February 2015 Deadline X Response to the ExA's Rule 17 Letter (29 January 2015)
February 2015
Deadline X Response to the ExA's Rule 17 Letter (29 January 2015)
DOGGER BANK TEESSIDE A & B
F-EXL-DX-004_1 © 2015 Forewind Page ii
Document Title Dogger Bank Teesside A & B
Deadline X
Response to the ExA's Rule 17 Letter (29 January 2015)
Forewind Document Reference F-EXL-DX-004
Issue Number 1
Date February 2015
Drafted by R Sherwood
Approved by M Read
Date / initials approval MR 02-Feb-2015
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1. R17-28
With reference to the Northern Powergrid (North East) Ltd submission at Deadline IX [REP-531], please advise whether you are satisfied that a proper and effective side agreement has been concluded.
1.1.1. The response to this question has been incorporated in the answer provided
below for ExQ R17-29.
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2. R17-29
Please identify the subject matter(s) of the concluded side agreement.
With reference to the draft Development Consent Order submitted at Deadline IX
(the DCO) and to any other relevant documentation, please highlight the particular
provisions within the DCO that are the subject of or implement the concluded side
agreement.
2.1.1. Both Dogger Bank Project 2 Bizco Limited and Dogger Bank Project 3 Bizco
Limited (“DPL”) and Northern Powergrid ( Northeast ) Limited (“NP”) has
entered into an Agreement dated 22 January 2015 which has enabled to
withdraw its representations against the Application.
2.1.2. The Agreement addresses a number of detailed points raised by NP regarding
the terms of the protective provisions set out in Part 1 of Schedule 8 to the
Order. These points relate to-
1) The manner in which works to NP’s apparatus might be undertaken by
(“DPL”) under paragraph 5 of Part 1 to Schedule 8 to the Order;
2) The notice periods to be applied to the production of plans under paragraph
7(1) of Part 1 of Schedule 8 to the Order where apparatus in the vicinity of Order
works is not required to be relocated;
3) The process by which costs recoverable by NP under the Protective
Provisions may be recovered from DPL; and
4) Provisions for dealing with disputes, confidentiality, assignment and the
provision for service of any notices required to be served under the Agreement.
2.1.3. None of the points agreed require any modification to the protective provisions
contained in Part 1 of Schedule 8 to the Order or any other provision of the
Order as under clause 3 of the Agreement, the Protective Provisions are
deemed to take effect subject to the adjustments agreed between the parties.
2.1.4. Accordingly none of the provisions of the DCO are the subject of, or implement
the concluded Agreement and the Applicant is satisfied that a proper
and effective side agreement has been concluded between the parties. The
representations submitted by NP against the Application were withdrawn
following the completion of the Agreement and the Applicant does not consider
that any further steps are necessary to address the matters raised by NP in its
representation
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3. R17-31
Specifically, the Panel is asking whether it should consider recommending that the
proposed cable alignment affecting SABIC is excised from the DCO by the Secretary
of State. Comments provided on this approach should address all factors that the
relevant interested party considers to be relevant.
3.1.1. Forewind believe that the draft protective provisions proposed in Part 6,
Schedule 8 of the Deadline IX Draft Development Consent Order (version 7)
provide proportionate, robust and enforceable mechanisms for addressing the
legitimate concerns about the effect of the project on operations at Wilton.
3.1.2. It is understood that SABIC's position is that the provisions of the DCO, as they
propose to amend them (reflected in their Deadline IX Submission), would also
provide adequate protection of their interests.
3.1.3. Sembcorp has a broader objection in principle to the DCO but Forewind
understand that they agree that the provisions of the DCO, amended as
proposed by SABIC, would provide adequate protection of their interests.
3.1.4. Accordingly all three parties agree that protective provisions can address the
effect of the project on operations at Wilton. The single issue between the
parties is where the proper balance should be drawn between, on the one hand,
the national benefits of the project, and the delivery/funding requirements, and
on the other hand the potential for the delivery of the project to have adverse
impacts on operations at Wilton. Effectively all parties accept the Panel’s
"approach 3" outlined in Question ExQ R17-31. Forewind go further and believe
that "approach 2" is correct, and that SABIC's proposed provisions are not
justified and should be rejected. The question is therefore only about the
appropriate balancing point rather than any principle about whether protective
provisions provide a workable solution.
