House of Commons Energy and Climate Change Committee A Severn Barrage? Second Report of Session 2013–14 Volume I Volume I: Report, together with formal minutes, oral and written evidence Additional written evidence is contained in Volume II, available on the Committee website at www.parliament.uk/ecc Ordered by the House of Commons to be printed 21 May 2013 HC 194 [Incorporating HC 879, Session 2012–13] Published on 10 June 2013 by authority of the House of Commons London: The Stationery Office Limited £23.00 The Energy and Climate Change Committee The Energy and Climate Change Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of the Department of Energy and Climate Change and associated public bodies. Current membership Mr Tim Yeo MP (Conservative, South Suffolk) (Chair) Dan Byles MP (Conservative, North Warwickshire) Barry Gardiner MP (Labour, Brent North) Ian Lavery MP (Labour, Wansbeck) Dr Phillip Lee MP (Conservative, Bracknell) Rt Hon Peter Lilley MP (Conservative, Hitchin & Harpenden) Albert Owen MP (Labour, Ynys Môn) Christopher Pincher MP (Conservative, Tamworth) John Robertson MP (Labour, Glasgow North West) Sir Robert Smith MP (Liberal Democrat, West Aberdeenshire and Kincardine) Dr Alan Whitehead MP (Labour, Southampton Test) The following members were also members of the committee during the Parliament: Gemma Doyle MP (Labour/Co-operative, West Dunbartonshire) Tom Greatrex MP (Labour, Rutherglen and Hamilton West) Laura Sandys MP (Conservative, South Thanet) 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. Publication 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/ecc. A list of Reports of the Committee in the present Parliament is at the back of this volume. The Report of the Committee, the formal minutes relating to that report, oral evidence taken and some or all written evidence are available in a printed volume. Additional written evidence may be published on the internet only. Committee staff The current staff of the Committee are Sarah Hartwell-Naguib (Clerk), Liz Bolton (Second Clerk), Jenny Bird (Senior Committee Specialist), Tom Leveridge (Committee Specialist), Luanne Middleton (Inquiry Manager), Shane Pathmanathan (Senior Committee Assistant), Jonathan Olivier Wright (Committee Assistant), Joe Strawson (Committee Support Assistant), and Nick Davies (Media Officer). Contacts All correspondence should be addressed to the Clerk of the Energy and Climate Change Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 2569; the Committee’s email address is [email protected] A Severn Barrage? 1 Contents Report Page Summary 3 1 Introduction 4 Context of the inquiry 4 Our inquiry 5 2 Transparency and public consultation 7 A lack of publicly-available information 7 Need for robust and credible evidence 8 Engagement with stakeholders 9 Legislative routes 10 3 Costs and value for money 12 Cost of Energy 12 Contract for Difference (CfD) support 13 Value for money compared to other low-carbon sources 14 Flood risk benefits and the strike price 15 Financing the barrage 16 4 Environmental impacts and mitigation 19 Flood impacts 19 Loss of intertidal habitat 20 International comparator sites 21 Impact on fish 23 “Fish-friendly” turbines? 23 Compliance with EU legislation 24 EU process under the Habitats Directive 25 Feasible alternative solutions? 25 Imperative Reasons of Overriding Public Interest (IROPI) 26 Clarity in application of the EU Habitats Directive 26 Compensatory measures and mitigation 27 5 Socio-economic impacts 31 Jobs, industry and growth 31 Adverse impacts to local industries 32 Impacts to the ports industry: water levels 32 Pumping 33 Operation of locks 33 Siltation and dredging 34 Marine aggregates industry 35 Fishing and tourism industry 35 Overall employment impact 35 6 Decarbonisation and energy security benefits 37 2 A Severn Barrage? Energy security 37 “Variable base load power” 38 Climate Change Benefits 38 Carbon savings 38 Contribution to climate change targets 39 Weighing up the arguments 39 7 Barrage technology and alternatives 41 The Hafren Power barrage design 41 Very-Low-Head turbines 41 A fixed barrage 42 Tidal power facilities worldwide 43 An alternative approach? 43 Other tidal power proposals 44 Socio-economic and environmental impacts of alternatives 45 Future of tidal industry and Severn resource management 46 8 Conclusions 48 Recommendations 49 Formal Minutes 53 Witnesses 54 List of printed written evidence 55 List of additional written evidence 55 List of unprinted evidence 57 List of Reports from the Committee during the current Parliament 58 A Severn Barrage? 