Energy Bill
Under item 3, we will take evidence on legislative consent memorandum LCM(S4) 20.1, in relation to the Energy Bill, which is UK Parliament legislation. I am pleased to welcome to the committee Fergus Ewing, the Minister for Energy, Enterprise and Tourism. He is joined from the Scottish Government by Mike McElhinney, head of electricity markets, Katherine White, team leader in electricity market reform, and—a late substitution—Norman Macleod, senior principal legal officer. I welcome you all.
Before we get into questions, minister, do you want to introduce the LCM?
Thank you convener, and good morning everyone. I am grateful for the chance to address the committee once again on the UK Energy Bill LCM in relation to an emissions performance standard, and to provide the committee with an update on the progress that has been made with the UK Government since the previous evidence session on 27 February.
As the committee knows, the main purpose of the bill is to implement proposals for electricity market reform. The reforms are crucial to Scotland’s future energy mix, to the maintenance of investor confidence and to the development of our vast renewables potential and carbon capture and storage technology in Scotland, and they will have a significant impact on the energy sector in Scotland. We have been absolutely clear that, in order to maintain the considerable momentum in the renewables industry, EMR must provide the same degree of market certainty that the renewables obligation system delivers and has delivered.
At the previous evidence session, I advised the committee that we were still in discussions with the UK Government to secure the best possible outcome for Scotland. There are some important issues to be addressed, including getting assurance that the right levels of support will be available for technologies where Scotland has natural advantages, and ensuring that Scotland’s engagement in the EMR process is robust, meaningful and clearly set out in legislation. I am pleased to say that we have made some progress towards those ends.
Last week, the First Minister met the Secretary of State for Energy and Climate Change, Ed Davey, and it was agreed at that meeting that the two Governments will proceed with a joint concordat to set out roles and responsibilities under EMR and to embed the principles of good working practices in an enduring framework. We are also continuing to work closely with the UK Government in establishing the new regime to support renewable electricity generation and, in particular, the first set of strike prices under contracts for difference, which will be consulted on later this year. That work is progressing steadily and, in the coming weeks, we expect to see outputs that will give us greater reassurance about the levels of support that are likely to be offered under EMR.
Given those positive developments and because of that work with the UK Government, I am now content to recommend the legislative consent motion to the committee for consideration.
I should perhaps make it clear that the purpose of the legislative consent motion is for the Scottish Parliament to give consent to provisions on the emissions performance standard, which include extending the executive competence of the Scottish ministers by conferring on them regulation-making powers. That will be legislated for by the UK Parliament through the Energy Bill. It does not mean that we are giving powers back to the UK Government; the area remains devolved and within the competence of the Scottish Parliament.
We are, however, subscribing to the uniform application of the EPS across the UK. We have done that because we think that the EPS strikes the right balance between investor certainty and appropriate support for decarbonisation. The UK Energy Bill represents an appropriate and proportionate legislative vehicle to enable the provisions to apply across the UK, while acknowledging the Scottish ministers’ powers in the area.
I know that there is great interest in the bill and I have scheduled a debate in Parliament on the matter for Thursday 16 May, to bring the wider EMR proposals back to the Parliament before the summer recess. The debate will afford the whole Scottish Parliament the opportunity to consider fully the impact of the proposals, and I hope that the Parliament will come to a consensus on the value of the provisions and the Scottish Parliament’s role in that regard.
As the Minister for Energy, Enterprise and Tourism, I invite the committee to agree that the relevant provisions of the UK Energy Bill relating to an emissions performance standard, so far as those matters fall within the legislative competence of the Scottish Parliament, should be considered by the UK Parliament. I invite the committee to support the LCM.
I am happy to respond to members’ questions.
Thank you, minister. It gladdens my heart to hear of such warm relations between Scotland’s two Governments as they work together on an important matter.
If the legislative consent motion is agreed to by the Parliament in due course, will there be further opportunities for the Parliament to scrutinise the EPS? Will it come to the Parliament by means of secondary legislation?
