S FUTURE ENERGY NEEDS The Confederation of UK Coal Producers (CoalPro) represents member companies who produce over 90% of UK coal output. I understand that the Scottish AVairs Committee welcomes written evidence on, amongst other issues, how the shortfall in energy output can be met once nuclear power no longer provides Scotland’s energy needs. CoalPro assumes from the above that the Committee has concerns about the provision of adequate electricity supplies in Scotland following the closure of the Hunterston and Torness nuclear power stations which is expected to take place before 2020. However, CoalPro believes that these concerns are likely to underestimate the extent of the problem as, under the Large Combustion Plants Directive (LCPD), decisions taken by Scottish Power are likely to also lead to the closure of both of Scotland’s coal-fired plants, Longannet and Cockenzie, by 2015. The LCPD requires operators of coal-fired power plants to meet stringent emission limits for sulphur dioxide (SO2), oxides of nitrogen (NOx) and dust from 1 January 2008 onwards. Operators can “opt out” of the Directive in respect of any individual power station, in which case the operation of individual generating units will be limited to a total of 20,000 hours (less than 2° years of continuous running) after which they will have to close. Closure is required in any event by the end of 2015. In addition to these operating restrictions, plants would still have to meet emission limits under the IPPC regime. Scottish Power have chosen to opt out both the Longannet and Cockenzie power stations under the LCPD. Whilst they have up until 30 June 2005 to reverse this decision, it is considered unlikely that they will do so. This means that both these power stations will have to close by the end of 2015 and that each unit thereat can only operate for a total of 20,000 hours between 2008 and 2015. The position could yet be worse. If, having used up a proportion of the 20,000 hours, any of the units at either of these stations requires major expense, then the question will inevitably arise as to whether such expense would represent a viable proposition in the light of the remaining available operating hours. Premature closure of some, or all, of the generating units at the stations is therefore entirely possible. The overall impact, therefore, is that at some time between 2010 and 2020, the great majority of Scotland’s electricity generating capacity will close. The remaining capacity will comprise hydro and renewables, the gas-fired power station at Peterhead and certain CHP installations. The Scottish Executive has an objective of generating 40% of its electricity from renewable sources by 2020. Even if this ambitious objective is achieved, renewable generation is intermittent and cannot be relied upon to supply electricity when required at times of peak load. Such a level of renewable generation capacity would need to be supplemented by generating plant capable of rapid load following for peak loads, and constantly by “spinning reserve”. The gas-fired plant at Peterhead might be able to provide some of this back up, but is far from ideally suited to doing so. CCGTs were not designed to ramp up and down rapidly and lose considerable eYciency when required to do so. In any event, the capacity of this station would be fully required in winter periods. Scotland would therefore have to rely at times of higher electricity demand, and more generally for spinning reserve, on imports of electricity across the interconnector from England, and specifically from the remaining English coal-fired power stations (ie those that have not opted out of the LCPD). The question must arise as to whether the capacity of the interconnector would be adequate in all circumstances. Assuming that hydro/renewables generation cannot be higher than 40% by 2020, are there any other alternatives? Only new build, nuclear, gas or coal, would appear to be a feasible alternative, and perhaps only new build coal could provide the operating flexibility required. I cannot comment on the likelihood of new nuclear build, but it is apparent that nuclear stations cannot operate flexibility. New gas-fired capacity may be capable of being designed to do so, but gas prices have been raising rapidly and North Sea gas production from the UK sector is now in decline. The gas would therefore have to be imported. Scottish Affairs Committee: Evidence Ev 59
Fortunately, all may not be lost with respect to coal-fired generation in Scotland. First, it is unlikely, but not inconceivable, that Scottish Power may decide to fit flue gas desulphurisation at Longannet. This would enable that station to opt back in again by 30 June 2005. Secondly, it is known that Scottish Power have been in discussion with Mitsui-Babcock about advanced coal generation technology in relation to Longannet. If such technology were to be installed there, it would enable the station, which is relatively modern, to meet the requirements of the LCPD with respect to new plant, and therefore to continue beyond 2015. It may be that the Committee will wish to seek a submission from Scottish Power with respect to both of the above. CoalPro is pleased to be able to submit written evidence as set out in this letter and remains willing to provide any further information that may be required. David Brewer Director General 6 January 2005
APPENDIX 3
Letter to the Committee from the Dounreay Action Group
Situation A UK programme is urgently needed for future clean, safe, secure, and adequate energy supplies without discharges of noxious materials to the environment. Such a programme should, by now, be fully operational if disruptions to supplies were to be avoided. Unfortunately, our current best shot to counter the threat of an energy crisis, and adverse (asserted but unproven) climate change due to CO2, methane, etc discharges to the atmosphere, is to cover our open countryside aspects with wind turbines. Decommissioning of nuclear and coal power stations over the next decade or so, without replacement, will soon bring the crisis to fruition. There is no plan to replace them. Political response has been to trust our energy dependence on unstable foreign sources, and to ameliorate public anxiety by crying “Kyoto”, “renewables”, “climate change”, etc, to raise public enthusiasm for a seriously flawed energy policy. Our decision makers are mostly handicapped by technological illiteracy, and a forward view limited by a myopic zero to five year range. It would have been more helpful if the executive had emerged from the euphoria of its own spin, and listened to their own far better informed advisers, and to the nations scientific and engineering fraternity. These people do, after all, understand the situation. A new UK nuclear power programme is now so long overdue, that serious disruption to our power supply is probable at a level approaching certainty.
Wind Turbines An artificial financial climate favouring wind turbines, has been created via such ploys as the ETS scheme, grants, taxes, fines, and restrictions on large generators, and manipulation of directions, controls, regulations, planning, and tax in favour of renewables (almost totally wind turbines). There should be no reason to rehearse this aspect further here, except to note that for what wind turbines are costing the tax and energy bill payers, a far more secure, economic, clean, safe system could have been well on its way. It is very diYcult to envisage a logic by which wind turbines could possibly provide security of supply.
Plan for the Future In round figures, a reasonable assessment (there may be others) is that some 50 to 60 GW of fusion energy should be available in 150 years time; the intervening period should be the basis for the programme. Within that period, a similar amount of fission potential will be required, and to supply this energy will require some 100 x 2GW 40 year life span nuclear power plants, the additional demand being met from hydro and marine pump and kinetic systems. Much of this energy will go to transport, either directly (electrification of railways), or via hydrogen production and fuel cells development for other transport needs. Such a programme would necessarily be accompanied by large investment in the production, storage, distribution, and delivery, of hydrogen, and into fuel cell research and development. Financing of this work could mostly be met by the amounts currently frittered away on an unbelievably naive wind turbine culture. Dounreay should be awarded a £100 million/year slice of this programme. Technological developments over the years would require the programme to be flexible enough to incorporate innovations. The types of reactor currently envisaged would probably be Pressurised Water Reactors for base load, High Temperature Pebble Bed Reactors for hydrogen produced by hydrolysis of Ev 60 Scottish Affairs Committee: Evidence
water, and local supply via Closed Circuit Gas Turbines, Fast Reactors for base load, for breeding new fuel, and for transmuting highly active waste to safer levels with a very much reduced decay time. This in no way limits reactor types nor technological innovation. To date, there has been little scope for widespread discussion and distribution of information; even this Consultation has been rushed and lacks publicity.
Radioactive Waste Treatment Processing of radioactive waste resulting from the programme would be diVerent from the scheme currently being tinkered with. Plant for separation, reduction, transmutation, decontamination, compaction, etc., to treat continuous waste streams would be required, as also would a means of final disposal. It may be that in the future, people will regard this waste as a valuable material, but in the meantime it must be dealt with to the best of technical knowledge. Government view is that no new nuclear build can take place until a solution is found for the disposal of radioactive waste. A world wide view is that there are no radioactive waste disposal problems which have not been satisfactorily resolved or can obviously be resolved. There is one problem however, and that is public perception, a problem which is of Government’s own making. The House of Lords Select Committee on Science and Technology have recently castigated the Executive for using radioactive waste as an excuse to procrastinate over a decision for a new nuclear build. The Lords Committee have persistently given a solution to disposal of waste stocks for over 20 years, and before that the Royal Commission on Environment Pollution oVered similar advice. To avoid decision making, the Executive have convened— concocted—devised a series of Consultations, Technical Committees, Inquiries, new Quangos (eg NII, NIREX, SEPA, EA, LMA, LMU, RWMAC, ISOLUS, CoRWM, NDA, etc) to give the impression to voters that something useful is being done. In reality, there is an obvious political mess, not a technical one— ie the technical problems have been satisfactorily resolved decades ago. It is obvious that in the absence of facilities for disposal in subduction areas and international best geological sites, a deep engineered facility is required in the most suitable geological location that is available to us. Nimbyism has been engendered by the Protest Industry, who in turn have been, and still are, favoured by politicians and some of the media; this is a sad condition which will take time to correct, ie, to undo the harm done and then follow the route which other nations have trod. R E Godfrey 6 January 2005
Dounreay Action Group. Who are we? The Dounreay Action Group (DAG) was formed in 1982 in response a threatened downturn in the economic input of UKAEA Dounreay to the local, regional, and wider economies. The Group comprised a large majority of local private and public organisations, groups, associations, businesses, and individuals. Since its founding, and in pursuance of it’s role of advocacy for the continuation and expansion of employment at Dounreay over an extended period, DAG found it necessary to enter into many debates, Public (and otherwise) Inquiries, conferences, workshops, campaigns, meetings with the nuclear power industry, meetings with Ministers and other politicians, meetings with anti-Dounreay/anti-nuclear power groups. Since 1996 when the fate of Dounreay was becoming ever more gloomy, but still a long way in the future, DAG has been represented at some seventy of the gatherings noted above. Because DNE is, and has long been, closely linked to the Northern economy, we have been involved in a relevant assortment of like gatherings, plus media interviews (press and TV), and diverse correspondences with regard to DNE, and necessarily to all aspects of nuclear power. In this last regard, we have also had a presence (sometime related to other organisations) at a number of allied Learned Bodies’ conferences such as “Biological eVects of Low level Radiation”, “Treatment of Radioactive Waste”, “Nuclear Power and the Environment”, and many more. In 2003, and in response to current threat to DNE, our policy was re-asserted, and has continued by attendances at workshops on, and/or responding to, DTI’s consultations on the nature of the proposed NDA, DTI’s White Paper on UK Future Energy Supplies, DTI’s CoRWM and MoD’s ISOLUS consultations, and a number of consultations on DNE activities. Our current membership comprises nine Community Councils, four political party local branches, five Traders Associations, Thurso and Wick Trades Council, and Trade Unions, who give us their support and wish to be included on our circulation list. We also have some 14 individual members. This membership mostly comprises original members and member groups; we have not as yet embarked on a recruiting drive. Dounreay Action Group January 2005 Scottish Affairs Committee: Evidence Ev 61
Further memorandum from the Dounreay Action Group
Caithness Population (by Decade)
Year 1801 1811 1821 1831 1841 1851 1861 1871 Population 22,609 23,419 29,181 34,529 36,343 38,709 41,111 39,992 Year 1881 1891 1901 1911 1921 1931 1941 1951 Population 38,865 37,177 33,870 32,010 28,285 25,656 24,183 22,710 Year 1961 1971 1981 1991 2001 2011 2021 2031 Population 25,000 27,776 27,641 26,710 25,060 20,000 15,000 13,000
R E Godfrey 14 January 2005
APPENDIX 4
Memorandum submitted to the Committee by Julian Walford BSc (Eng), MBA, MIEE
Background I was born in 1950, qualified as an electrical engineer in 1972, and have undertaken a number of engineering and management roles with UKAEA since joining full-time in 1975. I am currently Head of Finance and Contracts at Dounreay. I have lived in Caithness on and oV since 1955, and my father worked at Dounreay from its inception then, until his retirement in 1990. I have two sons, both graduate engineers born in Caithness, but now working in the South of England. My wife works also at Dounreay. I am relatively well acquainted with the way in which Dounreay funding flows to employees, contractors, other payees and (through inter-site trading)—with the rest of the UKAEA. These are my personal views, not those of my employer. Scope I wish to oVer brief evidence on three subjects: — developing a local world-class nuclear decommissioning capability; — seeking work for the Caithness and Highland economy; and — wind and marine energy development.
Nuclear Decommissioning Capability At present there is a significant emphasis on establishing a decommissioning capability in Caithness. This includes investment in test and research facilities. While undoubtedly this is helpful in meeting Dounreay’s needs, it is not at all clear how this translates to an enduring capability based in Caithness. The very economic factors that demand a local capability make such diYcult to export. Further, the current nuclear licence structure, whereby UKAEA must employ the key engineers who devise requirements, and manage the work, represent a barrier to those same people servicing other sites.
