Tidal Power

HL Deb 13 January 2004 vol 657 cc536-52

7.53 p.m.

Lord Hooson rose to ask Her Majesty's Government whether they will explore the potential of harnessing tidal power to produce electricity; and in particular whether they will set up a full study of the feasibility and cost of harnessing the tides in the Severn estuary.

The noble Lord said: My Lords, my Unstarred Question affords an opportunity for a brief debate on a subject—two subjects—that will become very important in the coming months and years. My Question is divided into two parts. The first is the general question of exploring the potential of harnessing tidal power to produce electricity. The burden of what I have to say is virtually this: the Government should give greater priority to harnessing tidal power, rather than wind power. The second part of the Question refers to a full study of the feasibility and cost of harnessing the tides in the Severn estuary. An enormous amount of work has already been done, and I am virtually suggesting that the time has come for us to consider the work that has been done and bring it up to date. There is enormous reason for doing that.

As I waited in the Library, kicking my heels, until the debate, I looked up a definition of the Severn Bore in the encyclopaedia. As I did so, an extremely helpful researcher came up to me and asked whether I would like her to find it on the Net. In no time at all, she produced this document, which I shall quote: The Severn bore is one of Britain's few truly spectacular natural phenomena. It is a large surge wave that can be seen in the estuary of the River Severn, where the tidal range is the 2nd highest in the world, being as much as 50 feet". That is why, at the risk of being regarded as a Severn bore myself, I come to the second part of my Question. We must look anew at the potential of the Severn estuary.

I have no expertise in this sphere, nothing like the expertise that was shown in the debate that I listened to and read, which was introduced by the noble Lord, Lord Tombs, last Wednesday—7 January. The House discussed the generation of electricity generally in this country and pointed to the vulnerability of the system. That is the background to this debate.

In the energy White Paper, published in 2003, the Government proclaimed that 10 per cent of the United Kingdom's fuel mix for electricity generation must come from renewable sources by 2010. Later, that target was extended to 15.4 per cent by 2015. That means that renewables must multiply their contribution by 500 per cent by that date. Has wind power any chance of achieving that? Judging by the contribution to date, I would say, "Not at all". Judging by the contributions in the debate introduced by the noble Lord, Lord Tombs, the reliability of wind power-generated electricity is in doubt.

The reason why we have tended to go in the direction of wind power is the subsidy. Can the Minister tell us the amount paid in subsidies for wind generation hitherto? Are the Government satisfied with the reliability, viability and cost of that being the prime renewable source? Where does the money come from? Is it all European Union money? If so, has any attempt been made to make sure that such subsidies would also be available for research into the development of tidal resources?

As your Lordships appreciate, a great deal of research has been done into the feasibility of utilising the great potential energy of the Severn tide to guarantee electricity. There was a general report on the project, and I have a copy here. It is Energy Paper Number 57, The Severn Barrage Project. Even more important—at least, I found it more interesting—was a document published by the Institution of Civil Engineers. It held a symposium of experts to consider all the evidence that had been put before the committee investigating the matter. I should like to quote one sentence from the contribution of an expert, who I do not know at all, which sums up my view. The expert's name is Mr Rydz who, incidentally, also gave evidence to the House of Commons Select Committee on the same subject in 1975. He said: The barrage remains the only convincing large scale source of renewable energy". I think that that is still the situation today. He continued, and it would be prudent in present circumstances to get 5 years closer to its possible realisation at the present estimated cost". That was 20 years ago. I am sure that those were very wise, sensible words.

It may be helpful if I pose a number of questions to the Minister, from which one can divine my view on the matter. First, do the Government accept that the tide is a much more predictable, powerful and secure potential source of electricity generating power than the wind? Secondly, do the Government accept that the Severn estuary, with one of the largest tidal ranges in the world, is an ideal site for harnessing the major renewable tidal power to produce electricity?

I think that I am right in saying that the Government have provided a fair number of subsidies in Wales, together with the Welsh Assembly, and in Scotland, to further research on utilising tidal resources. I am sure that there have been many others. Southampton University has produced a study recently, which I read with interest. Finally, do the Government accept that the development of turbine technology and heavy engineering methods has moved on enormously since the last conclusion on the Severn barrage project took place in 1989? There has never been an era in which there has been so much available detail and practical knowledge of the likely attendant problems of developing and utilising the Severn barrage than now.