There are always opportunities for the Scottish Parliament to scrutinise work that is going forward. The EPS is one of the mechanisms that is proposed in the EMR legislation. The aim is to provide a regulatory backstop on the amount of emissions that new fossil fuel power stations can emit. The UK-wide EPS will apply to all new fossil fuel plant over 50MW-equivalent from 2014, and will become law from January 2014, following royal assent in 2013.
The purpose of the LCM is to enable the UK Government to legislate on matters within the confines of the LCM’s wording. I stress that we will retain power over renewables obligation certificates while working towards their replacement in the long term by contracts for difference.
We are, through the LCM, passing power to the UK Government to determine the matter in the context of electricity market reform legislation, but we do so on the basis of the work that has taken place, the assurances that have been given and the desire to work with the UK Government in the integrated energy market. We think that that is the right way to deliver electricity to consumers and gain the advantages for industry that renewable energy and CCS can provide.
We have already had an evidence session on the matter and probably covered quite a lot of the ground that we might cover today, but I think that members have a few questions to ask.
Minister, given what you said about remitting the power to the UK Government, if we agree to the LCM, how can the Scottish Government change the EPS in Scotland in future?
We think that it is sensible to work with the UK Government on the matter. Our aspirations for the future of Scotland after a successful result in the referendum next year are that we will continue to work positively with the Government at Westminster. That is how we think that we should work, because there should continue to be an integrated market that serves the interests of all concerned.
Given that that is the case, and given that that is the overriding objective and view of what is desirable and correct, it makes sense to reach agreement about important matters through a process of negotiation and discussion. Once agreement is reached, we proceed on the basis of that agreement. If good reasons to change a particular decision emerge, we will change it. However, there must be a process of working constructively and with good will behind the scenes, which I hope is exemplified by what we are doing.
The level of EPS will of course be set in the primary legislation. There are plans to review it after five years, which is a sensible period.
If the level is set in UK primary legislation, is there a mechanism that would allow a Scottish Government to change the EPS, other than through the UK Government re-opening the issue?
No. The agreement—[interruption.] Mr Macleod will give a legal opinion.
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Norman Macleod (Scottish Government)
The straightforward answer is that the devolved competence of the Scottish Parliament is not altered and the Parliament will be able to legislate in a devolved area in the same way that it can today. The LCM seeks consent for the UK Parliament to legislate in a devolved area, so it does not alter the Scottish Parliament’s powers.
If, next year or the year after, the Scottish Government decided that the EPS was not right for Scotland and wanted to change it, could it legislate? Is there nothing to prevent it from legislating?
There is no change to the powers of the Scottish Parliament.
It is a matter of practice; we are reaching an agreement. We are not planning to change anything. I have said before, convener, that I am not particularly keen on speculating on hypotheses and what might happen next year.
I am not asking for a hypothesis; I am just asking for a yes-or-no answer.
We are taking a decision now because we believe that it is the right decision. The legal advice is that devolved competence remains the same, so we could take a different view, but we do not expect to. We are taking a decision today as part of a bigger picture, in which we intend to get a good deal for consumers, Scotland, electricity supply and investment, and to take advantage of the huge opportunities that are available to Scotland. To advance those aims, we must have a practical system of reaching and sticking to an agreement with all involved, and that is what we envisage. The review will take place in five years’ time. We are proceeding on that basis, rather than looking into theoretical legal possibilities that might be postulated by members.
Thank you. However, my question was not about that; my question was whether we are handing power back to Westminster, or whether we still have power to legislate and change the EPS beyond the UK Parliament allowing us to do that. Yes or no?
Mr Macleod will correct me if I am wrong, but the legal advice that I have had is that our powers remain the same and are as conferred on us by the Scotland Act 1998. We are choosing to use those powers in the way that we think is correct for Scotland.
So you are saying, “Yes, we can.”
I have answered the question three times now.
I am having difficulty understanding why it is so difficult for you to say yes or no and why you cannot give me a straightforward answer.