3.1.5. Forewind's position on the issues outstanding between Forewind and the Wilton
Parties is set out in the Statement of Reservations (F-EXL-DX-002-Appendix 1)
submitted to Deadline X. As can be seen Forewind has real concerns about the
extent of control that the Wilton parties wish to exercise, and the adverse impact
that could have on the delivery programme and on the attitude of future
operators and funders to the project. It would be ceding to private interests a
significant level of control over the programme for, and delivery of, the project.
3.1.6. Forewind note, in particular, that the balance is between the ability to deliver a
nationally important infrastructure project and the potential risk of adverse
impacts to the operations of the Wilton parties. Forewind emphasise the
potential nature of these risks, since it is firmly believed that the Wilton protective
provisions as submitted provide a strong framework, similar to that offered to
statutory undertakers, that more than adequately protects the relevant interests.
3.1.7. Given the approach of all parties we do not think that there is any justification for
excising from the DCO the cable alignment in so far as it affects the SABIC
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interests. The Panel will have noted that in relation to the plots in the access
road in which SABIC have an interest, that interest is already subject to the
ability of Sembcorp to carry out works and effect closures in accordance with
their normal procedures. In relation to plots in which SABIC has an easement or
right to install and maintain apparatus its rights are, again, not exclusive and
others can install apparatus in the same corridor. As originally noted and
accepted at the hearings the protective provisions in the DCO largely seek to
replicate, as far as possible for a nationally important project, the existing
arrangements at Wilton for managing impacts.
3.1.8. In conclusion
There is no justification for the excision of the SABIC plots/interests from the
powers relating to compulsory acquisition in the DCO1;
Both Forewind and the Wilton Parties accept that protective provisions can be
settled that would be workable. Accordingly, Forewind have not addressed the
procedural implications of the excision of the cable route; and
There is a balance to be drawn between the national public interest in the
project and the private interests and public interests in the operations at Wilton.
Forewind believe that the proposed provisions, as set out in the Draft DCO
(version 7), strike the right balance.
1 Note that Forewind have assumed that the Panel's reference to excision in the question relates only to the removal of
the relevant plots from being subject to compulsory powers, rather than being a suggestion that it would also excise the
permission to construct/operate.
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4. R17-32
In paragraph 4.10 of the Deadline VIII – ‘Compulsory Acquisition Hearing Summary 13 Jan 2015_FINAL’ [REP-466] you stated ‘public interest for the projects outweighs the private interests’.
Is there a public interest in the safe and beneficial operation of the SABIC cracker that should also be taken into account?
4.1.1. As documented in Statement of Reservations (F-EXL-DX-002-Appendix 1) also
submitted at Deadline X, Forewind accept that there are important private
interests that will be affected by the project and the proposed exercise of the
powers in the DCO. Forewind also accept that the continuing safe operation of
businesses both generally and specifically at Wilton, including as an example
the SABIC Cracker, is also in the public interest.
4.1.2. For the reasons documented in response to R17-31 and the Statement of
Reservations, Forewind accept that the interests of those operating need to be
respected as far as possible, and believe that the proposed Wilton
Requirements do so. However, Forewind consider this protection must strike the
appropriate balance between the national public interest of Dogger Bank
Teesside A & B and the private and public interests in the operations at Wilton.
4.1.3. Forewind has engineering confidence that the works proposed in the vicinity of
SABIC’s interests within the Wilton Complex (i.e. Cracker and associated
infrastructure) can be undertaken in accordance with requirements provided by
SABIC2. Forewind is of the view that the issue before the panel is not an “either
/ or” scenario, but one limited to concluding the appropriate level of protection of
the private interests secured in the Order.