Perhaps I may give a recollection from my own experience. I have no expertise in this matter, but I acquired a certain detailed knowledge of the Severn river estuary when I was chairman—invited from outside with no expertise as such—of the international consortium which became the Severn River Crossing PLC. I saw at first hand the power of the tide in that estuary. I received the comments of engineers and visiting experts from all over the world, who pointed out that it was a shame that this great resource could not be utilised. I reflected then that we were building a great bridge across the River Severn when, certainly, it would have been feasible for the project perhaps to have been a barrage with a road across it.

It is time therefore to look anew at the whole potential and to revise our previous views. Perhaps I may now turn to the issue that, in the past, was always raised with regard to the building of a barrage; that is, the initial cost would be very high. But the cost of running an electricity-generating facility there would be very much lower than the normal electricity generating facilities because the raw material—the tidal water—is free. Therefore, the initial cost is what matters.

With regard to that matter, I should like to point out that there is a successful barrage—as most of your Lordships' will know—at the mouth of the Rance river estuary in France. I think that France and ourselves were level pegging on skills and knowledge of these matters then. But France, with a far less ideal river estuary, put plans into operation. It took the decision, and now has the only major tidal generating station in operation in the world. Many of your Lordships will be aware of experimental facilities at Annapolis Royal in Nova Scotia and at a plant near Murmansk in Russia. I have seen various estimates, and the Severn river barrage often has been estimated to be capable of supplying 10 per cent of the country's electricity needs, given the latest developments in technology. There has been one estimate of 20 per cent and another estimate as low as 5.6 per cent. The main stumbling block is the potential capital cost of the project. I therefore turn in particular to the question of cost. Nobody these days would sensibly start to build such a barrage simply by means of a capital sum advanced by government. Private enterprise would have to be involved and financial expertise recruited at an early stage to consider the attractions of a scheme.

I suggest therefore that if the Government decide that this matter should be explored, they take financial advice at an early stage. I have already adverted to the fact that, had it been considered in time, the main road artery between England and Wales, now supplied by the second Severn crossing, could have been supplied by building such a road across the top of the barrage. But one thing I learnt from my experience at that time was the skill needed by the financial advisers—in that case the Bank of America and Barclays ZW from Europe—in putting such a scheme together. Competing tenders had to be submitted for the building of the second Severn crossing with all kinds of different organisations competing for the franchise. The banks also investigated all the possible uses to which the bridge could be put.

Nobody would sensibly look at the building of a barrage today without questioning to what uses it could be put other than for the generation of electricity. I referred to a possible road crossing. But, depending on the siting of the bridge, investigation has to be made as to whether there is scope for another toll bridge. There may not be.

It would be necessary also to consider with Railtrack the position of the Severn Tunnel which carries the railway between England and Wales. It is a masterpiece of Victorian engineering, as are most of our masterpieces, but it is in great need of restoration in places. We know of some of the difficulties it is experiencing and when looking into the feasibility of the barrage, an investigation should be conducted by the Government—for it is a major artery of communication in this country—as to whether or not the railway could go across and thus replace the present tunnel. Those matters cannot be considered in isolation but the tendency with schemes of this kind is to consider them in isolation. The whole potential of the barrage must be investigated.

I have utilised my time. I am grateful for the opportunity of opening this short debate. I am grateful to my colleagues, and am particularly grateful to the noble Earl, Lord Attlee, who has come with a great sense of duty from his recent work in the defence debate.

8.11 p.m.

Lord Livsey of Talgarth

My Lords, it is a great privilege to follow my noble friend Lord Hooson in making the case for increased use of tidal power, in particular the possibility of a Severn estuary project. I declare an interest in that I have a son who is an engineer. He is still young but might one day perhaps become involved in such a project.

The second Severn crossing, to which my noble friend referred, was an excellent project in which he was involved. He is rightly proud of the work that was done. It is particularly appropriate that my noble friend introduced this debate tonight. Not only was he involved in the second Severn crossing, but he actually lives within earshot of the infant Severn in mid-Wales; so he sees the start and the finish.

In my younger days I used a ferry crossing from Beachley to Aust on my way to my higher education course—I hesitate to say on my bicycle, but I put my bicycle on the ferry and crossed the river when there was no bridge. On the other side I got on my bike and rode to my higher education college. I found those trips particularly interesting with the surge of the Severn.