Well, I have.
I do not believe that you have.
Well, we will have to disagree.
Can we move on? The Scottish Government has set targets for decarbonising the grid. Given that the EPS and where it is set will not encourage CCS, what steps will the Scottish Government take to ensure that its decarbonisation targets are met?
As Rhoda Grant knows, we are extremely keen to encourage carbon capture and storage. We are delighted that the exciting project at Peterhead has been awarded funding from the Department of Energy and Climate Change’s CCS commercialisation competition, which is a good result for Scotland. We worked behind the scenes to secure that result and we are delighted about it; the project is one of the most exciting in Scotland, and I hope that all members support it. We understand that the companies involved are proceeding and not being deterred, as Rhoda Grant seems to suggest.
A second project—the Summit Power captain clean energy project—was not successful in the capital element of the commercialisation competition. That, too, is an exciting project that might also take place in Scotland.
I am not aware that Summit Power is deterred in the way that Rhoda Grant suggests. I may have the advantage over her as I met the company recently. It is very keen to proceed in Scotland and did not talk of the decarbonisation target as a deterrent. It is very hopeful that an agreement can be reached. We are very supportive of Summit Power coming to Scotland, and we are working very closely with it, the DECC and everybody else to ensure that it has every chance of proceeding with the project, provided that it goes through the regulatory processes and receives planning permission, of course—we cannot be prejudiced.
The Summit Power project is a very exciting opportunity for Scotland. Perhaps Rhoda Grant has had discussions with the company, on which she can bring us up to date, but I am not aware that the company is being deterred by the EPS.
It appears to me—it does not take more than basic economics to figure it out—that if you are building a gas-fired power station and have the choice of building it with or without CCS, and there is nothing incentivising or pushing you towards CCS, you would not spend that money, because you would be competing with generators that did not use CCS. How do you make it stack up? At the moment, of course, people are keen, because Government funding is pushing that technology forward and people are willing to explore it, but how do you incentivise its long-term use for all fossil fuel power stations?
The Summit Power scheme is not a gas scheme—it is a pre-combustion coal scheme—and it could proceed by receiving an adequate contract for difference.
So CCS is dependent on Government funding well into the future.
The whole purpose of having EMR is to incentivise forms of electricity provision that require subsidy because they are young, immature technologies that have not been fully tried and tested. Carbon capture and storage is a series of technologies, each of which has been tested, but they have not perhaps been proven all together. I think that the convener questioned me on that point previously.
Renewables technologies such as wave power, offshore wind power and tidal power are at a relatively early stage of development, and that is the case for carbon capture and storage, too. Therefore, they require incentivisation. That is the whole point of EMR, and that is why we expect that CCS will have a strike price, a CFD and on-going income support. We and the UK Government thought that that was a good idea and, as far as I was aware up until this moment, so did the Labour Party.
We believe that it is a good idea, but we believe that we should set emissions targets to incentivise CCS. I do not understand how you expect to push all fossil fuel generators to install CCS if you do not have sticks, as well as carrots, to make that happen.
In theory, the bill provides a method for doing that—namely, the contracts for difference, which can provide sufficient stimulus for CCS to proceed. Through the use of CCS technology, the reduction in the amount of carbon that is emitted by coal, in the case of Summit Power if that project goes ahead, or gas, in the case of Peterhead, will be very substantial.
In other words, the whole purpose is to incentivise the technology that can deliver fossil fuel generation without the carbon emissions and which can store the carbon and perhaps use it for other purposes. For example, Summit Power uses stored carbon, both onshore and underground, for enhanced oil recovery in the USA, thereby delivering an additional income stream. Stored carbon is used to deliver more oil than would otherwise be recovered.
We are talking about very exciting technology, and it is absolutely right that there should be the appropriate incentivisation for its development in the UK and the European Union. That is basically the policy across the EU. The trouble is that up until now, nobody has delivered it. That is where we stand. The Scottish National Party wants Scotland to be at the forefront of the technology, not at the coo’s tail—that is why we are so keen. I hope that the Labour Party will support us in taking advantage of the opportunities that now exist under EMR to deliver the technology. My officials may have something to add—perhaps there are technical details that I have not covered.