The Caithness and Highland Economy There is a significant drive currently to ensure that the local economy captures an increasing share of the Dounreay decommissioning expenditure. In general one observes locally based businesses developing their manufacturing and service capability, and therefore being better able to capture this funding stream either directly, or indirectly (NDA Tier-2 and 3 contractors). Firms are increasingly establishing local bases, facilitated by the Forss Business Park. The NDA moving there can only help. There is a question however about how much work the Site Licensee Company (SLC) does in-house, and how much is sub-contracted, and whilst the NDA has addressed the issue (make or buy decisions), it isn’t clear whether they see a large SLC as a good thing or not. There is an argument that a diverse range of firms meeting Dounreay needs is a good way forward, ideally each serving both Dounreay and increasingly other work-streams from the local base in due course. Such a business model demands that the SLC does the minimum in-house, and reduces with time. The NDA model demands the SLC be owned by a bidding organisation (which could be a consortium and that consortium could include UKAEA or BNFL). This is based on US precedent, and a key approach in the US is to seek from bidders both the decommissioning performance required and an approach to developing the neighbouring economy. Such an approach has a place in Caithness, and one could envisage Ev 62 Scottish Affairs Committee: Evidence
bidders (particularly private-sector bidders) oVering to invest in their business in this locality, to good advantage. The key to any such enterprises is synergy with the natural capabilities of the local market including the skills available. The local enterprise agency does not seem to have analysed the requirements or at least there is little published. There may be merit in further work here.
Wind and Marine Energy Development
Wind Wind development is continuing in Caithness and Sutherland. This is controversial as the developments are generally being proposed close to habitation (and the shore) where the electrical infrastructure is available. Personally I support development both onshore and oVshore, but sited sensitively. There are vast near-barren inland wastes with no population, but it needs a commitment to provide the grid interconnections from the 275 kV line which exists for Dounreay, and runs up Strath Halladale, and upgrade it to double circuit 400 kV providing over 5 GW capacity. Furthermore, decent sized installations should be built—perhaps a 1,000 windmill array using 5 MW units. This is feasible—there is plenty of land. Apart from the construction benefit, the ongoing service requirement would assist in supporting the economy. Some quantification of this would be useful. Many objections have been made to wind development on the basis of the cost of replacement power when the wind is not blowing. I have yet to see proper studies undertaken of the cost of integrated solutions involving the existing hydro-electric dams. For example the Loch Shin hydro facility appears to have a very high storage capacity, and equipped with additional generating capacity it could use the existing reservoir purely to back-up Caithness and Sutherland wind farms for the limited periods when not generating.
Marine My understanding of the state of development, is that wave energy is some considerable way oV economic feasibility. In contrast tidal energy is closer to break-even. The challenge is to manufacture and install devices and one expects unit prices to fall with manufacturing development, and operating experience. Unlike wind energy where continental firms now have the bulk of the market, UK universities seem ahead, including the nearest—Robert Gordon in Aberdeen. Caithness and Orkney are in a zone where there are massive tidal resources, (caused by the interaction of the North Sea and Atlantic basin tidal resonances) which are entirely predictable (if not steady) and can be matched with others elsewhere around the UK coast to provide a constant generation capability over the grid. Again electricity grid interconnections are an issue. Clearly there is an opportunity here to establish Caithness manufacturing and testing of these devices. This has synergy with the existing manufacturing that supports Dounreay, though the scale is much increased. Perhaps the decommissioning test facilities could also be used. It should be noted that facilities at Wester and Castletown have manufactured oil pipe stringers and domestic white goods (freezers, etc). Low wage costs, low land and housing costs make manufacturing feasible. Could the Dounreay Tier-1 bidders contribute here?
Conclusion The renewables energy programme has synergies with the ongoing requirements at Dounreay, and the capabilities of the locality. There are opportunities to manage the development of both to maintain the local economy. 11 January 2005
APPENDIX 5
Memorandum submitted to the Committee by Alan J Scott MIMechE, CEng
Introduction My name is Alan Scott and I currently work as an engineer for an international company providing nuclear decommissioning services at Dounreay. I have been a resident in Caithness since moving up from Central Scotland following graduation and first joined the UKAEA at Dounreay 20 years ago. I would like to express my own opinions with respect to the above issue and hope that you may consider my thoughts Scottish Affairs Committee: Evidence Ev 63
as part of the inquiry. Being completely unfamiliar with Parliamentary Committee protocol, and particularly the requirement for written evidence, I am unsure of the relevance (if any) of my thoughts. Being deeply concerned about the future social and economic wellbeing of Caithness and Sutherland following the decommissioning of Dounreay, however, I feel compelled to submit this short note for your consideration. Focusing on one of the strands of the inquiry: (i) (specifically for the Caithness region)—The future job prospects for people currently employed at Dounreay following completion of decommissioning.
AFuture Based on Nuclear Decommissioning The decommissioning of Dounreay represents a unique, interesting challenge for the current workforce, and indeed makes eYcient use of the skills and expertise which have been developed since the 1950’s. Unfortunately the exportation of these skills such that “we can decommission the rest of the world once we’ve finished Dounreay” is the message being preached by both local and visiting senior politicians and also by some of the current management. This view is sadly misleading and without substance. If you were to look around the world to see who actually completes the decommissioning of nuclear facilities, you will find that the vast majority of the work is completed using nationals of the country involved, and usually by people who operated the plant. In this respect Dounreay is no diVerent from the rest of the world. Whereas there is undoubtedly a future international market for the transfer of knowledge gained through the completion of nuclear decommissioning at Dounreay, this market is limited largely to engineering and scientific professionals. Although Dounreay will continue to support some form of work from now until 2036, the amount of work will rapidly drop oV during this time. This shortage of work will at best only be partially compensated by emergent work in the national and international nuclear decommissioning market. What we require urgently is an alternative source of work for the skilled workforce whose available work will decline rapidly from this point onwards and will terminate on the completion of decommissioning at Dounreay.
An Alternative Future Based on Making Use of the Current Skill Base As an alternative and totally viable solution to the problem, I believe that we should focus on what the county has to oVer and then try to fit that in with what the country requires. In terms of the former I refer to Caithness, and in terms of the latter I refer primarily to Scotland but also to the UK. Hence my simple “needs analysis” exercise:
Scotland’s (and the UK’s)Needs: 1. An energy policy which goes beyond the “end of noses” limit currently adopted and looks forward several decades at least. 2. A balanced energy policy which adequately addresses predicted future energy requirements, whilst recognising current fears for the global environment. 3. An energy policy, which at the very least will permit Scotland to keep pace with other industrialised nations, and at best will enable us to take the lead. 4. To retain a pool of suitable qualified and skilled resources based in Scotland who are able to respond to the challenge of ensuring that the countries present and future energy requirements are fully satisfied.
Caithness has: 1. A readily available supply of engineers, scientists and technicians currently supporting work at Dounreay with an excellent level and proven range of skills. 2. A fully established and serviced industrial site in the form of Dounreay. 3. A community highly tolerant of innovation and uniquely pro-nuclear. 4. Excellent further education establishments (UHI-North Highland College etc). 5. Access to an abundant supply of renewable energy resources (wind, waves, solar). Unfortunately and uniquely, Caithness depends on one source of employment to sustain the current levels of population and socio-economic wellbeing ie Dounreay. Whilst the ideal solution would be to diversify such that all the eggs were no longer in the one basket, I believe that the only solution is to create a replacement industrial hub in the county which will also serve the country in the long term. In the same way that Caithness, in the form of Dounreay, was chosen in the late 1950s as the R&D centre for what at that time was the energy source of the future, so it can be utilised in a similar way to service our current short and long term energy requirements. Ev 64 Scottish Affairs Committee: Evidence
We surely cannot ignore recent attention focussed on the requirement to invest in energy sources for the future, and specifically reliable sources which can provide stable base load capacity. This base load is required irrespective of whether the wind is blowing, or whether we remain on friendly terms with other countries who we are growing increasingly reliant on for supplies of oil and gas. We cannot also ignore recent statements from Professor James Lovelock, much respected guru of the green movement, who warned that nuclear energy is the only way to avert environmental catastrophe. Whilst we bury our heads in the sand and generate political reasons for not dealing with the issues of nuclear waste and nuclear power, largely under the guise of technical reasons, other countries forge ahead. Without going into detail on the significant programmes of investment in the development of nuclear power around the world, examples of what Finland, South Africa, France and the USA are doing are of worthy of note. It is also interesting to note that, at a time when interest in nuclear power is being rekindled globally, the UK remains unique in as much as it is the only country amongst the industrialised world which does not have a national nuclear laboratory, nor indeed a national organisation set up to develop energy sources for the future. It is indeed ironic that the type of reactor attracting international interest as a future generation of reactor design is the fast reactor ie the type of technology which Dounreay led in world in, developed by Scottish engineers and scientists, prior to the programme being terminated in 1994. Since then the French, Japanese, and Chinese have taken the lead in developments of the fast reactor. So, if I may return to Scotland’s needs, Caithness’s attributes and put them into the context of the current decommissioning plan for Dounreay, my proposed solution to prevent the decommissioning of the County is: That a national centre be set up in Caithness, whose remit will be the development of safe and secure energy sources for the future. The centre would complete research and development in both nuclear and renewable technologies with respect to security of energy supply and the Kyoto targets for reducing carbon emissions. It would provide a unique opportunity to investigate a balanced approach to energy supply with nuclear and non-nuclear technologies working together. In order to maintain a supply of personnel fully conversant with the engineering and operational requirements of nuclear reactors, and to develop a nuclear reactor system which will serve the needs of the country in the future, the centre would be used to site a fully operational reactor. The centre would also support work being done globally at present with respect to the future use of hydrogen as a fuel, such a centre would also be used to investigate how hydrogen could be both generated, transported and utilised in the future as a safe and “clean” fuel in Scotland. I believe that such a development, situated either adjacent to, or on the existing serviced site at Dounreay would oVer a unique chance to salvage something from the decommissioning of the site, and the only chance to stave oV the mass depopulation of the area. Such a centre could be developed in parallel with, but separately from, the current operation to decommission the site. Such a development would have potential to establish our country at the forefront of future energy supply technology and for us to be recognised as a forward looking nation. It may even help us recover Scotland’s proud reputation for excellence in the field of engineering and scientific achievements. Whilst other countries around the world actively invest in energy technologies for the future, we appear to sit back inactively and contemplate at length the impact of impending energy shortages, and global warming. An energy development centre in Caithness oVers a unique chance to invest in the skills developed in the Highlands at Dounreay, such that the country’s future energy supplies can provide a stable base for sustained economic growth. I apologise for the lack of brevity in this note, and hope that you find the content of some relevance in your inquiry. What is of no benefit to anyone is the experience of a second wave of Highland Clearances in Caithness and Sutherland, which will surely follow the completion of decommissioning at Dounreay, should work on an alternative major source of employment not be initiated as a matter of urgency. 17 January 2005
APPENDIX 6
Memorandum submitted to the Committee by Alistair J MacDonald BEng CEng MIEE
Introduction 1. I am a 39 year old graduate engineer working as a manager with UKAEA at Dounreay. I have lived in Caithness since 1973 other that a period at University. I started work at Dounreay in 1987 and have carried out a wide range of jobs at the facility. This evidence is given—not as a representative of UKAEA— but as an individual living in Caithness. 2. I am married and we have two of a family—one is currently studying at college out with the area and is unlikely to come back to Caithness due to a lack of employment in her chosen career. The younger one is currently in primary school. Scottish Affairs Committee: Evidence Ev 65
(Specifically for the Caithness region) the future job prospects for people currently employed at the plant when it is finally decommissioned 3. Future job prospects are limited because there is very little other professional employment in Caithness. A significant amount of professional employment is directly related to supporting Dounreay. There are very little alternative opportunities for staV at Dounreay to seek alternative careers or employment while being able to remain in the area. 4. Currently it is very diYcult to encourage professional people to come to Caithness. This is going to create a longer term problem. If we cannot secure staV such as dentists, doctors, medical consultants and clergy to come to Caithness then our community infrastructure will slowly crumble. I believe that work needs to be carried out to understand this situation and take positive action to prevent this escalating. 5. A significant amount (25%) of employment in the Highland Region is in local government. However, over recent years there has been a move to carry out more and more local government services centrally in Inverness. While this no doubt increases eYciency in the short term it could be that over the longer term this is to the detriment of the whole of the Highlands—is Inverness thriving at the expense of the outlying areas? Positive action needs to be taken to correct this. 6. The local enterprise company—Caithness and Sutherland Enterprise (CASE)—is the organisation charged with the development of business and employment in our area. They have done some good work as they encourage training and development and support specific proposals made by applicants for new business ideas and respond to market demands. The fact that business parks are now constructed in Wick and Thurso is positive as this is helping to create the infrastructure for long term growth. I do wonder though is this to the detriment of the town centres as there are many buildings lying in disrepair in both towns that could be developed and used for business purposes which would also enhancing the towns. 7. Over the last few years CASE has been putting a lot of emphasis on making sure that local (and not so local) businesses benefit from the money that is being spent on decommissioning Dounreay. While this is commendable, and CASE may be able to help better equip local businesses benefit from Dounreay in the short term, I think that the emphasis of CASE should increasingly be more on the longer term and focusing on the development of our area as decommissioning progresses. 8. Within CASE there is a department called the Decommissioning Task Force. There is little visible output from this department which has been set up to look at the longer term strategic issues associate with the decommissioning of Dounreay. Perhaps this department needs more resource and staV to be of benefit. A Strategy document (undated) is available and while there are a lot of good points made in that document there is comparatively little emphasis put on attracting inward investment or looking forward to the situation once expenditure at Dounreay is reduced. 9. Much is made of the future Decommissioning Market and a lot of eVort is being put into getting Caithness ready to capitalise on the large decommissioning market. While this is positive, especially if it attracts or levers European finance, it should be remembered that most other owners of nuclear liabilities will be Government Agencies and will probably be trying to make best use of their existing workforce to decommission their facilities. There has been very little decommissioning work won by UK companies in foreign markets to date. While the levels of expenditure on the world decommissioning market may be very large the amount of money that will be available for businesses in Caithness will be relatively small. 10. The Highland Council also has a responsibility for the economic development of the area. I wonder do CASE and the Highland Council work well together. The minutes of the North Highland Local Economic Forum highlight some areas where there is cross fertilisation between the various development organisations but it is hard to see where a clear strategic look at the future of Caithness is being taken and where action is being taken to make this happen. This is an important issue and perhaps it needs a dedicated team of people set up to develop and deliver a strategy for the future of Caithness. 11. I believe that a vision needs to be created for a future Caithness. We need to have some aspirations for what we expect Caithness to look like from an economic point of view in 15–20 years time as expenditure at Dounreay declines. We need to then take action to realise that vision. Some questions that could be considered are: — Do we try to encourage more industry to Caithness? Should this be diverse or one major employer? Should we target the service sector or manufacturing? Is there proper marketing and selling being done? We have seen manufacturing businesses fail in Caithness because of a poor market understanding. — What about a new power plant in Caithness. While this might be good because we have a workforce that can operate power plants we do have to remember that the electricity is not needed here and while in the past we had high numbers of staV operating nuclear power plants, modern facilities need much less staV. The Dounreay facility was, and still is, a high employer of staV not simply because of the power plant but because of the reprocessing and R&D associated with it. — Is there value in trying to expand the tourism sector? Our part of the country does less well out of tourism than other areas in the Highlands. — Alternatively do we simply plan to make Caithness a place to retire to? Ev 66 Scottish Affairs Committee: Evidence
12. To summarise it is time to take a longer term strategic look at the economic future for Caithness. As a layman it is not apparent that this is happening and it is also not clear that the current set of organisations dealing with economic development are organised to make this happen. Perhaps the day to day tactical issues like funding for training, funding for marketing and small new businesses needs to be clearly separated from longer term strategic development. Perhaps in the medium term experienced staV from within UKAEA and similar organisations could be utilised to assist with assessment and development of a longer term strategy. We need to be proactive in this area—not reactive.