One must acknowledge that the Severn has the second highest tide in the world with a massive volume of water moving twice daily. Of course, we must ask whether we should concentrate on producing tidal power through electricity from the Severn, or cast the net wider into the general principle of using more sources of tidal power throughout the United Kingdom. I think that a case can be made for both. My noble friend Lady Miller, who will sum up the debate for these Benches, will mention many other sources of tidal power.

Speaking as someone who comes from Wales, I can attest to the great interest being expressed in the potential to produce electricity from the River Severn. Certainly it has been discussed for some 35 years in the political movement in which I am involved and a number of proposals have been made. As my noble friend Lord Hooson said, a number of assessments have been made over the years, and the case for a feasibility study is very strong.

Both sides of the Severn estuary are accessible to large populations. A barrage could combine a road and rail link or a rail link which could eventually be plugged into the European system. Both Wales and the West Country sorely need electrically powered trains. We are falling far behind both the West Coast and East Coast main lines in that respect. Not only could this source of tidal power improve transport links, but given the proximity of industry on either side of the Severn estuary, the production of cheap electricity could put it into a much more competitive position than is the case at present. I believe that the increased economic benefits would go far beyond those derived simply from producing the electricity itself.

It would also be possible to site an international airport in conjunction with the development, with consequent job creation on both sides of the estuary. That proposal should be looked at as well.

However, the downside of all this—and it is a big downside—is that such a development would have a serious effect on the aquatic ecology of the Severn estuary and surrounding environmentally sensitive areas. The problems should not be underestimated.

I turn to the detail of the economic impact of developing the Severn estuary. The steel industry in south Wales is still important, although we have seen a sharp decline with no sign of an upturn. Undoubtedly, cheaper electricity would make south Wales steel much more competitive internationally. Shipping, manufacturing and service industries could all benefit and the provision of these electricity resources would create greater economic growth. By how much, we do not know, but very proficient university departments are situated on both sides of the Severn in Cardiff, Swansea and Bristol. I am sure that they would become involved in assessing the economic impact.

When considering the creation of electricity from tidal power, we are of course referring to renewable energy. It has been calculated that energy from renewable sources could provide 30 per cent of the total electricity demand in Wales. Indeed, it is calculated that a minimum estimate of 5 per cent of that electricity demand could be met by hydro power. It is a clean, renewable, 24-hour energy resource as opposed to the intermittent and unreliable supply of wind power. It is also non-polluting in terms of electricity production, but the jury would be out on the impact a barrage over the Severn would have on water pollution levels.

The environmental impact could be catastrophic if the development is not managed properly. A huge volume of water comes down the River Severn during the floods. One need only visit Gloucester, for example, during the flood season between October to the end of February to witness the enormous problems that can be created by those floods. All that has to be measured.

Further, there would be a massive impact on the salmon fisheries, although in fact they have already been devastated at sea. The River Wye has hardly any salmon in it at present, but it is hoped that European projects aimed at re-sourcing the River Wye will bring it back to its former glory. However, much better provision has to be made for the passage of migratory fish if a barrage is to be put over the River Severn. Without exception, all the ones that I know of are totally inadequate for the passage of salmon, particularly for young fish going out to sea, which are massacred in many of the fish passes. That is a big problem because it has an economic benefit which spreads throughout the hinterland of the Severn, the Wye and the River Usk, for example, on the Welsh side of the Bristol Channel.

Obviously there is the downside of a possible great loss of wildfowl nesting sites. One has to know only of the work of Peter Scott at Slimbridge to realise the importance of the wildfowl nesting birds and the dependence that they have on the Severn estuary. That is a very sensitive matter indeed.

There would also be a huge impact on SSSIs on both sides of the channel, particularly in regard to wild plant species. One has only to mention the Gwent levels in an international context to realise the importance and sensitivity of many of the sites surrounding the Severn estuary.

I have stood on the Rance tidal power station in Brittany and I have been impressed by its creation and the benefits it has brought to the French economy, particularly in a part of France that has not been best known for good economic development in the past. It was a very far-sighted development.

If the barrage is to come about, its exact siting in the Severn will be absolutely crucial. Will it be upstream or downstream of Cardiff, for example, and what effect will it have? Some people say that it should go from Sully outside Barry across to a point near Bristol. in my view, that would be too low down the Severn, but a feasibility study has already been carried out on that possibility.