Mike McElhinney (Scottish Government)
I will pick up on a couple of points. CCS is not the only form of low-carbon generation that, through contracts for difference, the electricity market reform process seeks to incentivise or to improve the relative economics of. Strike prices and contracts for difference will extend to all types of low-carbon generating technologies, including onshore and offshore wind power and wave, tidal and nuclear power.
Rhoda Grant spoke about carrots and sticks. Parts of the electricity market reform policy framework effectively constitute sticks for unabated carbon generation. There is a carbon price floor to make unabated fossil fuel generation less economic, relative to types of low-carbon generation that other parts of the electricity market reform policy framework are designed to incentivise. Therefore, there is a balance of carrots and sticks in the electricity market reform programme. The interaction of those is intended to improve the relative economics of low-carbon generation where there is an up-front investment hurdle to address, either through the deployment and capital costs that more established renewables technologies need or through incentivising the development of more recent technologies such as CCS, as the minister described. That balance of measures, therefore, is intended both to incentivise low-carbon generation and disincentivise unabated carbon generation.
For the record, I do not think that I made it clear earlier that while the captain clean energy project is not one of the top two projects supported by the commercialisation competition, it remains on the reserve list. That is very important. If one of the top two projects were not to proceed, that would give Summit Power an opportunity. I want to make that point to be fair to the company.
The Scottish Government has set a grid decarbonisation target that is different from the UK Government’s target. If the Scottish Government gives away one of the tools that it has to reach that target, how can it be reached? What tools are left? Saying that you aim to achieve the target is not good enough; you have to have something to make it happen.
I am sorry—I did not catch that question.
Katherine White (Scottish Government)
I will come in on that. First, although the Scottish Government has set a decarbonisation target of 50g of CO2 per kWh for 2030, the UK Government has not yet set a target. Therefore, it is not that we are at odds with the UK Government on that. The UK Government is setting a decarbonisation target in legislation through the Energy Bill. That target forms a major part of our discussions with the UK Government on the Energy Bill.
We recognise—and others have recognised, including the Committee on Climate Change—that the EPS is not designed solely to achieve a decarbonisation target. We have other mechanisms to try to achieve that, which principally consist of devolved measures through thermal consents and demand reduction energy efficiency improvements. We see those as a package—as a balance of measures—to achieve the decarbonisation target. Over time, we will develop more detailed understanding of how that will be achieved. We consider that it is achievable, and have done work to demonstrate that.
That is our target for 2030 and we are working with the UK Government on how it will set its own decarbonisation target for 2030, which it has committed to do, albeit not until 2016.
As Katherine White says, the bill will be amended to give the UK Government a statutory power to set a decarbonisation target from 2016. As part of our negotiations with our UK colleagues we have agreed that Scottish ministers will have a statutory role in setting the target at that point.
The First Minister announced a non-statutory decarbonisation target that we will start now to work towards. We are involved in the process of setting a statutory target in 2016—I think that our DECC colleagues claim that it is the first such decarbonisation target to be set in legislation in the world. The principle is one of working with the UK Government, because the achievement of the decarbonisation target is not something that the Scottish Government will deliver on its own. Working with the UK, we can take the right steps and put the right mechanisms in place to try to achieve that target.
Minister, you touched on the idea of an integrated UK energy market. I think that the co-operation of the two Governments in achieving that target is a good principle. However, a few weeks ago the committee had a visit from the European energy commissioner, who explained that he was very keen on an integrated European energy market. He commended that approach to us as offering energy security.
The commissioner did not seem to feel that national or political boundaries would be impediments to achieving an integrated market, provided that each Government co-operated in the way that the Scottish and UK Governments are co-operating. Do you commend that approach? Do you see a future that leads us towards a more integrated European energy market?