The long-term strategy for the management of radioactive waste, in particular, intermediate-level waste 13. I don’t believe that this should be dealt with as a parochially Scottish issue. It is an issue of national importance. 14. The letter attached to this memorandum details my recent response to the recent CoRWM public consultation exercise. In the main the Government is proceeding in a way that should give a good result but I believe that special steps should be taken to ensure that CoRWM (or other bodies charged with solving this problem) are properly and fully resourced with the correct level of people. In addition the timescales must not be dragged out and the focus must not simply be in intermediate level waste but on all the waste streams from the nuclear legacy. 15. If new capacity is needed by operators to store conditioned solid intermediate-level waste on site that results in a need for local storage then that should be encouraged.
How can the shortfall in energy output be met once nuclear power no longer provides Scotland’s energy needs? 16. The question is very specific and relates to Scotland. Firstly the scale of the problem needs to be understood. A quick assessment of UK Government statistics indicates that for the year of 2002 we generated 49,555 GWh of electricity but we only consumed 33,680 GWh in Scotland. This diVerence is surprisingly close to the amount generated by Nuclear Power which was 15,863 GWh in Scotland. We exported 6,000 GWh to England and also exported to Northern Ireland. Therefore I suggest that we need to understand the problem. What will happen when Torness and Hunterston and switched oV? What will the true impact be? As environmental regulations get tighter should we be more worried about Longannet and Cockenzie being switched oV? 17. Does anyone actually understand what will happen as nuclear power plants are switched oV?The DTI/OFGEM Joint Energy Security of Supply Working Group (JESS) looks at the security of supply nationally but doesn’t appear to at a Scottish level—in fact for electricity Scottish data is currently not assessed. JESS only looks seven years ahead—this is too short given that the current policy is to allow the market to deal with the problem. I am sure that the energy position of the UK is best dealt with at a UK level and not at a Scottish level. 18. The UK Energy Policy is mixed up or non existent. This leaves the strategy to be driven by market forces. The issue is too important and the government must be in control. It cannot be left to the short term whims of the market and investors. 19. There is currently too much dependence on renewable energy and onshore wind in particular. Developers are only interested in being involved where there is money to be made. This is not a solution to energy problems. We also appear to be very dependent on imports of gas into the future from Europe and Norway. 20. More work needs to be carried out to develop an energy policy for the UK. First we fully need to understand the problem, understand the options available to us and then we need to develop a range of scenarios. 21. It is very likely that new nuclear build will be a part of a well developed UK energy strategy. This will be because from an economic and environmental point of view it will be better than the alternatives. The questions will be: — Can we actually build new nuclear power stations? Will we be ale to secure Section 36 permissions? The answers will be positive to this if we can explain to the general public why this is the best option and the location is chosen wisely. — Should they be built in Scotland? At present the answer would appear to be no, but there are undoubtedly viable locations in Scotland that could be considered. However, factors such as security of supply and transmission losses may dictate that Scotland is not the best location. On the other hand—if the infrastructure can cope with new nuclear build in Scotland—then why not? 22. If the UK planned new nuclear build in the near future then the options are limited to either a European Pressurised Reactors supplied by France and Germany—they are currently building one in Finland, or to an American Westinghouse design. In the longer term it will be likely that one of the reactor types being developed by the Generation IV International Forum (GIF) programme will be chosen. Currently the UK Government only supports this programme in a very limited way. Perhaps it is in the long term interests of the Government to support this in a more significant way. Scottish Affairs Committee: Evidence Ev 67
23. One of the key GIF technologies as based around a Sodium Cooled fast reactor—similar to the PFR currently being decommissioned at Dounreay. The UK is in danger of losing all its knowledge about this to other countries at best—or at worst simply losing the data gained from years of reactor build, operation and decommissioning. A decision is needed—do we preserve this knowledge or not. 24. At this stage the government should perhaps consider setting up a body dedicated to assessing the need and viability of constructing new nuclear plant and then moving on to implementing this if appropriate. 25. The newly formed Nuclear Decommissioning Agency (NDA) must remain focused on showing that decommissioning can be done economically and dealing with the current legacy liabilities. 12 January 2005
Letter from Alistair J MacDonald to CoWRM Secretariat
Public and Stakeholder Engagement 1—Response Please find some comments in response to your invitation to comment on the issue of long-term radioactive waste management.
What are the most important issues to you? What should be considered when making decisions about a long term radioactive waste management strategy? The most important issues that need to be dealt with relate to ensuring that the public understand the issue. There is a lot of information and mis-information about the nuclear industry and nuclear waste in particular and the issues need to be very clearly explained. I also believe that the issue needs to be set in context. I do not believe that there is a one solution for all wastes and this makes it very diYcult. It appears from your consultation document that this is the start of a BPEO study on the issue. As the recent RWMAC Annual Report makes clear a BPEO is but one tool to help make decisions. The issue of nuclear waste is complex, with many diVerent types of waste that have been created as a legacy from experiments, to the much smaller amounts of wastes that are generated from modern power stations. I believe that the BPEO approach is too simplistic for the totality of the problem. As far as I am concerned the prime issue is about getting our country to a position, in as quick a time as practicable, where there is an accepted solution or end-game for all our wastes and for those that will be generated into the future. Most people realise that the current energy policy in the UK is a shambles and that nuclear energy will be required to provide a solution. However, public acceptability of this solution can only be achieved if there is an end game for the current liabilities and future nuclear power will not create a further legacy that cannot be dealt with. The Generation IV nuclear programme is commendable but this can only be achieved if the wastes can clearly be dealt with. At all times the industry must be open and honest.
How do you think the volume and types of waste in the CoRWM Inventory aVect our recommendation of the most suitable option for long term management? Are some options ruled in, or out, because of the nature of the wastes we are dealing with? Are there other uncertainties and assumptions that you think we should look at? Have you any other comments on our work so far? I think that not only do the waste types need to be dealt with separately but also the locations of the wastes need to be considered. The current state of the wastes also need to be considered because the options selected for detailed study will need to take account of the eVorts required to get the wastes into a suitable end state. Do not go into this thinking there is only one solution. You state that you have been asked to look only at six categories. You must consider all nuclear wastes. You must also have clarity on the Plutonium, Uranium and Spent Fuel. I believe that a national strategy should consider these materials where they are not needed for national security or strategic reasons. As an example the inventory of Highly Enriched Uranium will be dealt with diVerently from say Depleted or Natural Uranium—this needs to be accounted for. At a minimum stocks of DU should be considered as wastes, and we should make sure that the industry has got developed plans for dealing with these wastes. Stocks of HEU are potentially valuable and traded as such. Perhaps a formula needs to be developed to get to a point where a decision can be made on a case by case basis about HEU. For example a stock of HEU that can be made into research reactor fuel at a standard fabrication plant is diVerent to a stock of HEU that needs some impurities removed and the enrichment level changed before it can be used. The door should be open for the latter to be treated as waste should that specific assessment declare that to be the best option. Nationally we do need clarity on how spent fuel is managed. As it stands spent fuel is a waste unless reprocessing takes place. Therefore it should be included on a waste inventory. Only of the decision is made to reprocess on a case by case basis should the fuel be removed from the inventory but of course it will be replaced by an increased amount of other wastes resulting from the reprocessing. Ev 68 Scottish Affairs Committee: Evidence
Your document points out a number of uncertainties. This in eVect means that there are a number of potential scenarios that should need to plan for. You should be responsible for clear planning of these diVerent scenarios. If there was clarity in the end-game for some of the materials you mention, and the diVerent scenarios could be reliably assessed, then this would give the operators and the Government a more robust financial and planning framework on which to base their decision making for the various waste and fuel streams. This would ideally lead to less uncertainty. Issues like substitution must have early resolution. The industry is in a no-win situation. Where reprocessing of foreign fuel has taken place there are agreements that wastes will be returned to the country of origin. This is correct and no doubt done due to environmental pressure. However recent experience has shown that where return of waste is being enacted then environmentalists oppose that. I know that I would prefer to see a vitrified glass block being stored or transported near my home than a fuel element. Perhaps time has moved on since these inter-governmental agreements were signed and this issue should be looked at again.
Have we identified all the relevant options? Are the options adequately described? Have we considered all the relevant aspects of the options in our Options Report?
I am sure that you have identified all the options. However, as I have stated above there are a number of diVerent waste types and the optimum option will vary.
On what grounds do you think options should be removed from the long list? Are other issues important when assessing options?
Options should be removed from the long list if they are clearly impracticable. I think that your list in para 49 is broadly acceptable. I think that one other factor which should be taken into account is the ability to get agreement of a potential option on a short term timescale. We need to be clear on how all our wastes are going to be managed and we need to have that within a five year timeframe—not a 25 year one. Again, I reinforce the fact that diVerent waste stream may end up with diVerent solutions.