I should like to praise the National Assembly Sustainable Energy Group, which has proved to be one of the most successful of the Assembly cross-party groups. Last year its members set up the innovative tidal power technium to look into how Welsh tidal power can be utilised. The systems used, as advocated by Tidal Electric Limited in Swansea Bay, are ecosystem-friendly and not based on damming or barraging.

This is a huge subject and a great deal of research and development must be carried out before any conclusions can be reached. An environmental impact assessment is essential to evaluate, for example, the impact on the water ecology and surrounding areas. A cost benefit analysis is also essential in order to line up capital investment versus output, to decide over what period of time the capital will be written off and what impact that would have on the benefits. I agree with my noble friend Lord Hooson that no scheme can be contemplated without a comprehensive feasibility study.

Given the UK's commitment to the reduction of global warming at the international conferences held in Rio and Doha, and, in particular, the Kyoto protocol, the feasibility study should indicate whether massive reductions in the emission of greenhouse gases in the UK could be sustained by such a development.

There are many unanswered questions about the feasibility of the Severn project going ahead. but we cannot come to a conclusion without some very objective analyses indeed.

8.25 p.m.

Baroness Miller of Chilthorne Domer

My Lords, I thank my noble friend Lord Hooson for introducing this very interesting debate this evening. I thoroughly agree with him that we should make much more innovative use of the rise and fall of the tide in the Severn estuary than the Government intend. I am not sure whether it is the second or fourth highest in the world. I understood that it was the fourth highest tidal range in the world. Nevertheless, we can all agree that its tidal range is enormous.

I disagree with my noble friend that the Severn barrage is the answer. The barrage has some of the drawbacks that my noble friend Lord Livsey referred to. Perhaps the most exciting prospect would be to harness the power of the Severn without the drawbacks that a barrage can bring.

Is the Minister aware of two designs that are at an experimental stage at present? They both harness the power of the Severn, without having the drawbacks of the barrage. The first was referred to by my noble friend when he mentioned the scheme being developed by Tidal Electric Limited—the Environment Trust. It is based on tidal lagoons into and out of which the tide flows. Both the ingoing and outgoing tide drives turbines. Some costings have been done. The cost of power from tidal lagoons is put at 2p per kWh, which compares extremely well with nuclear power which is 4p plus capital grants, offshore wind which is 5p plus capital grants, tidal barrage which is 8p plus capital grants, and onshore wind which is 2.5p to 3.5p per kWh. It is an economic form of power.

Added to that, it has low visual impact because it is only a metre high visible at high tide. It is built of natural materials. It reduces dredging requirements. It creates wildlife habitats—a point that has been backed up by English Nature. I should be interested to hear from the Minister the advice, if any, that the Government received on its potential for habitat.

It does not block navigation, nor impede fish migration. It does not change the shoreline, or damage inter-tidal habitat, and it does not change salinity. It therefore seems to have a lot going for it. The equipment life is 50 to 100 years because it has low stress. It is not experimental technology. It has been proved to the point that the Government could choose to take it on as they have taken on offshore wind power. As my noble friend Lord Hooson said, given the enormous backing that offshore wind has received, I wonder why tidal lagoon technology has not received a little more financial support from the Government.

The second example is now taking place off the coast of Lynton and Lynmouth. It is almost like underwater wind turbines, but they are underwater tidal turbines. They use the tide to drive the turbines. The one currently being used is a single turbine mounted on a single pile. The person who has pioneered those, whom I have not had the privilege of meeting, is described in Marine Scientist as the current tidal—pioneer Peter Fraenkel. He envisages that in a short time we could have a tidal turbine farm, which would be a group of double rota machines linked to shore by a single marine power cable. The community of Lynton and Lynmouth is interested in that technology. When communities are interested in benefiting from and helping to develop such schemes, what potential is there for local authorities to get some form of capital funding or help from the Government by way of loans? In that way, they could start developing their own energy from which they could benefit. That sort of help would be very welcome indeed.

One of the difficulties that tidal technology has laboured against is the perception that it is stuck in the 1980s. Nodding ducks, for example, were an exciting development at the time, but the then Government did not choose to build on that work and develop it, as it was felt not to have sufficient potential. However, times have moved on.