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We are certainly working towards that objective with others. For example, we are working with the British-Irish Council on the Irish-Scottish links on energy study—ISLES—project, which is being implemented with good will from all participants. Indeed, the project, which would see greater interconnection between the UK and the north and south in Ireland, would enable much greater integration. I understand that that project is further ahead than any other potential project in the EU—perhaps there is a greater enthusiasm for such a project than there is in other parts of the EU.
That is an example of work that is designed to move towards more integration between member states. After all, the greater the interconnectivity, the easier it is, in theory at least, to manage the grid because some grid management problems relate to intermittency, the variety of supply sources, and fluctuating costs, particularly in relation to fossil fuel, which have driven electricity prices ever higher.
The ability to have a European market in the long term—I am afraid that we are talking about a timescale of decades rather than one of single figures—will provide enormous potential benefits. Our approach is to work constructively with the EU, which we do with the Commission in Brussels, and our colleagues in DECC and in Northern Ireland and southern Ireland.
I have one further question. When I talk to people involved in the energy industry, they all tell me that there has been a considerable period of uncertainty, nervousness, frustration and concern about the passage of the UK bill. Do you agree? Compared with that bill, however, they feel little nervousness about the possibility of constitutional change in Scotland.
Just say yes, minister.
That is a serious question that deserves to be taken seriously, convener.
There is undoubtedly a risk—which has been expressed by industry and by leaders of utility companies in particular—to investor confidence because there is no set of rules to replace ROCs. If you have a market that requires incentives but you do not know what those incentives are in the UK even though you know what they are in Germany, it is difficult to see why it would be reasonable to expect a board of trustees or investors to come to the conclusion that they should invest in a place where there are no clear rules. That is where we are with projects that cannot be commenced until beyond 2017 and, therefore, will not qualify for ROCs.
As a matter of fact—I do not think that I am making a political statement or one of great controversy in saying this—there is a hiatus because it has taken so long to get to this stage. As long as that hiatus exists, it is difficult to build on the successful work that we have achieved in attracting so many companies to Scotland or for them to make a commitment—to manufacture turbines for offshore wind, for example—if they do not know what the rules are.
Incidentally, that is also why the 2030 decarbonisation target is the right approach and why we will urge the UK Government—as was done recently by the House of Commons committee looking into decarbonisation—to bring forward its plans from 2016. We seek to persuade it to do that because, to put it bluntly, if we want a turbine manufacturer to locate in the UK but it thinks that there is no clear vision of Government commitment beyond 2020, it would not make a great deal of sense for it to create a factory for only four or five years’ worth of work.
That simple argument lies behind the commercial rationale for having a 2030 decarbonisation target. We think that we may have some support in the UK coalition for that view but it may be that division remains in the ranks. Nonetheless, we will continue to have positive and amicable discussions in that regard.
Thank you for that question, Mr MacKenzie. It was not the most difficult question that I have had.
Were it not so late in the morning, minister, I would be delighted to pursue that argument with you, but given the time we will stick to the matter in hand. I will bring in Alison Johnstone.
During the last evidence session on the LCM, the design of the strike price for carbon capture and storage was identified as a key determinant for negotiations. I notice that in your opening remarks, minister, you mentioned that there is a joint concordat to take forward energy market reform and that the first set of strike prices will be confirmed later this year. Are negotiations going as well as you might hope, and are you confident that there will be an agreement that meets your requirements?
I will pass the question to Mike McElhinney in a moment, but I can say that we are working positively with DECC to see that the strike prices that are proposed have the right balance between the interests of the consumer and the interests of the investor industry—in other words, that the level of incentive will be the right level. Setting aside the politics, those are genuinely very difficult matters and it is wrong to pretend otherwise.
There will be an announcement of the strike prices but as I understand it—Mike McElhinney will correct me if I am wrong—that will go to a consultation and there will be a chance for debate on all of those matters. That is a good thing because I do not think that the Government should say, “This is the way that it is going to be,” without there being a good engagement, especially with those in industry who have to deliver the projects. They will have the opportunity to submit evidence so that we can arrive at the correct prices as a result of that process.