What do you think of our future plans? Are we going about meeting our objective to be able to recommend to Government the option or options that are best for the long term management of solid radioactive waste—in the right way? How would you like to be involved in future phases of our work?
You must meet these timescales. It is important. Our country has spent a lot of time and eVort on this issue culminating in the collapse of Nirex following the RCP planning application. This is taxpayers money. I believe that you should somehow make good use of all this work as best you can. I also believe that there are groups of people within the industry that have carried out a lot of work in this area perhaps for specific wastes streams appropriate to their organisation or their site. Again you should somehow capitalise on this work, and this knowledge. Perhaps you should consider getting key people with that knowledge and having them seconded to you to help you until July 2006. Public Consultation is commendable but very diYcult and you will never achieve consensus. Unless the final option you come up with is along the lines of; — condition all the wastes at the host site to a stable form; — store in such a way that these are monitorable and retrievable; — store on site in near surface facilities. You will never get total agreement from the general public, unless you can clearly explain why other solutions are better. You will have to do this through information campaigns, stakeholder groups, targetted focus groups, press advertising and briefings and perhaps some sort of repeat of the CEED Consensus Conference. I hope that you find these comments useful in your deliberations. I am happy that you keep my details on your database so that you can send me further information. I will be happy to contribute to future exercises. 3 December 2004 Scottish Affairs Committee: Evidence Ev 69
APPENDIX 7
Memorandum submitted to the Committee by Energywatch
Executive Summary Projections of Scotland’s future energy needs point to an increase in consumption and changing sources of generation. We believe it is unlikely nuclear power stations will be replaced with other nuclear plants. Renewable generation is likely to grow substantially over the next 20 years. We do not believe Scotland will actually experience a shortfall in electricity supplies as a British-wide market is imminent which will be underpinned by a regulatory framework ensuring security of supply. The changing generation mix requires substantial changes to transmission and distribution systems. Where these costs fall could potentially impact on generation development and consumers currently experiencing diYculties paying for their energy because of their personal circumstances or location. The upgrading of existing and development of new interconnectors with other European countries will further reduce the possibility of any shortfall of electricity in Scotland. When considering future energy needs a range of factors must be considered. Addressing energy demand by energy eYciency, technology innovation and education programmes will facilitate better understanding of energy consumption and assist environmental, social and economic goals. To facilitate the decision making process energywatch recommends that sustainable development principles and the eight consumer rights we assert are employed when considering future generation options. Referring to these principles will ensure that consumers can take confidence that choices made will be in their and future consumers best interests; deliver social progress for all whilst eVectively and prudently protecting the environment and maintaining high and stable levels of economic growth. However this assumes an eVective market which is transparent and competitive. energywatch is campaigning to improve the eVectiveness of the market.
Who We Are The Utilities Act 2000 placed on energywatch a statutory duty to protect and promote the interests of existing and future gas and electricity consumers in Scotland, England and Wales. We also have a specific duty to “have regard” to the interests of individuals: — who are disabled or chronically sick; — of pensionable age; — with low incomes and on benefits; — residing in rural areas. The evidence submitted here will underpin our position in relation to the third strand of this inquiry: “How can the shortfall in energy output be met once nuclear power no longer provides Scotland’s energy needs?”. The committee may be interested to know that energywatch has also submitted written evidence to the Trade and Industry Select Committee investigating the wholesale gas market. Energywatch believes only an eVective, competitive market can deliver benefits for consumers, secure supplies and a sustainable market.
The Current Situation There is an abundance of information available in the public domain which attempts to project future energy demands, likely generation mix and levels of import/export in Scotland. This all points to a future where electricity consumption steadily increases and a generation mix with renewable generation increasing at a rate close, but slightly below, Scottish Executive aspirations; gas fired plants replacing redundant plants and power from nuclear plants reducing to nil by 2023. Scotland currently exports about one sixth of electricity generated to England and Northern Ireland9 and has spare generation capacity of approximately 70%—well above that of England and Wales. However, as with the rest of Britain, nuclear power plants at the end of their operating life and are not being replaced with other nuclear power plants. The Energy White Paper10 made it clear that the Government has no plans to propose new nuclear power stations. The paper also states: “Before any decision to proceed with the building of new nuclear power stations, there would be the fullest public consultation and the publication of a White Paper setting out the Government’s proposals. In common with all generation options, the initiative for bringing forward proposals to construct new nuclear plant lies with the market and the generating companies.”
9 http://www.dti.gov.uk/energy/inform/energy–trends/dec–04.pdf. “Energy Trends 2004”. DTI. Pg 34. 10 http://www.dti.gov.uk/energy/whitepaper/ourenergyfuture.pdf. “Our energy future—creating a low carbon economy”. Pg 61. Ev 70 Scottish Affairs Committee: Evidence
The Future? We believe it is highly unlikely that any new nuclear power plants will be commissioned in time to replace any of the remaining operational Scottish nuclear power plants. We assume this as it is improbable that the market will propose to build such a plant without public subsidy. On top of this the economics are unfavourable when compared to new gas or coal power stations. We also conclude that large-scale renewable generation will grow at a rate close to that envisaged by the Scottish Executive.11 This assumption is based on the current and developing regulatory regime, eVective operation of the Renewables Obligation (throughout Britain); the will to place Scotland “in the vanguard of a new sustainable energy industry that could bring with it considerable economic benefit”12 and the fact that Scotland has about one third of Europe’s wind power potential. Although planning issues have been recently addressed to make it easier for renewable generation proposal to come to fruition public opinion is not always in favour of construction of sites in their vicinity.
Challenging the Assumption of a Shortfall The market in England and Wales has shown that when generation plant needs replacing it can do so whilst maintaining a healthy capacity margin. This is not a guarantee that the market will always react in this manner but it does call into question the assumption that there will actually be a real shortfall at any given moment in time. The Electricity Act (1989) obliges the Secretary of State and Ofgem to be responsible for “the need to secure that all reasonable demands for electricity are met”.13 The Act also places duties on the Secretary of State and Ofgem to “secure a diverse and viable long-term energy supply”. In order to understand what these needs are the Joint Energy Security of Supply (JESS)14 working group was established in 2001. This group originally considered only England and Wales, but in the future will consider all of Britain. The twice yearly reports of this group consider security of supply issues over a timescale of at least seven years ahead. The licensed transmission system operators and owners have duties to ensure security of supply too. Once the British Electricity Trading and Transmission Arrangements (BETTA) are in place Britain will in eVect be a single market. In this context any shortfall in generation in Scotland, England or Wales could impact on other areas of Britain. The interconnector (once BETTA is implemented the interconnector will become part of the British transmission system) between England and Scotland is being reinforced to cope with increased power flows between Scotland and England.15 The UK transmission system is also linked to the England-France Interconnector—a 2,000MW high voltage direct current link. Current plans for further interconnectors include an interconnector between Britain and the Netherlands16 (due for completion in 2007) and developing an interconnector between the Britain and Norway.17 Therefore once completed Scotland will be connected to transmission systems in England, Northern Ireland, France, Holland and Norway resulting in a European wide network, further reducing the likelihood that a shortfall will occur. Gas interconnectors are also being strengthened and constructed to connect Britain to the European gas network, implying that gas fired generation will become increasingly popular. These projected changes in the generation mix (including embedded generation) will require sweeping changes to the way transmission and distribution networks are designed and maintained. The need to move away from a heavily centralised generation system to a more dispersed system potentially involves significant cost. DiVerences in transmission charges between Scotland and England and Wales have to be resolved prior to BETTA being implemented. Energywatch has been part of this process to ensure that consumers, particularly those living in rural areas, are not unfairly penalised. The removal of the hydro- benefit for consumers in northern Scotland and its proposed replacement is a good example of how consumers living in remote areas need protection from policies which could result in them paying exorbitant distribution costs for electricity simply because they live far from the source of generation.
Managing Future Energy Needs Energywatch urges the Committee to consider that the closure of nuclear power plants (and equally the closure of the coal fired stations at Cockenzie and Longannet which have a combined output exceeding the combined output of nuclear power plants in Scotland) need not be met solely by replacing old generation capacity. There is great scope to reduce energy demand by: ensuring the market operates as eVectively as
11 http://www.scotland.gov.uk/library3/finance/ser5-09.asp. “Energy and Carbon Dioxide Emissions Projections for Scotland, 1990–2020: Summary and Discussion of AEA Technology Research”. 12 http://www.scotland.gov.uk/library5/environment/srfe.pdf. “Securing a Renewable Future: Scotland’s Renewable Energy”. Pg 18. 13 http://www.legislation.hmso.gov.uk/acts/acts1989/Ukpga–19890029–en–1.htm. 14 http://www.dti.gov.uk/energy/jess/index.shtml. 15 http://www.nationalgrid.com/uk/activities/other/mn–interconnectors–scotland.html. 16 http://www.nationalgrid.com/uk/activities/other/mn–interconnectors–netherlands.html. 17 http://www.nationalgrid.com/uk/activities/other/mn–interconnectors–norway.html. Scottish Affairs Committee: Evidence Ev 71
possible; improving the energy eYciency of all buildings; educating people about their consumption; improving electrical appliance eYciencies and providing people with information on diVerent generation options. Suppliers are now obliged to provide information, at least once a year, to all consumers detailing the percentage of generation sources making up their electricity consumption. Measures such as these will help engage and educate consumers about their energy consumption. The Scottish Executive is already ploughing substantial resources (far exceeding spend in England and Wales on a pro-rata basis) into improving heating systems for pensioners and should be applauded for this action. The energy and money saved by these consumers cannot be underplayed. This action helps tackle energy demand and complements the Scottish Executives’ stance “to ensure, so far as reasonably practicable, that people are not living in fuel poverty in Scotland by November 2016”.18 Measures to improve Scottish building standards, coupled with initiatives such as the Community Energy Programme, the Energy EYciency Commitment, the Central Heating Programme, the Warm Deal Programme and Scottish Community and Housing Renewables Initiative, will help deliver better eYciencies in homes, tackle fuel poverty and energy demand. They have also been designed to bring to the market innovative products and services, such as micro-CHP, micro-renewables and energy services packages.
Factors to Consider Energywatch believes that an eVective market could deliver the necessary generation capacity for Scotland. We are not convinced though that the market is currently operating as eVectively as it should. We will be campaigning for coordinated GB regulation to cover the oVshore and onshore markets; changes to the gas network code to bring increased market transparency for energy suppliers and large consumers; a substantial programme of measures from government and companies to protect low income and other priority consumers; a clearer understanding of why wholesale price spikes have occurred and what market remedies are available. Poor billing is a market-wide problem that causes not only extreme inconvenience, but, according to energywatch research,19 puts up to 10% of consumers into debt. We will: campaign for accurate, timely and clear bills; encourage consumers to read their meters and for companies to use those readings to provide accurate bills; establish a recognised standard for energy bills. Energywatch research has revealed serious impediments to consumers receiving the benefits of eVective competition. We will: press for solutions for consumers locked into teleswitching meter suppliers; explore the impact of BETTA as it goes live in 2005; highlight the detriment to consumers of two-tier regional pricing for electricity Energywatch would like to see all policy development explicitly embrace sustainable development principles and the eight consumer rights we assert.20 We believe that if these principles are considered during the development of Scottish generation assets then consumers can be confident that the choices made will be in their and future consumers best interest; deliver social progress for all whilst eVectively and prudently protecting the environment and maintaining high and stable levels of economic growth. 17 January 2005
APPENDIX 8
Memorandum submitted to the Committee by Industrial and Power Association The Industrial and Power Association represents a group of companies in Scotland that are involved in the power industry. The objective of the IPA is to promote and support the Power Engineering and Manufacturing Industry in its eVort to make a sustainable contribution to the economy of Scotland and of the UK. The IPA has had the opportunity of reviewing the evidence submitted to the Committee by the Nuclear Industry Association. The IPA supports the views of the NIA in principle in that the solution to the replacement of existing nuclear and conventional power generation facilities cannot come entirely from renewable energy. However, whilst new nuclear power capacity should replace existing nuclear capacity, it is appropriate that technologies being developed in Scotland that result in the generation of “low carbon fossil fuel power” should be part of the policy for energy in Scotland. Both proposals, nuclear and low carbon fossil fuel power, capitalise on the engineering and technology strengths in Scotland and provide a platform for export opportunities. It is now clear that the dominant technology in renewable energy, Wind Power, is not generating sustainable economic activity within the Scottish and the UK industry.