I have already referred to Marine Scientist magazine. I was very struck by its use of language in describing the different technologies available now. I should like to give a couple of examples. The Sea Clam, the technology of the 1970s and 1980s that utilised wave power, had giant compressible bags held against a floating cylinder, with the wave action squeezing air out of them to drive turbines". That was not found to be particularly effective. Now, however, in 2004, the Pelamis is a series of articulated cylinders tethered at the nose, so that it meets the waves nose on and generates energy from the snaking motion caused as they run down its flanks". Not only would that be interesting to see, it is a very good example of how a scientific magazine can use quite exciting language to get its point over.

I should like to sum up my small contribution by asking the Minister whether he believes that if electricity can be generated at a cost of between 2p and 3p a unit from a non-renewable source, that is worthy of far more government investment in supporting the research and development. Once it had moved beyond the experimental stage, the Government could support communities, whether at a regional, local or national level, to develop this very important form of energy, which could supply as much as 20 per cent of our needs by 2020. The Tidal Electric people believe that by 2010 it could be supplying 10 per cent of our needs, which is the Government's target.

8.33 p.m.

Earl Attlee

My Lords, I, too, am grateful to the noble Lord, Lord Hooson, for introducing this short debate. I just hope that the Minister takes careful note and takes action in the way that the noble Lord suggests.

It is always delightful to engage in debate with the Minister, but why is Defra's Minister responsible for sustainable energy, the noble Lord, Lord Whitty, not responding tonight? I find it quite confusing about which Minister will respond, although I accept entirely that the Minister answers for Her Majesty's Government.

I found the White Paper extremely disappointing because it contained no detailed discussion of tidal power. The White Paper said that the barrage would be very expensive but there is no comparison of costs with, for instance, new nuclear build or onshore or offshore wind power. However, no other technology appears to offer such high-energy density—6 per cent of the UK demand—from one project.

The While Paper rightly touches on the environmental impact. The noble Lord, Lord Livsey, said that it could be catastrophic, and it certainly could be. But it could be positive or it could be negative, and we need to find out. No doubt the project could change habitats. If so, we need to consider whether it is desirable.

It is obviously a very expensive project, about £10 billion has been suggested. Again, there is no discussion of the cost in the White Paper. The projected cost of electricity from the project would be heavily dependent upon the discount rate and the payback period of the project. In 1999, a Select Committee of your Lordship's House suggested 7p to 8.5p per kilowatt hour, depending upon the payback period. It might seem expensive now, but it might appear to be cheap in times of energy famine.

Many large infrastructure projects do not appear to be commercially viable at the outset, but end up being highly desirable. An obvious example is the Channel Tunnel. The noble Lord, Lord Hooson, made important suggestions about the financing of any project. I understand that the barrage would be about 16 kilometres long, but a major cost of offshore wind power is the piles to support the turbines and the masts. There are obvious offshore engineering challenges, and erecting wind turbines on the barrage might offer significant economies of construction of wind turbines and would produce a lot of useful extra power. The noble Lord, Lord Hooson, also made a suggestion about replacing the Severn railway tunnel, and I have some anxieties about the long-term integrity of the tunnel.

As many noble Lords have suggested, power supplies from the tidal barrage would be extremely predictable. The difficulty is the intermittency, the off-peak cycles and the requirement for transmission enhancement. However, those difficulties apply equally to wind and are surmountable.

In the long term we may move to a hydrogen economy, and that will require very large quantities of electricity to generate the hydrogen. This would he an ideal use of off-peak power production. Tidal power would be very useful for energy-intensive industries, which could be located near the barrage—the noble Lord, Lord Livsey, mentioned the steel industry in South Wales. He also asked if we could cast our net wider than just a tidal barrage. I, too, have been briefed on tidal lagoons, which were mentioned by the noble Baroness, Lady Miller of Chilthorne Domer. It is an interesting technology, on a smaller scale than barrages and offers less environmental impact. As she mentioned, you can have three lagoons associated with one turbine set, which evens out, but does not eliminate, the peaks and troughs of power supply. Again, there was nothing of substance on this in the White Paper.

I recently tabled some Written Questions about tidal lagoons, and I have to say that the answers from the Minister appeared to be rather unenthusiastic. The noble Baroness, Lady Miller, quoted costs. It would have been useful to see such data in the White Paper, with the benefit of a sanity check from the DTI because sometimes proposals are a little bit optimistic, although I am certainly not disputing her figures.