To answer Alison Johnstone’s question, I am concerned that the strike prices should cover all Scottish interests, particularly as one means of providing a solution for the island charging mechanism, which I have spoken about at some length at previous meetings. For the record, I state that that is a top priority for us. As I have mentioned already, CCS projects need a strike price, they need support and we want to ensure that that is correct as well. We disagree with the UK Government’s desire to see a number of new nuclear power stations. On financial grounds we think that that is the wrong approach, and I state plainly that that remains our position.
I hope that, at a general level, that answers Alison Johnstone’s question, but perhaps Mike McElhinney could give some more detail.
The minister outlined the position as it is at the moment.
On the process side, we have been working on a mechanism with DECC colleagues since last November, as part of a devolved Administration consultation group, and with our colleagues in Northern Ireland and Ireland. We have also been working with National Grid—the EMR delivery body that will set and maintain the strike price mechanisms—to assess a robust, defensible and evidence-based approach for setting strike prices for different types of technologies.
That assessment involves such considerations as levelised cost prices for different types of technology, the current levels of support and the capital and deployment costs. All of that analytical detail has been going on in parallel with the parliamentary process. That is coming to a conclusion and we are very excited that we will see the draft strike prices on 1 May. Certainly the civil service part of us is very excited—[Laughter.]
You have a quiet life.
Quieter than sometimes I would like.
We will then be into the process that the minister outlined, and we will have to brief the minister on whether we think that the strike prices are in the right range for what we want to deliver with the technology strengths that we have in Scotland. We have also separately kept in very close contact with players across the technologies in the Scottish energy sector to understand what kind of strike price they would like us to deliver for Scottish developers.
By the end of June, DECC will have published a draft delivery plan that will set out the strike prices. That will be followed by a period of public consultation with a view to finalising the strike prices in the autumn. Not only is that process in place, but the concordat that has been referred to puts it on an enduring footing by setting out the forward principles on which it will take place.
As the minister has suggested, the concordat will cover the progress on transmission charges with regard to the islands.
At the same time as signing the concordat, we have been working on a joint statement from Scottish and UK ministers on what we will do in response to the intergovernmental steering group on renewables, on which we and our DECC colleagues have been hard at work. A consultant’s report that we commissioned has assessed and identified barriers to deployment of renewable technologies on each of the main Scottish island groups—the Western Isles, the Shetland Islands and the Orkney Islands. The draft report is nearing the final stage and we intend to publish it shortly.
Alongside that, an assessment process has to be carried out on the options for addressing the challenges faced by developers on each of the islands. We hope to make that aspect of the concordat process part of the joint working that we have developed to the point that Scottish and DECC ministers can give a degree of certainty to developers on the islands that the mechanisms that might apply and the options and interventions that might be necessary to improve the relative economics of renewable development on the islands are delivered jointly and seamlessly. A particular challenge in that regard is to develop those things quickly.
I have one more question, convener.
I will allow Chic Brodie to ask a follow-up question on strike prices, and then I will let you back in.
I want to follow up Mike MacKenzie’s question, convener. I have only met Ed Davey briefly at a committee meeting, but I have exchanged correspondence with him on the subject of subsidies to nuclear plants, to which the minister has just alluded. When I asked Ed Davey to confirm the situation in that regard, he said that of course there would be no subsidies, but on page 2 of his response he confirmed the minister’s comment that decommissioning costs will impact on the strike price. Given Sellafield’s view that it will cost £65.5 billion to decommission—and given the UK Government’s rush towards nuclear plants—I can only imagine the relative position of that kind of move.
I have no real problem with the LCM but, on the minister’s point about investment, I wonder whether the potential situation with nuclear plants might mean that investment could be divested from other areas of low-carbon electricity generation. What will happen if the strike price for nuclear energy is set at a level that we find unacceptable after we pass this particular LCM?