18 http://www.scotland.gov.uk/library5/environment/sfps.pdf. “The Scottish Fuel Poverty Statement August 2002”. 19 NOP (commissioned by energywatch) 2002. 20 http://www.energywatch.org.uk/public–consultations/work–plan–05/index.asp. “energywatch Work Plan 2005: Consultation document”. Pg 5. Ev 72 Scottish Affairs Committee: Evidence
Further, the NIA evidence notes that, in relation to jobs in the Caithness region, the Nuclear Decommissioning Authority has a remit to consider economic regeneration. The IPA takes the view that the NDA should be given a mandate to achieve, through its work, demonstrable economic regeneration at local level and at national level. The market for nuclear decommissioning is world-wide and the UK programme provides an opportunity to create a UK-based strength in engineering, technology and Project Management that can win export opportunities for the benefit of the UK economy. This export success can only be achieved through a national resource of significant size and strength, and not just by a locally developed resource. Charles Shields Chief Executive Industrial and Power Association 14 January 2005
APPENDIX 9
Memorandum submitted by David R Craig BSc MSc CChem MRSC
Introduction 1. I am a 45 year old graduate scientist working as a manager with RWE NUKEM, the largest private contractor at the Dounreay establishment. I have lived and worked in Caithness from 1980 to 1998, then again from 2002 to the present day. From 1998–2000, I spent two years working in Oxfordshire, and from 2000 to 2002, I spent two years working in the United States. 2. I am married with family—my daughters and wife were all born in Caithness.
Employment Run Down in West Caithness 3. West Caithness may be in a unique position in the UK and that position is about to change. Since the mid-1950’s, the Dounreay nuclear facility has provided guaranteed employment for several thousand people, and has provided salaries, contracts and indirect benefits to many local businesses, including hotels, restaurants, transport providers, bed and breakfast establishments and local suppliers “across the board”. From then and to this day, Dounreay underpins the vast majority of the local economy. Dounreay was set up as a research facility and that role has now changed to one of leading the world in developing decommissioning technologies. 4. UKAEA, who currently run the site, have been formulating plans to finally decommission the site, and in October 2004 they presented their plans to local contractors, showing expected employment from that date to 2036. (Reference: “The Dounreay Decommissioning Plan—Accelerating the removal of the Dounreay liability”, 11 October 2004, C Gregory, Directors support oYce). These figures predict a reduction of spend at Dounreay (and hence into the local economy) from its current £150 million/year to zero by 2036. The presentation also predicts a run down of staV employed on site from the current figure of around 1,300 to zero by about 2036. These figures exclude contractors staV but the same trend will follow. The prediction shows approximately 300 jobs lost by 2009, a further 200 lost by 2019, a further 200 by 2027, a further 200 by 2033 with the final 400 jobs being lost between 2033 and 2037. I would estimate contractors staV would add up to 50% of those figures, based on the current number of contractors working at Dounreay. These are significant job losses and something clearly needs to be done. 5. The adjacent Vulcan site also has plans to decommission and run down. These plans are linked into those of Dounreay as the facilities share routes for the treatment of some wastes. This represents further job losses to those listed above. For information, Vulcan provides approximately £17 million/year into the local economy, and provides 285 jobs. To the best of my knowledge, the site is expected to be decommissioned by 2014, when the current Rolls-Royce contract expires. There is uncertainty as to the site role after this date. 6. A further large-scale employer in this location is considered to be extremely unlikely, and it is doubtful whether separate business interests in the area will ever replace the income or numbers of jobs from Dounreay and Vulcan. The reality is, West Caithness needs income from as many sources as possible in order to replace the locally-derived economic benefit from Dounreay, and it needs it soon. Over the next ten to twenty years, the area will need to develop new businesses. Tourism, not currently a key employer in the area, will most likely need to grow into one of the key employers in the area. 7. Future job prospects in West Caithness are limited because there is very little other professional or technical employment in the area. A significant amount of professional or technical employment is directly related to supporting Dounreay. There are very little alternative opportunities for staV at Dounreay to seek alternative careers or employment while being able to remain in the area. Scottish Affairs Committee: Evidence Ev 73
8. Without key planning and investment, the area is likely to become a “retirement home” for those who do not want to or cannot leave. Future generations are likely to find employment elsewhere, hence the population is expected to age and shrink. Without new direction, investment and high-technology communication links, I believe existing businesses will decline, house prices will depreciate, and the area will become the equivalent of a “ghost-town”.
Opportunities for Employment in West Caithness 9. Caithness itself oVers “the gateway to Orkney” and West Caithness remains largely unspoiled and suitable for tourism—walking, trekking, camping, historic trails, geological trails, golfing, birdwatching, wildlife stalking (with cameras), fishing, etc. At present, between the Dounreay site and the local engineering businesses, West Caithness oVers a broad engineering base to build or develop new technologies, including new energy sources. Thurso and Dunnett bays oVer sea-side holiday venues, and Reay has the capacity to oVer a marina if the bay was to be walled oV from the harbour to the east side. The availability of Broadband throughout the rural community—promised by Scottish Executive by the end of 2005—means that by the end of the year, the area should be as well connected as anywhere else in the country, hence “home” working will become more prevalent and it will be possible to work from a house in Caithness as if in an oYce in London or Edinburgh. I see good broadband connections throughout the county as key to the success of future businesses. 10. In my view, there are two main opportunities for developing Caithness business for the future— (1) tourism/leisure and (2) developing engineering technologies for new energy sources. Although I believe in nuclear power, I concede that the location of Caithness (and transmission distances involved) and the relatively modest grid lines available (built for a prototype reactor only) are unsuitable for Dounreay to become any kind of commercial nuclear or indeed conventional power station. 11. Tourism and leisure. Because of the forecast run-down of the Caithness economy, tourism needs to develop in the area, particularly around Thurso and West Caithness, probably more than in any other area of the country. I believe that tourists can be lured here in their thousands—with the wide flat landscapes, walking, climbing, fishing and access to the Northern Isles etc that the county can oVer, we have the potential to cash in on our views and unspoilt landscape. 12. The attraction of the wide open landscape of Caithness to attract major players and to exploit what we have to oVer can best be illustrated by the recent Land Rover launch. The initial announcement was made by Land Rover in August 2004, quoting “breathtaking scenery” as the driving factor for Caithness being chosen for the worldwide launch of the new Discovery model. For weeks as residents we saw new Discoveries being driven around the country roads—including along the A836 and the Achreamie road—local hotels and businesses benefited extremely well from the estimated 3,000 visitors, and when featured on “Top Gear” in early November, Jeremy Clarkson was clearly and immensely impressed with the rugged beauty and unspoiled landscape he was able to view. Local garages and hotels benefited tremendously from this event— I believe that this should be looked upon as an example of what can be achieved through use of the county’s rugged beauty. Events like this also give free advertising for our unspoilt landscape and the tourist opportunities it can oVer. 13. However, large events like the Land Rover launch are unlikely to be frequent items on the Caithness tourism calendar, and in order to promote benefits on a smaller scale, I believe that we need to consider some of the following ideas: — Consider promoting a “north-west tourist route” from Thurso and Scrabster west along the A836 to Durness then south to Lochinver and Assynt. Ferries from Orkney bring tourists to Scrabster— oVering a well-publicised route along the north and west coasts would be a logical extension of existing tourist attractions. The route is already a designated tourist route in the Caithness Local Plan and to promote it with appropriate and well-marked stops (beaches, historic buildings, battle sites, nature walks/cruises, mountains, walks, unique local businesses as well as approved B&B and hotel accommodation and caravan/camping sites would be relatively simple to do and to promote. — Promote a West Caithness historic trail, including Viking history (Thing’s Va outside Thurso was the Viking parliament), chambered cairns, etc. There are many historic sites throughout Caithness—many of which are unpromoted and which are being neglected/overgrown. Within about two miles of my own house are 5,000 year-old chambered cairns, approx a dozen other cairns, standing stones, stone rows, four brochs, cists, a historic and ruined church, a longhouse and a fort. Many are classified as Nationally Important Monuments. Local walks with well defined and constructed pathways and visitor centres could benefit specific areas just as they have in Orkney and Shetland. — Some ideas for “the most northerly sporting and leisure activities” could be: — Promote a “Caithness” golf trail—possibly an annual competition over all the courses with prizes through tourist board promotion. — Promote a “Caithness” fishing trail—with access to lochs and river areas not normally accessed by tourists. — Promote a “Caithness” climbers trail—all peaks over, say 400 feet. Ev 74 Scottish Affairs Committee: Evidence
— Promote a “rugged cross-country route” similar to the Pennine Way or similar—say from Dunbeath across to Kinlochbervie. — Promote a geological trail. — Promote a “North Coast Surf Trail”—Dunnett, Thurso and Melvich beaches are already favourites for surfers. What about surf holidays with tuition? — Rival Vikings fought a great battle at Claredon Head just east of Thurso in 1196. What about an annual reconstruction with period costumes, etc? — These ideas are by no means exhaustive. 14. Developing new energy sources/techniques. Caithness has good engineering resources and facilities, and the capability to develop as a test base for engineering of new energy sources, for example biomass, solar, geothermal, wave, and tidal power sources. The existing grid structure from the Dounreay plant is suYcient to take the output from any test or prototype devices built in the vicinity of the plant. Workshops at Dounreay and on a smaller-scale across the county have the capacity for fabrication of a range of engineering equipment. It would even be possible to construct a small nuclear reactor—pebble bed reactor— at Dounreay to supply CO2-free electricity locally. 15. Wind power is already well established and further development or manufacture of components is not considered to be a realistic option for Caithness as (a) Denmark already holds the patents etc for this technology and (b) factories have already been set up in Scotland for this purpose—some of which have been closed due to lack of orders or due to continued supply of components from Denmark. I believe that we need to concentrate on new technologies for which we can own, and capitalise on patented engineering developed in Caithness. 16. Wave and tidal power would be ideal developments for Caithness to work at as we are essentially coastal and have some of the best wave and tidal energy resource in the country. Dounreay itself provides a coastal facility which could be used to develop, fabricate and test equipment. 17. Solar power development is another strong possibility for Caithness—especially in summer when we have almost continual daylight. Development of this technology could be done at engineering facilities away from the coast, therefore oVers a more flexible development base than wave or tidal power. 18. The same could be said for geothermal energy. Geology of the County and especially around Dounreay is well understood, hence it may be relatively simple to identify the best potential sites for geothermal development. 19. Development of more eYcient burners for biomass plants, and of scrubbers to reduce or remove carbon dioxide, could also be developed at engineering sites across the county. 20. The above oVers ideas which could be taken forward using the existing workforce resource and many of the existing engineering facilities across the county. 21. International funding and development for the above could be obtained from Local Enterprise companies, UK central government (DTI) and also the EU. Established international utilities companies already in the area (eg RWE) also provide potential opportunities, resources and links to help the development.