The small schemes described can easily be trialled, but a barrage cannot be trialled. We cannot test the technology; it has to work first time or the project will fail. Any barrage project will require primary legislation, particularly if we know that the environment will be altered. It will certainly require alterations to the way that the electricity market operates, which is again a matter for government policy.

Industry cannot be expected to pursue this project without at least some hope that it might come to fruition. If the Government are so set against exercising the nuclear option, they must look at alternatives. Very little else offers the energy density or the reliability of the Severn barrage. Each option must be identified as a possibility or discarded as impractical and, even then, the feasibility needs to be reviewed every decade, because the factors may have changed. In reality, that is all that the noble Lord, Lord Hooson, is asking for, a detailed review of the previous government's report. The noble Lord suggested bringing it up to date.

It is not my duty to decide on the feasibility of tidal power and, in particular, of the Severn barrage. However, any proposed project that could provide 6 per cent of the UK's power requirements must be studied by the Government, and very carefully.

8.40 p.m.

Lord Sainsbury of Turville

My Lords, I am grateful to the noble Lord for securing this debate. The subject is very important, and we need to be clear about the issues involved. I also want to say to the noble Earl. Lord Attlee, that the DTI is clearly responsible for all energy policy, which is why I am responsible for answering the debate.

Renewable energy is now at the heart of the Government's energy policy. In the White Paper., Our Energy Future—Creating a Low Carbon Economy, the Government confirmed our target of 10 per cent of UK electricity being supplied from renewable sources by 2010, and set the aspiration to double that share to 20 per cent by 2020. The main vehicle for reaching that target is the renewables obligation, under which electricity suppliers are required to supply a specified and growing proportion of their sales from eligible renewable energy sources. In addition to the support provided through the obligation, the Government have committed nearly £350 million over the next four years in capital grants and R&D for emerging technologies, including wave and tidal-stream energy.

The 10 per cent target is ambitious as we are starting from a low base. In 2002, only 1.7 per cent of the UK's electricity was generated from renewable sources eligible for the renewables obligation. The noble Lord. Lord Hooson, asked whether we had any chance of reaching the 10 per cent target. In fact, we are making encouraging progress towards meeting it. A further 2 per cent should be supplied by the wind farms which have already obtained the necessary consents. More are coming through the process. The new wind farms announced last month for the second offshore licensing round, if all built, will produce a further 5.4 to 7.2 gigawatts, which is about 5 per cent of the total electricity generated. That should put us firmly on the path to meet that challenging target.

In the short term, most of the expansion in renewables will be from new wind farms, both offshore and onshore. But wind energy is only one of the forms of renewables that the Government are supporting. We are also working hard to expand and bring forward wave and tidal-stream technologies. Although those technologies are prospects for the longer term, they have huge potential to supply a significant proportion of the country's future energy needs and in turn make a significant contribution to our emissions reduction targets. I very much welcome the fact that the noble Lord, Lord Hooson, pointed out that they can make a substantial contribution in future.

The UK is blessed with one of the best marine resources available anywhere in the world. Our immense wave-power resource is alone estimated to be at least 120 gigawatts, which is enough to meet peak electricity demand twice over. In recognition of that potential, the Government have put in place a framework of support to help industry to develop the technologies.

Since the Government introduced a wave-energy programme in 1999, great strides have been made in the development of marine systems. We have already seen the deployment of two full-scale tidal-stream prototypes at sites in Lynmouth, Devon and the Shetlands, and we expect in the near future to see the testing of a full-scale wave-energy device at the UK's marine energy test centre in Orkney. The centre is a further example of the support provided by the Government in the marine renewable area, and will be invaluable in the commercialisation of marine energy devices.

I should say that the DTI is already supporting the project at Lynmouth through our new and renewable energy programme. It is also funding the Pelamis wave device. A full-scale prototype device is to be tested at the European Marine Energy Centre in Orkney later this year. We already recognise the potential, and seek to drive the agenda forward.

The level of support already committed to research and development in wave and tidal energy is in excess of £15 million and we are determined to ensure that that early progress is sustained. This has helped the UK become clear world leaders in this field and we intend that this position is maintained. The Energy Bill which is progressing through your Lordships' House at present will put in place a legal framework to facilitate wave and tidal projects beyond territorial waters when these technologies are ready to move into commercial development.