As our principal view on new nuclear power stations is clear, there is no point in restating it. We also support the view that existing nuclear power stations that are run professionally and well should be allowed to continue—that is only sensible.
Mr McElhinney will correct me if I am wrong, but my understanding is that it is unlikely that any new nuclear power station can be built before the end of the period of the existing levy control framework. As a result, despite the concern that, with a fixed pot, any subsidy for nuclear reduces the subsidy or financial incentivisation for other forms of energy—I think that the figure in the levy control framework is £7.6 billion to 2020—logic suggests that if, as seems likely, the new nuclear power stations cannot be built before then they will not be in a position to use up any or much of that money. Of course, that might not be the answer that Mr Brodie was expecting.
On a principled level, we think that, if the view is that CCS is one of the essential elements of meeting the 2030 target for decarbonising electricity produced through fossil fuels—and indeed is a sine qua non of Europe meeting its own target—we want to get on with it. We do not want to plough lots of money into new nuclear power stations if money is always going to be finite and under pressure because of tough economic conditions.
Those are legitimate arguments, which I suspect will probably take place within the UK coalition. I do not think that they are resolved yet. Mr Brodie is right to raise an argument that may not, at first sight, seem to affect renewables or CCS but which will do so by potentially delimiting over the longer term the total amount of cash subsidy that will ultimately come from the consumers to deliver a modern, decarbonised electricity supply in the UK so that decarbonised sources provide a much greater proportion of the total electricity supplied.
I do not know whether that covers the question. Mike, do you have anything to add?
12:30
Again at the policy and process levels, new nuclear power stations will be eligible for a strike price for contracts for difference. That will have an impact on the overall levy control framework funding that is available and, following that argument through, it will then have an impact on what is left available for other low-carbon generating technologies.
We have been trying to stay close to the negotiations that our DECC colleagues are having with the first new nuclear development in England with EDF at Hinckley Point, where there is a process in place to arrange a bespoke strike price for first new nuclear. We are very keen to understand the financial implications of that. We have an agreement with DECC that, when that stage is reached, we will see the relevant information. We will be able to make an assessment in the relative context of the remaining levy control framework funds. Therefore, there is a potential policy tension.
We will take Alison Johnstone’s final question.
Would a refurbished Cockenzie power station fall under the new regime?
I will take that one. Just to clarify, there are conditions whereby some major refurbishments will trigger the emissions performance standard, but I think that it would depend on the nature of the refurbishment and then probably the technical detail under the secondary legislation.
I was thrown by the term “refurbished”. I think that Cockenzie was coal fired. I do not think that there is any suggestion that there is going to be a coal-fired refurbished power station at Cockenzie.
No, indeed.
Do you mean the question of whether there will be a new, gas-fired power station at Cockenzie?
Yes.
Scottish Power already has consent to build a combined-cycle gas turbine power plant at Cockenzie. The consent is based on a number of conditions, one of which is that it is carbon-capture ready and that carbon-capture technology is deployed when it becomes commercially viable to do so. The consent is well set out to show that there is a process whereby Scottish Power would be expected to report regularly in the future on whether the commercial deployment stage had happened. Ultimately, the decision on whether Scottish Power will develop the Cockenzie site is a commercial matter for the company.
I should clarify that, if the gas plant at Cockenzie proceeds on the current consent, it would not trigger the EPS, because the EPS deadline is after when the consent was given. I am sorry that description is a bit convoluted, but it is a new thermal plant and because the consent was given prior to the bill being tabled, a plant built on the consent would not be subject to EPS.
Thank you.
As there are no other questions, we can draw the session to a close. I thank the minister and his officials for coming along.
Just before we go into private session, I confirm that the committee will consider its recommendation and draft report on the LCM at a future meeting and not at this meeting. Do members agree to take in private our future consideration of the draft report on the LCM?
Members indicated agreement.
With that, we move into private.
12:33
Meeting continued in private until 12:43.