Threats to Employment in West Caithness 22. There are two main threats that I see to the above scenarios. These are (1) lack of suitable resources or facilities to provide the engineering development base, and (2) threats to tourism. 23. Lack of resources or facilities to provide engineering development base. This threat only becomes important as facilities in the area shut down or as resources leave or retire and no longer want to work. I believe that this threat can be minimised by developing a renewable energy engineering base while the existing workforce remains in Caithness. This is why I believe that it is best for a start to be made on this as soon as is possible. 24. Lack of action now is a further threat—not just from the point-of-view of lost facilities and resources, but also from the point-of-view of lost opportunities to develop and patent technologies which the county can benefit from for many years in the future. 25. Threats to tourism. I believe that the largest threat to tourism in the area is the construction of wind turbines across the county, hence spoiling the open and unspoilt nature of the county. I am not alone in this view—indeed it is becoming a major concern with tourist organisations across the UK. 26. During the Highlands Of Scotland Tourist Board (HOST) AGM on 5 November 2004 in the Drummossie Hotel, Inverness, the HOST Chairman, David Noble, said the following “And the LOW point—I do not think there is anything that has depressed me more than the threat that is posed by wind farms and their associated pylon lines. Their proliferation will do immense damage to our industry, and therefore the economy of the Highlands. Do not let anyone tell you otherwise. As other commentators have Scottish Affairs Committee: Evidence Ev 75
pointed out there is no Scottish Executive strategy for renewable energy or wind farms and their siting and at present the situation is tantamount to anarchy. Until a proper strategy is put in place I believe there should be a complete moratorium of wind farms in the Highlands.” 27. Data from other areas in the UK which already feature wind power stations can best be used to illustrate that wind power stations are not in any way long-term tourist attractions. 28. In August 2002, VisitScotland published an investigation into the potential impact of windfarms on Tourism in Scotland (INVESTIGATION INTO THE POTENTIAL IMPACT OF WIND FARMS ON TOURISM IN SCOTLAND, FINAL REPORT. Prepared for VisitScotland by NFO System Three, Proj 665c, 30 August, 2002). It concluded that visitors were less than enthusiastic about wind turbines than was perhaps expected, and contradicted the findings of an earlier poll carried commissioned by the British Wind Energy Association and the Scottish Renewables Forum. Four out of five visitors interviewed said that they came to Scotland for the beautiful scenery and for the unspoilt nature and landscape. More than half agreed that wind power station sites spoiled the look of the countryside, saying that one of their main attractions is the fact that they are few and far between. Over a quarter said that they would avoid parts of the countryside with wind turbine developments. The Executive welcomed the report as a useful contribution to the debate and it appears to have forgotten since. 29. No Government organisation appears to have made any attempt to investigate the impact of such views on the National tourism industry or the economy. Views of Scotland carried out their own investigation on this in 2003 (Wind Turbines and Rural Tourism—An analysis of data from VisitScotland) and concluded that on a National scale, the impact of continued wind turbine construction across Scotland could lead to a loss of up to 6,250 tourist-related jobs and up to £140 million in lost revenue. The report is well constructed and sadly does not make encouraging reading. 30. VisitScotland produced further data in 2004 regarding why visitors from seven separate countries come to Scotland (From “Tourism in Scotland”). “Beautiful scenery” was the top of every visitors list, varying from 90% for French visitors to 97% for Italian visitors—an average of 93.85% across all visitors questioned. 31. Wind turbine developments are a recognised source of worry for many regional tourist boards. On 6 September 2004, the Scotsman published an article (“Wind farms and sprawl seen as threats to Borders tourist trade”) reporting that Scottish Borders Tourist Board expect wind turbines and housing sprawl to damage their tourist economy. The Association of Caithness Community Councils highlighted the eVect of windfarm development in Caithness on tourism as one of their key concerns in a letter to the Convenor of Highland Council in May 2003 (S Gordon, Secretary, to A MacGee, Convenor, 22 August 2003). Tourism operators in the Western Isles claim the proposed windfarm on Lewis could cost them £30 million a year in lost tourist income (“Press and Journal”, November 2004). This was based on a survey carried out in summer 2004 over a six week period. The findings include: “Over half the respondents said that windfarms would discourage tourists from visiting or returning”. 32. I would suggest that there is widespread acknowledgement that wind turbine developments aVect tourism and that continued developments across the Highland—and across Caithness in particular—will damage the tourist economy. 33. Because tourism needs to develop in the area, particularly around Thurso and West Caithness, probably more than in any other area of the country, I do not believe that it is either desirable or sensible to increase wind turbine development in Caithness when the area needs to increase its visitors like never before. 34. Finally, wind power stations do not produce any local jobs except in short-term construction. Therefore jobs from wind powers station development are no alternative to those which can be developed for the tourist industry.
Summary 35. Caithness, in particular West Caithness, is forecast to have a massive reduction in employment from its main employer, between the present day and 2036. 36. I believe that Caithness can oVer two types of employment to counteract this rundown—(1) tourism and (2) engineering development and support for new or undeveloped sources of energy. 37. Tourism is not well developed in Caithness—mainly because to date the county has been able to rely on employment and “spin-oV” from Dounreay. The county oVers much potential for tourism and a list of suggestions is included. The largest single threat to being able to develop tourism is likely to be development of wind turbines across Caithness, which oVers no long-term alternative local employment to that potentially from the tourist industry. 38. Because of Dounreay and the contractor base which has developed there, Caithness is able to oVer an engineering base for development of alternative renewable energy sources. Facilities and engineering expertise are available now. Given the UK Government targets for improved energy eYciency and CO2 reductions, the opportunities in this sector are likely to continue until at least 2020. The main threat to this opportunity is considered to be inaction—if the opportunity is not seized upon soon, then facilities and resources may no longer be available, and/or others may patent and develop the technologies. Ev 76 Scottish Affairs Committee: Evidence
39. It is up to Government to be proactive now regarding employment in the area, rather than reactive later when the opportunities may be lost to their main threats. 13 January 2004
APPENDIX 10
Memorandum submitted to the Committee by the Nuclear Industry Association The Nuclear Industry Association (NIA) welcomes this opportunity to submit evidence to the Committee. This is an important topic that urgently needs to be addressed in the light of the reduction in Scotland’s nuclear generating capacity over the next two decades, and the long leadtimes for the construction of replacement capacity. The NIA is the trade association and information and representative body for the British civil nuclear industry. It represents 100 companies including the operators of the nuclear power stations, those engaged in decommissioning, waste management, nuclear liabilities management and all aspects of the nuclear fuel cycle, nuclear equipment suppliers, engineering and construction firms, nuclear research organisations, and legal, financial and consultancy companies. Several of our member companies, including British Energy, BNFL and UKAEA, have significant interests in Scotland, and it is the location for a number of large engineering firms, such as Mitsui Babcock and Weir, which are heavily involved in nuclear related activities. We have divided our evidence under the three headings that will be covered by your enquiry.
How can the shortfall in energy output be met once nuclear power no longer provides Scotland’s energy needs? On the latest statistics Scotland’s two nuclear power stations at Hunterston and Torness supply about half of Scotland’s electricity, more than any other source. Hunterston B is scheduled to close in 2011, and Torness in 2023. British Energy has stated that the scope for extending the operating lives of AGR stations is limited. Scotland therefore faces the prospect of needing to replace at least a third of its generating capacity, and probably more as old coal fired stations also reach the end of their lives or are retired on environmental grounds, over the next 18 years. There are several ways in which this shortfall could be replaced. First, power could be imported from England, although this would require England to generate the required surplus and there is no evidence that such large scale investment in current market conditions is likely. This option can therefore be discounted. Secondly, more fossil fuel plants—probably gas fired—could be constructed to meet the shortfall. However, fossil fuelled plants emit greenhouse gases. Increased reliance on those sources would be seriously detrimental to the environment and threaten national and international commitments to reduce carbon emissions to mitigate against climate change. Scotland is currently the leader in the UK in producing carbon free electricity and it would be regrettable to reverse this situation. Moreover, Britain will be a net importer of gas from 2006 as North Sea reserves are depleted. Relying on imported supplies from regions such as Russia, the Middle East and North Africa, many of which are politically unstable, poses risks to the security and cost of energy supply. While it is likely that some additional gas fired capacity will be constructed because of the commercial attractions of the technology, it should be as part of a balanced portfolio of generating sources to reduce the environmental, security of supply and cost risks associated with over reliance on a single imported source. Alternative options would be to replace the retired nuclear capacity with renewables or to replace it with new nuclear capacity, or a combination of both. Scotland clearly has significant potential for developing renewable sources of energy. As hydro generation has limited further scope for development, the most promising alternative is wind power, given that the timescales would not allow for the development of solar and wave power to a point at which they could produce suYcient electricity to meet the nation’s needs. However, replacing Scotland’s nuclear capacity with wind power would require more than 4,000 additional onshore wind turbines, which would require suYcient conventional back up generating capacity—probably fossil fuelled—to compensate for the intermittency of wind power. NIA fully supports the development of wind and other renewable energy sources as contributors to the creation of a low carbon energy economy. However, renewables at their current level of technological development cannot realistically replace the reliable, large-scale, carbon free output of the nuclear stations. The widespread development and deployment of clean renewable sources is crucially important, but it makes little sense to pursue policies to develop renewables at the same time as presiding over the loss of nuclear capacity. There will be no net improvement in emissions levels by replacing one carbon free source of electricity with another. Moreover, given the intermittent nature of many renewables such as wind, the back-up capacity required is likely to be fossil fuelled—coal or gas—meaning a probable net increase in emissions. Replacing Scotland’s current nuclear capacity could be achieved with one modern twin reactor station which could be located on any of the existing four nuclear sites in Scotland. Developments in nuclear technology are producing inherently safer, simpler, more eYcient and cheaper reactor designs that produce significantly less waste than existing reactors. If two such stations were built and combined with an increase in the use of renewables Scotland could move rapidly towards generating over 90% of its electricity without the production of greenhouse gases. Scottish Affairs Committee: Evidence Ev 77
Job prospects in the Caithness region following the decommissioning of Dounreay
Dounreay is by far the major employer in Caithness and if it were to be completely closed following decommissioning the implications for employment in the region would be seriously detrimental. Although full decommissioning is still many years away, even with UKAEA’s accelerated decommissioning plans, it is sensible to address the issue of economic regeneration well in advance. NIA is aware that the Nuclear Decommissioning Authority (NDA), which will assume ownership of the Dounreay site from April 2005, has a remit to consider economic regeneration, and will no doubt be working closely with the relevant local authorities and Development Agencies to ensure the region’s continued economic viability following Dounreay’s closure. The only point NIA wishes to stress is that the Dounreay site has full grid connections and the infrastructure for electricity generation, and could continue to be used for that purpose either for a large renewables project or a new generation nuclear facility, for which it would be particularly well-suited as a nuclear licensed site.
The long-term strategy for dealing with radioactive waste, in particular intermediate level waste
The NIA supports the work currently being undertaken by the Committee on Radioactive Waste Management (CoRWM), and recognises the important need for public confidence in decisions on the management and disposal of the UICs radioactive waste. Arriving at an acceptable long term solution for dealing with radioactive waste is becoming an increasingly urgent problem, particularly as the NDA is about to embark on its extensive programme of decommissioning the historic legacy of public sector nuclear sites Which will create significant additional amounts of waste. The technical basis for the safe treatment and disposal of radioactive waste is well understood, and solutions are being implemented in other countries with political and public support, for example in Sweden and Finland. NIA recognises the political sensitivity surrounding waste management in this country and the strong emotions it arouses, but we would urge CoRWM and the Government not to delay taking decisions. The waste exists and has to be dealt with, no matter what the future might be for new nuclear build in Scotland or elsewhere in the UK.
Conclusions
Nuclear energy currently supplies the largest proportion of Scotland’s electricity generating capacity, but that capacity will need to be replaced over the next 20 years. In the medium term, renewables are highly unlikely to be able to replace the lost nuclear capacity, and increased reliance on imported gas for electricity generation poses environmental, security of supply and cost risks. Scotland has a long tradition in nuclear energy and many Scottish companies possess valuable skills and capabilities in nuclear technology. The replacement of Scotland’s nuclear capacity with new, more advanced reactors would provide long term environmental, economic and energy supply benefits. NIA acknowledges that arriving at an acceptable long term solution to the problem of radioactive waste management is an important step in the public acceptance of new build in Scotland and elsewhere in the UK, however it should not be a pretext for delaying any decisions on replacing Scotland’s nuclear capacity. If Scotland is to maintain its position as a low carbon producer of electricity then it must start planning new nuclear capacity now. January 2005
APPENDIX 11
Memorandum from The Highland Council The Highland Council welcomes this opportunity to present evidence to the Committee. The three strands of the Committee enquiry are all matters of great importance to the Council. The first two relate specifically to activity at the Dounreay nuclear establishment which has been a major part of the economy of the far north of Highland for the last 50 years employing over 2,000 at its peak. The Council is acutely aware of the potential deteriorating employment situation in Caithness and parts of Sutherland, particularly in the light of the revised decommissioning timetable and the immediate reduction of jobs. The second strand is equally of great significance in that the Council has well established views on the management of nuclear waste in relation to Dounreay. The third strand of the Committees enquiry raises the issue as to whether there is a need for a specific Scottish Energy Strategy. The Council in submitting evidence to the Scottish Parliament’s Enterprise and Culture Committee into the development of Renewable Energy in Scotland argued strongly for the preparation of a Scottish Energy Strategy to put the current aspiration targets for renewable energy for Scotland into a wider energy policy context within which decisions on renewable energy developments might be made, rather than the current ad hoc arrangements. Ev 78 Scottish Affairs Committee: Evidence
Strand 1: Future Job Prospects in North Highland It is understood that the UKAEA have presented the Committee with staV projections for Dounreay over the next 30 years and the initiatives which are underway to secure the long term economic future of Caithness and north Sutherland. The Council would however wish to impress on the Committee that the reducing employment at Dounreay has to be set against the background of a declining population with all that implies for the future well being for communities in Caithness and north Sutherland. The population in Caithness has been in decline since the early 1980s, dropping from 27,563 in 1982 to 24,950 in 2002 (a decline of 9.5%). This is a combination of out-migration and negative natural change. The latest population projection from GRO(S) forecasts a further 7.1% decline in the population of Caithness by 2016. Neighbouring north east Sutherland is also experiencing population decline, by 3.1% over the 1991–2001 period.