3 Summary Following reports that a private consortium had met with the Prime Minister to discuss a new proposal for a tidal barrage in the Severn Estuary, the Committee launched an inquiry to examine the proposal in more detail and to encourage transparency and public debate. It had been suggested the scheme could meet 5% of the UK’s electricity needs from an indigenous renewable source. The proposal from Hafren Power Ltd is for an 18km fixed tidal barrage between Brean in England and Lavernock Point in Wales. It would have 1,026 Very-Low-Head (VLH) bi-directional turbines, generating approximately 16.5 TWh/year on both ebb and flood tides. The inquiry generated a high level of public interest, but many witnesses were concerned about the lack of detailed, publicly-available information about the project. The lack of robust supporting evidence led to a sense of mistrust on the part of some stakeholders, made worse by the uncertainties surrounding a possible Hybrid Bill. Closer engagement with stakeholders from the outset and a more open approach was needed from the developers of such a huge and unprecedented scheme. Although construction of the barrage would be privately financed, Government support would be required for approximately thirty years through Contracts for Difference (CfD) or a similar mechanism. The strike price required by Hafren Power is unknown, but the ability of the project to compete with other low-carbon forms of energy is in doubt. A high strike price risks swamping the Levy Control Framework (LCF), while a strike price below £100/MWh appears unlikely to ensure the project’s economic viability. Hafren Power have failed to overcome the serious environmental concerns that have been raised. Further research, data and modelling are needed before environmental impacts can be determined with any certainty – in particular regarding fluvial flood risk, intertidal habitats and impact to fish. The need for compensatory habitat on an unprecedented scale casts doubt on whether the project could achieve compliance with the EU Habitats Directive. Construction of such a large-scale barrage would inevitably create jobs but could also lead to job losses in local businesses and in particular the ports industry. An independent assessment of the overall net employment impact is needed. While a tidal barrage could offer decarbonisation and energy security benefits, the Hafren Power project in its current form has not demonstrated sufficient value as a low-carbon energy source to override regional and environmental concerns. Alternative pathways exist to meeting our 2050 carbon targets. Alternative options for exploiting Severn tidal resources also exist. Stronger public governance of these resources would offer the opportunity to develop alternative technologies and strengthen the evidence base before building a large-scale facility. 4 A Severn Barrage? 1 Introduction 1. The UK possesses significant wave and tidal resources. A recent report by the Crown Estate suggested that the theoretical potential of UK wave and tidal resources was up to 118 GW (Gigawatts) of generating capacity.1 Current UK electricity power plant capacity is approximately 89 GW (based on 2011 figures).2 The Crown Estate’s theoretical estimate for the generating capacity of tidal range technologies is 59 GW. Of this, 45 GW could be provided by tidal barrages while tidal lagoons could account for 14 GW.3 The Severn estuary alone could provide up to 5% of the UK’s current electricity generation from an indigenous renewable source, offering decarbonisation and security of supply benefits in addition to significant potential for national and local employment.4 2. Proposals for harnessing the tidal power of the Severn estuary, which has the second highest tidal range in the world, have been extensively studied since the early 19th century.5 The most comprehensive study undertaken to date by Government is DECC’s Severn Tidal Power Feasibility Study (STPFS), which concluded in 2010.6 The study carried out a cost- benefit analysis of five short-listed tidal power schemes for the Severn estuary, examining a variety of tidal technologies including barrages, lagoons and fences.7 Of these schemes, the Cardiff-Weston tidal barrage was identified as offering best value for money, although it was also found to be the most environmentally damaging of the schemes put forward. At the time, the Government did not see a strategic case for public investment in a Severn tidal power scheme, although it did not preclude a privately-financed