Our ref: MCB2020/27654/NB
1 September 2020
Dear Michael and Fiona,
Thank you for your letter of 3 August, regarding the recent launch of the offshore transmission network review.
I appreciate your support for the recently launched offshore transmission review. My Department is aware of the importance of this work in balancing the need to increase our renewable capacity whilst minimising the costs to the environment and society where possible. In response to your questions I would like to offer some additional detail regarding how the review is being run and the next steps we have planned.
The terms of reference (ToR) for the review were developed collaboratively between my Department and the other organisations involved in the delivery of the review, including Ofgem, National Grid ESO and The Crown Estate. We published the ToR to signal to interested stakeholders that we are committed to investigating how the current regime could be amended to alleviate the concerns being raised by groups such as your own. We also wanted to ensure that it is clear to stakeholders that the work already underway by some organisations forms part of a broader, centrally led, project.
The ToR clearly establishes two separate strands of the review, one to focus on the medium term to explore what can be done within the existing framework, and one to design and implement an enduring regime for the longer term. This approach is designed to account for the different stages of development of projects already in the pipeline. Due to the long lead times for offshore wind projects (8-10 years) many projects connecting before 2025 are either already consented or nearing the end of the consenting process. Introducing regulatory uncertainty and changing plans for well advanced projects would increase costs for consumers and make meeting ambitious 2030 and 2050 targets even more challenging. However, the review does commit to consider opportunities for projects at an earlier stage of development, and how these can be incentivised.
My officials will take the overall lead in the review, drawing together the expertise of the organisations involved in the delivery of offshore wind. As you mention in your letter, we are also seeking to establish an independent expert group of technical experts. The role of this group is to scrutinise the outputs of the review and provide critical feedback from an independent standpoint. We are currently working to develop the terms of reference for this group to ensure it is able to offer impartial advice and to design a transparent process for recruiting the members.
At present we are working closely with the other organisations involved in the delivery of the review to fully develop the program of work. Once complete, we intend to share this detail with a broad range of stakeholders at a virtual webinar in the Autumn. Our intention regarding the enduring regime is to communicate the direction of travel during 2021; as you rightly state, this is a very complex issue that touches on many policy areas across several organisations. We do, however, expect that a significant portion of the work will be completed during 2021, so that clarity can be provided for those projects connecting after 2030.
I understand the importance of engagement with stakeholders, including groups such as SASES and SEAS. As work progresses the review will provide regular updates for external stakeholders to ensure progress of the review is communicated and that there is early and regular opportunity for challenge. For example, my policy officials leading the review regularly attend the Suffolk Energy Coast Delivery Board to give updates. Further information on how you can engage with the review will be shared on the Government website in the Autumn.
Finally, regarding the current DCO applications, as these will be for the Secretary of State to determine, I cannot comment on these specific applications. However, as outlined above, the timing of the review and the outputs are not expected to have an impact on projects at an advanced stage in the planning process. When making decisions on applications under the Planning Act 2008, the Secretary of State will, of course, have regard to any matters which he thinks are both important and relevant to his decision.
Thank you again for taking the time to write. I hope you find this information useful.
RT HON KWASI KWARTENG MP
Minister of State for Business, Energy and Clean Growth
Looking at the existing regimes, questions have arisen regarding the suitability of the current regulatory regime for offshore wind. It is currently heavily concentrated on competitiveness, which is considered beneficial for consumers. That means that currently there is no sharing of infrastructure, and each wind farm has an individual connection to transmit the power that it generates. There are three material concerns with this: it is financially inefficient; it has a negative environmental impact; it may have a negative impact on coastal communities where connections make landfall.
Eight Offshore Wind Energy Projects are widely believed to be planned to connect to the National Grid at Friston (this does not include future windfarm projects as a result of the seabed leases awarded by the Crown Estate in relation to the Round 4 process). Cumulative impact means eight substations and interconnectors constructed sequentially or consecutively. Plus, the addition of a nuclear power station, one of the largest in the world. This will be the largest complex of energy infrastructure in the U.K. situated in one of the most fragile ecosystems in the U.K. These are judged to be ill-conceived plans where the process of choosing the site for the mega infrastructure hub is shown to be flawed. There are a number of better alternative brownfield sites for this designated vast complex.