Caithness population 1980-2016
28,000
27,000
26,000
25,000
population 24,000
23,000
22,000 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
Actual Projected
Population decline of the magnitude envisaged by the GRO(S) would have significant implications for the sustainability of north Highland communities as there is currently diYculty in maintaining existing levels of service provision (the Wick Hospital maternity unit is a case in point). Everything points to the need for special measures in response reduction in employment at Dounreay and the decision to locate elements of the HQ for the Nuclear Decommissioning Authority in Caithness is welcomed. The significant savings resulting from the acceleration of the Dounreay Decommission programme for 2003 to 2036 (in excess of £1 billion) should mean that resources are available to ensure that the area is able to develop new skills and jobs building on the expertise that already exists. To have £4 billion or now only £3 billion of public money invested in decommissioning and then to leave the communities economy in decline is not acceptable. The Council is of the view that at least 10% of the savings should be allocated to legacy projects to secure the infrastructure and services necessary for continuing community development and long term sustainability.
Strand 2: The Long Term Strategy for the Management of Radio-active Waste
The Council has yet to determine its position on the recent consultation document issued by the Committee on Radioactive Waste Management (CORWM). An oYcial response has, however, been submitted commenting “that this stage of consultation relates to consideration of 15 options for storage or disposal which are to be refined downward so that a limited number of options are carried forward for full assessment. It is thus technical options that we require to comment on and not the geographical location of where the final solution or solutions might be located. A distinction needs to be drawn between storage and disposal. In the absence of a long term solution then there is little choice but to accept interim storage close to where the waste is produced which in our case is at Dounreay in Caithness. Above ground storage is not considered unacceptable but solely on the basis that it is an interim solution. The long term solution in the view of the Council has to be sub-surface disposal which leads us to the conclusion that only options 2, 3 and 4 should go forward to more detailed technical assessment. The Council would then expect to comment on and between the full assessment on those options that are taken forward. Scottish Affairs Committee: Evidence Ev 79
On behalf of the Council, I should make it quite clear that this response says nothing about the geographical location of any future facility or facilities since that can only take place once much more information becomes available about a preferred technical route for dealing with the higher active solid radioactive waste.”
Strand 3: Shortfall in Energy Output following Demise of Nuclear Power
The DTI Energy White Paper published in February 2003 makes it clear that if the UK’s carbon dioxide emissions are to be cut by some 60% by about 2050 then “energy eYciency and renewables will have to achieve far more in the next 20 years than they have until now . . .” This recognises the demise in indigenous energy supplies in the UK, including nuclear power. Scotland already generates a significant amount of renewable energy with a significant amount from Highland where there is a long history of renewable energy developments, particularly the construction of large scale hydro electricity schemes following the Second World War. More recently onshore wind farms and small scale hydro schemes have been constructed as a result of government policy incentives. In consequence Highland is already able to meet electricity demand from renewable sources of energy. Any further development of renewable energy in Highland would therefore not be for local community requirements but would be in order to contribute to Scottish and UK renewables targets and to help compliance with Kyoto agreements. This has major implications for questions regarding impacts on the high quality environment of Highland and for local community acceptability. Nevertheless it is recognised that there is major potential capacity for Highland to contribute towards future wind, hydro, biomass, wave and tidal energy production. The Council has gained considerable expertise in the consideration of renewable energy matters in recent years as a result of receiving a large number of applications and enquiries for wind and hydro proposals in particular. For example over 1,000 MW of capacity of wind farms is currently at varying planning stages within Highland (ie between “scoping” for Environmental Assessment and approval subject to legal agreements). At present there are aspirational renewable energy targets for Scotland as a whole up to 2010 and then 2020. It is impossible for those outside the Scottish Executive to put this into any wider energy policy context especially in terms of: — the relationship of renewables to future nuclear, coal, gas and oil generation (which will provide the essential “base load” capacity to ensure that the lights stay on); — the relationship between Scottish and UK renewables targets, especially if oVshore wind power for England and Wales develops substantially; and — the relationship between renewables in Scotland that may be developed in the shorter term (eg onshore wind) and those that may be developed in the longer term (eg wave, tidal, biomass). Following on from the UK Energy White Paper, a Scottish Energy Policy Paper is recommended which would put targets for renewable energy into context. This Paper should also cover as a vital first step the conservation of energy, including transport. In the absence of this, the present perceived “dash for onshore wind” in Scotland is taking place in a strategic policy vacuum. As well as the 1,000 MW or so of onshore wind energy in Highland mentioned above, there are many more schemes proposed at the pre-planning stage that are currently commercially confidential. In contrast say to planning for future housing, there is no helpful local target (expressed as a range figure) against which approvals and proposals can be placed, and which might allow a sensible roll-out of development on sites that are most appropriate. Such local targets would follow from the above Policy Paper and could be prepared for strategic renewable energy areas in Scotland. These might be: — Highlands and Islands (including Argyll). — NE Scotland. — Central Belt. — South of Scotland. They should take into account inter alia the following in respect of onshore wind: — Grid capacity. — Environmental factors. — MOD Low Flying. — Separation from existing communities/settlements. — Scope to provide local employment and a “critical mass” for turbine production. Ev 80 Scottish Affairs Committee: Evidence
Such local targets could of course be reviewed at regular intervals, but crucially they would enable individual schemes to be put into context. Local targets can be met in the first instance by avoiding more sensitive sites (by virtue say of visibility or incursion into designated areas) and this would assist planning authorities in resisting the more contentious schemes. Targets could be revised upwards as and when integrated national policy is updated. 27 January 2005
APPENDIX 12
Memorandum submitted by Highlands and Islands Enterprise Network (HIE)
Summary This paper contains Highlands and Islands Enterprise (HIE) Network’s response to the House of Common’s Scottish AVairs Committee Inquiry into Meeting Scotland’s Future Energy Needs. The response concentrates on both the future economic prospects for the Caithness region associated with the Dounreay nuclear plant and the wider issue of renewable energy as a critical part of the UK’s future energy mix. The following summarises the key issues described in the paper: — The decommissioning process at the Dounreay nuclear plant is currently providing significant levels of employment in the Caithness area. It is the HIE Network’s strategy to ensure that the local economy benefits to the maximum extent possible through the involvement of local businesses and the employment of local people. — The HIE Network recognises that the revised decommissioning programme will impact on the area and to that extent it is also focusing on future opportunities to sustain the economy and community in the longer term eg by developing skills and expertise transferable to other sectors and by diversifying into other sectors. — The HIE Network believes that renewable energy will form a critical part of the UK’s future energy mix and that accessing the substantial renewable energy resources of the Highlands and Islands will be essential to this. This presents the HIE area with major opportunities in terms of local business growth and community development. — Successfully achieving Government targets for renewable energy will require a mix of technologies to be developed and deployed. If this is to be achieved further Government support is needed to ensure emerging technologies (such as wave, tidal and biomass) are developed and the benefits of doing so are retained in the UK. — Substantial investment in the grid is essential if this opportunity is to be realised. The transmission connection between the north and Central Belt is critical, as is the need to strengthen the lower voltage distribution system and connections to the islands. A supportive regulatory regime is essential to ensure that upgrades are realised and projects in the highest resource areas (eg islands) progressed. — Community scale renewable energy projects will also play an important part in supporting environmental goals while increasing levels of locally generated power for local consumption.
1. Context The Highlands and Islands Enterprise (HIE) Network is responsible for economic and community development across a diverse geographical area which covers more than half of Scotland and is home to around 425,000 people. The HIE Network’s strategy “A Smart Successful Scotland—the Highlands and Islands Dimension” sets out four strategic objectives: Strengthening Communities; Developing Skills; Growing Businesses; and Making Global Connections. The HIE core gives strategic direction, undertakes area-wide initiatives and provides support services for the whole Network. Our ten local enterprise companies (LECs) each serve a distinct geographical area and take account of diVerences in local needs and priorities. UKAEA Dounreay is situated in the area served by Caithness and Sutherland Enterprise (CASE). Decommissioning activity at the Dounreay site in Caithness is currently a major economic driver in the North Highlands. Renewable energy provides opportunities for the Highlands and Islands across all four of the Network’s strategic objectives. These opportunities have the potential to benefit some of the remote areas of the Highlands and Islands which have not as yet fully benefited from the remarkable turnaround in the economic fortunes of the Highlands and Islands in recent years. It is part of our vision to demonstrate careful, sustainable use of the area’s natural assets. Growth must be achieved in tandem with the area’s natural environment and development activity must remain aware of the legacy it leaves for the future people of the area. Scottish Affairs Committee: Evidence Ev 81
The first part of this response focuses on issues associated with the decommissioning process at Dounreay in Caithness. The latter part considers the wider question of future energy needs and oVers our views in relation to the role of renewable energy as an integral part of that mix.
2. Dounreay Decommissioning
Background The Dounreay nuclear establishment has been a major part of the economy of the far north for the last 50 years and currently provides direct employment (between UKAEA and site based contractors) for over 2,000 people. Recent estimates from UKAEA indicates that one in five jobs in Caithness and North Sutherland depends on decommissioning Dounreay and across Scotland it accounts for approximately 2,930 jobs. In recent years it is estimated that £80 million per annum has been directed directly into the local economy by UKAEA through wages and salaries and contracts with local businesses. The average salary of UKAEA employees at Dounreay is £24,000 per annum which is significantly higher than the average private sector salary in the Highlands and Islands (£15,000 per annum). CASE is working closely with UKAEA to fully understand the implications for labour/manpower requirements during the decommissioning of the Dounreay site. We understand that the Dounreay site will employ, both directly and indirectly, a declining number of people until the site has reached an acceptable end point for decommissioning. It is therefore a priority to ensure that these jobs are replaced by similar high quality jobs in the area. Currently (as at November 2004), unemployment levels in the two Travel to Work areas in the Caithness area are 4.1% in Wick and 2.7% in Thurso. Comparable Scottish and UK averages are 2.7% and 2.2% respectively. It is estimated that approximately 30% of individuals directly employed by UKAEA are resident in the Wick Travel to Work area. This figure could well be higher when contractors’ employees are taken into consideration. The strategy developed and currently being implemented by the HIE Network has two main elements: — To help ensure that the local economy benefits to the maximum extent possible from the decommissioning process itself through the involvement of local businesses and the employment of local people. — To identify opportunities to sustain the economy and community in the longer term—post Dounreay Decommissioning for example by developing skills and expertise which are transferable to other sectors and by diversifying into other sectors. UKAEA published an updated version of its Site Restoration Plan for Dounreay, the Lifecycle Baseline, in September 2004. This revised version of the plan diVered from the first version in that it indicated that the timescale for the decommissioning programme would be reduced significantly with the forecast end date being brought forward from 2063 to 2036. It also revised the total estimated cost of decommissioning downwards by £1 billion from £3.695 billion to £2.695 billion. UKAEA also indicated their intention to reduce direct employment at the site by approximately 200 over the next three years. Employment will decline steadily thereafter. The changes to the decommissioning programme obviously have implications for the area: — There will be a shorter time to identify and establish alternative employment generating projects in order to sustain the economy in the post Dounreay era. — There will potentially be less incentive for businesses involved in the decommissioning process to establish in the area and employ local individuals given the shorter timescale and lower value of available work. — Young people starting a career at Dounreay now are unlikely to see out their working life there as they have in the past. — The area may be less attractive to those with young families given that the employment opportunities present in the past will not necessarily be available to their children. — £1 billion less to be spent over the course of the decommissioning programme. It should be borne in mind that timeframes and budgets may change again via the competition process for the management of the site.
HIE Network Involvement The HIE Network’s response to decommissioning has fallen into four main areas: — Major Infrastructure projects (provision of business space, trials and training facilities). — Supply chain issues (assisting local businesses to become involved in decommissioning). Ev 82 Scottish Affairs Committee: Evidence
— Lobbying, communication and networking. — Skills related issues (forecasting skills gaps and shortages and delivery of training).