I turn now to the question of the Severn barrage which is part of the overall programme. In the energy White Paper, the Government recognise the longer term potential of large scale barrage schemes. But such schemes have a substantial impact on the local and regional environment and are very expensive. We concluded that it was clear that the plans for a Severn barrage would raise strong environmental concerns and would not be fruitful to pursue at this stage. There are, therefore, no plans to set up any further study of the feasibility and costs of a Severn barrage scheme.

I recognise that that is disappointing to many noble Lords, in particular but not exclusively to those who see the barrage as a great opportunity for Wales and the south west. On the face of it, the Severn barrage has the attraction of having the potential to contribute between 5 and 6 per cent of the UK's electricity and, therefore, to achieve around a quarter of the Government's 20 per cent aspiration for renewables, much more than any other single renewable project.

But extensive research, partly funded by the Government, has already evaluated the potential for generating electricity from tidal barrages. The Severn was the largest of the potential projects studied and the total cost of the Severn evaluation programme was over £8 million of which the Government contributed £4.8 million. This programme ran from 1978 to its completion in 1994. That evaluation concluded that the cost of the Severn barrage was not attractive compared with other energy options. Potential non-energy benefits were seen as relatively small as was the potential for reducing the costs.

The case for a Severn barrage has been re-examined fairly recently and the Government have reached the same conclusion: that the project is not attractive compared with other options. In July 2001 the Government commissioned the Severn Tidal Power Group, an industry grouping that co-sponsored the earlier programme, to undertake a short study of the project in order to establish whether developments since 1994 justified a more substantial review of the project. We published its report in January of last year. The Severn Tidal Power Group report concluded that reappraisal of the Severn barrage was justified because of an increased emphasis on renewables generation and creation of a market for greenhouse gas savings; secondly, the introduction of NETA has changed the electricity market favourably to the barrage through its ability to predict output and meet fluctuating demand and provide for peak lopping capability; thirdly, positive environmental impacts in addition to CO, avoidance, for example, in mitigation of coastal erosion and flooding risk and avoidance of flood damage costs; and, finally, significant reductions in costs of capital through emergence of project finance as a route for funding major infrastructure projects in other words, public private partnership arrangements.

However, the report acknowledged that the project could potentially demonstrate a surplus of benefits over costs only if the positive externalities are taken into account. In addition, further evaluation to provide a better cost benefit analysis and substantial further work including a full environmental impact assessment were needed before a final decision could be taken.

The Government considered these conclusions carefully in the preparation of the energy White Paper but do not share them. In broad terms, there are three factors to consider: security of supply, costs and environmental impacts. A Severn barrage could have advantages on security of supply grounds since its output is predictable. However, such an advantage would come at a very high cost. The Severn barrage would be one of the most expensive forms of renewable generation and could not be considered economic even with the benefits of the renewable obligation. While other forms of renewables are likely to come down in price as the technologies mature, there is little or no such prospects for the Severn barrage as it is based on established technology.

The development costs are also considerable. The STPG report estimates the cost of the scheme at between £IO billion and £14 billion at 2001 prices and the time from pre-construction activities to full power generation to take some 12 to 14 years. These are significant figures by any stretch of the imagination.

The noble Lord, Lord Hooson, rightly suggested that a public/private partnership-type arrangement could be used. But that does not reduce the cost side of the equation and it would require the Government to guarantee the project's future income stream for at least 40 years. From cost estimates in the STPG report, it remains clear therefore that the project will not proceed on a fully commercial basis in the private sector.

The Severn Tidal Power Group report also takes into account the non-energy benefits of a barrage in dividing its costings, but does not take account of all the other costs or potential socio-economic impacts. While a value is put on flood-avoidance, for example, no cost is given for the negative impact for the Port of Bristol where increases in the size of shipping using the Bristol Channel and the Severn estuary could have a significant impact on the scheme. Any restriction on the operation of ports such as Bristol could have severe commercial consequences.

In addition, completion of the second Severn road crossing has reduced the potential benefits of a road crossing across the barrage. The question of a railway across the barrage is an interesting idea but, I fear, one that would raise a number of wider issues and be likely to add to cost.