Opportunities for the Future The challenges and opportunities outlined are intended to help highlight the issues facing the local area from the decommissioning process in the short to medium term. Maximising opportunities for employment of local people will be achieved by ensuring that local businesses and individuals have the capacity and skills required to meet the needs of the decommissioning process. In addition the longer term strategy to create a sustainable economy post-decommissioning will require partnership working between local, regional and national bodies. Potential areas of activity include: — Identifying alternative economic drivers—renewables, waste minimisation, high quality manufacturing. — Identifying and establishing other major projects which could be sited in the area—both from the public and private sectors. — Building on the knowledge and skills base of the area to maximise the potential for transfer to other sectors. — Marketing the area as a source of high quality science and engineering skills. — Establishing the area as a centre of expertise in decommissioning and becoming involved in the global decommissioning market. — Exploring opportunities for developing the knowledge economy in the area through exploitation of Intellectual Property/patents developed during the decommissioning process. — Ensuring that challenges and issues faced in the north Highlands are not eclipsed by other areas where impacts may appear greater but where alternative economic drivers may be more accessible. — Ensuring that the socio-economic responsibilities of the NDA are fully exploited. — Maximising partnership working and ensuring involvement and commitment from a wide range of stakeholders. — Exploring potential for reallocating cost savings resulting from changes to the decommissioning programme to development of alternative sustainable economic activities.
3. Future Energy Needs—Renewable Energy The HIE Network firmly believes that Scotland’s future energy mix will be one in which renewable energy will play a critical role. The Scottish Executive has set a target of 18% of Scotland’s electricity needs to come from renewables by 2010 and 40% by 2020. This will require 800MW of new generation by 2010 and 2,500MW by 2020. This sits against a UK target of 10% by 2010, 15% by 2015 and an aspiration to achieve 20% by 2020. Achieving these targets will not only bring environmental benefits through carbon emission displacement, but will also oVer Scotland a significant opportunity to capture downstream economic and community benefits through technology and project development. As with the decommissioning programme at Dounreay, it is HIE’s objective to achieve the highest level of long term economic benefits to the area through the development of a range of renewable energy technologies at both commercial and community scale.
Background The renewable energy resources of the Highlands and Islands constitute the greatest concentration of potentially exploitable renewable energy resources in the UK. The Highlands and Islands area has a long history of exploiting this resource, and to this day continues to produce the majority of the UK’s renewable energy through its hydro schemes. Opportunities to further develop hydro electricity still exist, but the area’s resources also go much wider. Some of Europe’s strongest sustained wind regimes can be found in the Highlands and Islands (with load factors up to double the UK average), along with some of the world’s best wave and tidal regimes and significant forestry resources with potential for biomass exploitation. It is evident that accessing the renewable resource of the area will be important not just in local terms, but also in the wider Scottish and UK context of meeting national and international commitments. The Highlands and Islands also currently house some of Britain’s manufacturing, research and development facilities to exploit these renewable energy forms, such as Vestas, Cambrian Caledonian, marine energy business Wavegen in Inverness, and the European Marine Energy Centre (EMEC) oVering full scale wave (and later tidal) device testing and accreditation on Orkney. Significantly, the area’s long association with the oVshore oil and gas industry has ensured an enviable legacy of transferable knowledge, skills and experience in manufacturing and engineering. Research by the HIE Network has demonstrated that many businesses in the area have the capacity to diversify into the renewables sector, including some Scottish Affairs Committee: Evidence Ev 83
which have had considerable involvement in the decommissioning process at Dounreay. The HIE Network has prepared a Workforce Development Plan to identify and support the skills development needs of businesses involved in the renewables market as part of its strategy to encourage development of a local industry. The HIE Network estimates that there are currently over 600 jobs in the renewables sector in the Highlands and Islands—compared to 1,300 across Scotland as a whole and 8,000 in the UK (DTI Gap Analysis). The average wage range of those Highlands and Islands jobs is £15k per annum for production to £25k for management which is significantly higher that the average wage rate in this area.
An Energy Mix It is clear that to meet government targets for new renewable generation a mix of energy supply is required, and this will require new and emerging renewable technologies to be supported to the point where they can compete commercially in the renewables market. Equally important will be the mix of conventional energy sources. Over the coming decade much of Scotland’s conventional energy plant will reach the end of its life. While renewables will displace an element of this capacity there will undoubtedly be a need for replacement conventional plant. Again a mix of sources will help ensure security of supply, while also allowing the greatest flexibility to react to power demand fluctuations and to deal with intermittency of increased renewable generation. Decisions over replacement plant will need to be made by government and industry in the very near future.
The Role of Renewables Ensuring a mix of renewable energy sources are developed and contribute to the Government’s overall energy mix is dependent on continued support for these new technologies. To date assistance has mainly been in the form of grant support for oVshore wind, biomass, photovoltaics and research and development assistance. It is essential that this support continues. Government assistance has supported the development of a range of wave and tidal energy technologies, but to date few have reached full scale prototype testing. One wave device is currently being tested at EMEC and it is hoped that further devices will come forward to use the centre over the next three years. Plans are also in hand to extend EMEC to also oVer tidal energy testing, and a number of potential users have been identified. It is critical that devices are thoroughly tested and their performance independently verified if confidence is to be built in the ability of marine technologies to produce useful electricity. Equally important will be the UK’s ability to secure downstream commercial deployment, manufacturing and retain the knowledge base the UK is currently home to. To achieve this will require further incentives from Government—probably in the form of capital and revenue support. The DTI has allocated a £50 million fund to support these technologies. It is important that decisions on how this fund is allocated are made quickly to allow developers to plan for their future activity in the UK. Biomass electricity projects have also received considerable assistance in the last few years. However, to date a number of the projects awarded capital grant assistance have not proceeded, and until such time as unspent funds are reallocated or a new fund established there is no further government assistance available to new projects coming forward. In the Highland area alone this is already stalling projects. Again, speedy decisions are required by government to unlock funds that are unspent or to allocate new sources of support to biomass to ensure projects do reach fruition. This support has also in the past focused on opportunities associated with energy crops. It is the HIE Network’s view that future funding should not be restricted to energy crop projects but should also be used to support other forms of biomass. This is particularly relevant in Scotland, and the Highlands and Islands, where the greatest biomass potential lies in using existing forestry and wood processing co-products. Finally, consideration of the future energy mix should also take into account the role of renewables in both the heat and transport markets. Heating and transport both constitute around 40% each of our total energy use (with electricity sitting at approximately 20%). Both of these sectors should therefore also be tackled. Renewables sources of heat could include solar or biomass, and transport fuels could be produced from biofuels. Incentives to support these wider renewable energy uses are required. We are pleased to note that the Government is looking at the means by which renewable heat can be supported and we very much hope that this work will be progressed quickly.
Electricity Network It is widely acknowledged that the electricity grid across the UK is currently ill-equipped to connect numerous and widespread new generation. In particular, the grid across the Highlands and Islands, which was designed to supply centrally produced electricity to scattered communities, is not suYciently robust to connect substantial levels of new local generation for export south to the centres of population and demand. Constraints also exist further south with bottlenecks in the capacity of transmission lines between the Scottish and Southern Energy area and south of Scotland, the English interconnector and within the English system. Ev 84 Scottish Affairs Committee: Evidence
Investment approval for grid strengthening comes from the industry Regulator, Ofgem. To date is has agreed that investment can proceed to upgrade the transmission system between Beauly (outside Inverness) and Denny (outside Stirling). This will be of strategic importance in allowing the high resource areas elsewhere in the Highlands and Islands to be accessed for renewables development. Consent for the line rests with the Scottish Executive and it is imperative that an early decision is reached to allow downstream projects to be taken forward. Equally important, however, will be strengthening of the lower voltage distribution system across the northern mainland and ensuring investment approval for connection to the islands. Ofgem do not consider there to be suYcient market demand/justification for the latter at this time. This issue is discussed further below, but it is the HIE Network’s view that action is need by government and the Regulator to ensure the best renewable resource areas in Scotland are in a position to contribute to government targets.
Regulation In April this year, BETTA (British Electricity Trading and Transmission Arrangements) will be introduced across GB. While this will be positive in that it will increase transparency in the market and competition, but it will also bring serious risks to the development of renewables, particularly in the north of Scotland. Under the proposed charging arrangements for use of the transmission system generators in the north of Scotland will pay substantially more than their counterparts further south, by virtue of location (eg the further a generator is from centres of population and demand the higher the charges will be). The Scottish Renewables Forum has estimated that of the total £290 million charging bill payable by generators, £140 million will be met by Scottish generators, despite representing only 13% of total GB generation. To exacerbate matters, and despite the short time left until implementation, it is not yet known what the charging regime will be for generators based on the Scottish islands. It is estimated however that charges could exceed £70/kW, over three times greater than northern mainland Scotland charges and substantially greater still than English generators. This is obviously a serious deterrent to developing the renewable resource in these areas and one which ignores the much higher load factors available there. This uncertainty poses a further deterrent to island projects which in turn reduces the ability to make the economic case for grid investment. While Government has retained the option under the Energy Act to introduce a cap on charges in the north of Scotland, there is no certainty how or when this power will be used. Even if it is, it will have a 10 year limit and this is unlikely to be suYcient to support projects using new technologies (such as wave/tidal). A strong commitment is needed from Government to resolve these issues in the interest of achieving wide environmental goals and ensuring generators across the entire GB are treated in an equitable fashion thus protecting the principles of competition.
Community Involvement in Renewables Renewable projects are not just at the large industrial level. They also apply at the community and household level and are an eVective means of reducing energy consumption and carbon dioxide emissions, especially when combined with energy eYciency measures. HIE’s Community Energy Unit (CEU), which delivers the Scottish Executive’s Scottish Community and Household Renewables Initiative, is supporting over 140 community-based renewable energy projects across the Highlands and Islands and interest amongst communities continues to grow. The majority of these projects are small scale and linked to community facilities, oVering long-term revenue cost savings. Projects supported by the CEU have encompassed wind, solar, wood-fuel, hydro and ground-source heat pump technologies. Community interests in commercial scale projects is also increasing and to support continue community involvement in projects of this scale, the HIE Network has recently established a Community Energy Company. The purpose of that company will to oVer a range of finance and project management options to communities to assist their investment in commercial scale projects. Income generated from such projects can then be reinvested in a community. Options include the possibly of supporting community development initiatives, meeting the capital costs of implementing local development plans, or sustaining other community activities in the longer term. Alternatively, there might be more strategic developments that such income should be directed to, such as aVordable housing in fragile areas. Such decisions shall rest with individual communities who otherwise would be unlikely to have such options available to them.
4. Conclusion The decommissioning programme at Dounreay is currently of major economic importance to the Highlands and Islands. The HIE Network recognises the significant impact the decommissioning programme will have on the economy of the area. We welcome support from regional and national partners in meeting the challenge of developing a diverse and sustainable economy in the area in the long-term following the decline in employment at the site. In the short term, our aim is very clearly to maximise local benefit through ensuring local business involvement and employment of locally based personnel. Scottish Affairs Committee: Evidence Ev 85
While decommissioning activity progresses, we see growing opportunities for the area to develop its substantial renewable energy resources and to capture both economic and social benefits from doing so. We believe that renewable energy will form a crucial part of the UK’s future energy mix, but also recognise that achieving government objectives will require sustained eVort and support to develop new technologies, resolve grid issues and ensure a positive regulatory framework is developed. We look forward to working alongside government and our national and local partners to ensure that the opportunities associated with this new industry are realised and that renewable energy is able to contribute significantly to meeting our future energy needs. 28 January 2005
APPENDIX 13
Letter to the Committee from Aker Kvaerner Engineering Services Ltd We write as an Engineering Services Contractor (Aker Kvaerner Engineering Services Ltd), based in Stockton on Tees but with a local oYce at Forss near Dounreay. We work in the Nuclear, Industrial, Energy and Process Engineering sectors. We are relative newcomers to the area having opened this oYce approximately one year ago with a view to serving the Dounreay site. However, we are committed to building up this oYce by means of a combination of local employees supplemented by specialist skills from Stockton and are already providing relatively well paid, stable employment for local people, including the manager of the oYce. Our observations, summarised below, are brief but we hope they will be relevant and of use in the inquiry: — We consider that it is likely that nuclear power may be considered attractive in the relatively near future as part of a balanced energy portfolio for Scotland, particularly noting the advantage with regard to its low greenhouse gas emissions. — If nuclear power is to form part of Scotland’s future energy portfolio, it would seem appropriate to consider Dounreay as a logical location as an existing licensed site. It is likely that a majority of people might support such a proposal, not least because of the long-term employment prospects this would bring. The specialist skills required for operating a nuclear plant still exist in the Dounreay area and these could be used to good eVect. — Most people would agree that it is desirable to progress the clean-up of the Dounreay site as quickly and eYciently as practicable. To achieve this, it will be necessary to attract many skilled people to the area and retain those already there. If there was a plan for investment in new facilities as well as the decommissioning of the old, it is likely that it would provide motivation for completing the clean-up (as there would be new opportunities to move on to) and thus make it easier to get people to commit themselves to such a move. David Ley AK Engineering Services 2 February 2005
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