Finally, we must consider the environmental impact of a barrage. These were points that the noble Lord, Lord Livsey, drew to our attention so I shall not repeat them. Most of the Severn estuary is internationally recognised as a special protection area for birds and is a proposed special area of conservation. With the loss of around 65 per cent of the intertidal areas, a barrage is likely to have a significant effect on the eco-systems of the Severn estuary for which these designations have been made. In these circumstances, we would be required under our international obligations to recreate intertidal habitats in order to compensate for that loss to the scheme in its construction operation.

In the light of these factors, the Government, in the Energy White Paper, took the view that it would not be fruitful to pursue such plans for the Severn barrage at this stage. Shortly after the publication of the White Paper last year, the Science and Technology Select Committee published the findings of its inquiry that looked at UK investment in research and development in the field of low and non-common forms of energy. The committee in its report agreed with the Government's conclusions on the Severn project set out in the White Paper and went further, stating: We are not in a position to form a judgment on this project. except to say that there is plenty of scope for installing renewable energy generation with little or no environmental impact and these should be given priority". The answer to the question posed by the noble Lord, Lord Livsey, is no, we should at this point concentrate on other tidal opportunities, which are substantial though slightly more long-term than wind energy.

I have answered the main points raised by the noble Lord, Lord Hooson, but I want to deal with four specific questions which he raised. One was the total amount paid out in subsidies for wind generation. In addition to the assistance provided by the renewable obligation, the Government have committed £117 million in capital grants to round one off-shore wind development. This report is for first generation demonstration projects, which are presently economically marginal. However, we expect that the experience gained from these early developments will in time lead to improved economics for the technology. This is hard-won money from the UK Treasury, not European money. In these circumstances, we make such decisions most carefully.

The noble Lord, Lord Hooson, also asked whether the Government are satisfied with the reliability and viability of wind power with regard to costs. We recognise that wind energy is intermittent, but analysis carried out as part of the White Paper process shows that the electricity system could cope with an increasing reliance on renewable energy. But of course as the proportion of intermittent generation increases, the cost of maintaining stable supplies also increases.

The noble Lord, Lord Hooson, asked whether the Government accept that tidal power is a more predictable and powerful source of electricity generation than wind. We accept that tidal power is more predictable than wind, but in the case of harnessing it through the Severn barrage, it is a considerably more expensive form at this stage of electricity generation.

The Government believe, however, that other forms of tidal power generation have the potential to contribute to our renewable energy targets, which is why since 1998 we have committed more than £50 million to research and development on wave and tidal energy devices.

The noble Lord, Lord Hooson, finally asked whether the Government accept that turbine technology and heavy engineering methods have moved on since 1989 and that the expertise needed to take full advantage is readily available in this country. The technology required for the Severn barrage is mature technology and therefore has the disadvantage that it has limited scope to reduce costs, whereas there is huge capability to reduce the cost of offshore wind generation, which we think will follow the pattern of onshore wind.

Finally, in response to the noble Baroness, Lady Miller of Chilthorne Domer, we are aware of Tidal Electric Limited, which has proposed several tidal impoundment projects at Swansea Bay and Rhyl. As the noble Baroness pointed out, Tidal Electric claims that it can build a tidal power scheme using proven and commercially available technology that can generate electricity for about 2.5p to 3p per kilowatt hour, which is well within the scope of the technologies supported by the renewables obligation.

The DTI has assessed its claims using an independent consultant with a background in the technology. We think that those estimates are extremely optimistic and that electricity costs are likely to be much higher—possibly by a factor of four, which puts the scheme at the top end of the range. Of course, if Tidal Electric's assumptions are correct, it has plenty of scope to convince investors of its case and could attract commercial funds.

Having said all that, the Government have not written off the Severn barrage or schemes of that type for all time. If circumstances change, we will reconsider the project, but now is not the right moment to do so. I hope that I have shown that although the Government are committed to our renewables target, we do not consider that the Severn barrage would be cost-effective compared with other forms of renewable generation.

As I mentioned, we are none the less pursuing the potential of harnessing tidal energy through research and development. The Government want to secure the potential benefits of tidal power as renewable energy and the industrial and economic benefits of a successful renewables industry. We must seek to do so within the framework of the White Paper on energy and our objectives on cost, energy security and environmental impact.

House adjourned at two minutes before nine o'clock.