4.1.4. If the examining authority is minded to weigh SABIC’s interests against Dogger
Bank Teesside A&B, Forewind is of the view that, Forewind has a strong and
robust public interest case as demonstrated in more detail below.
In ExQ R17-30 the Panel has asked SABIC to provide evidence of the daily cost /
loss if the Cracker were taken offline as a consequence of the project. It may be that
the Panel will need to balance the potential benefits of the project against this [S104
(7) PA 2008]. Drawing from the application documents, existing written
representations and where necessary elsewhere, please provide a signposted
summary of evidence of the social, economic and environmental benefits of this
project (for example average daily revenue generated and employment during
construction and operation) capable of being used comparatively with the analysis
of costs / losses to be provided by SABIC. As with ExQ R17-30, these should be
pecuniary and non-pecuniary, quantitative and qualitative.
2 Appendix A of Deadline VI, Action 1.8, 1.11, 1.12 and 2.2 (Works within Wilton Complex) (Document reference F-EXL-DVI-002
Appendix 3), Permanent Instruction CCPL 04.40 Standard Conditions for Work in Close Proximity to Pipelines.
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Please explain which factors have been included in the calculation of project benefits.
4.1.5. The public interest benefits of Dogger Bank Teesside A & B are well
documented in the application documentation and in subsequent documents
tabled through the examination.
Application Documentation
4.1.6. Paragraph 4.3.1 – 4.3.6 of the Planning and Design Statement (application ref
8.1):
Cites National Policy Statement EN-1 and the requirement for a significant
change in the UK’s energy infrastructure in the near future to respond to
the challenges of climate change, future energy security and to maximise
economic opportunities, with an urgent need for new (and particularly low
carbon) energy NSIPs3. Offshore wind is expected to provide the largest
single contribution towards the 2020 renewable energy generation targets4.
Dogger Bank Teesside A & B, with a proposed installed capacity of up to
2.4GW, have an expected annual electricity generation of approximately
8,410,000,000kWh (kilowatt hours) or 8,410GWh (gigawatt hours), enough
to power approximately 1.8 million homes or all businesses in the North
East.
4.1.7. Environmental Statement (ES) Chapter 2 Project Need (application ref 6.2)
introduces:
the linkages between climate change, the role of renewable energy and
economic threat caused by climate change5;
key drivers for renewable energy in the UK and the Government’s support
for the development of offshore wind power6; and
unique attributes of Dogger Bank Teesside A&B7, including The Dogger
Bank Zone being the largest site available for leasing released by the
Crown Estate for Round 3, with many attributes which make it an attractive
proposition for wind farm development, having a good wind resource with
higher annual mean wind speeds than the other Round 3 zones (>10m/s),
relatively shallow water depths and good ground conditions.
4.1.8. Social and economic impacts of the Dogger Bank Teesside A & B are assessed
in ES Chapter 22 Socio-economics (application ref 6.22) which concludes,
under three different offshore generation capacity growth scenarios:
Full time equivalent jobs predicted for the construction of a single project
between 1,092 and 1,644 full time equivalent (FTE) direct employment and
588 to 984 indirect employment;
3 EN-1 paragraph 3.3.15 and paragraph 3.4.1
4 EN-1 paragraph 3.4.3
5 ES Chapter 2 Project Need (application ref 6.2) Section 1
6 ES Chapter 2 Project Need (application ref 6.2) Section 2 and 3
7 ES Chapter 2 Project Need (application ref 6.2) Section 3.2
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Full time equivalent jobs predicted for the operation of a single project
between 216 and 300 FTE direct employment and 180 to 216 indirect
employment; and
Indicative single project capital expenditure of £3.6billon (£7.2 billion
application total).
4.1.9. ES Chapter 34 Conclusion, following assessment of a comprehensive range of
economic, social and environmental matters concludes the proposed works will
have a non-significant impact.
Examination Documentation
4.1.10. Forewind’s Written Representation submitted into the examination at Deadline III
reaffirms support for and need for offshore renewable energy projects cited in
the Planning and Design Statement (application ref 8.1) and Chapter 2 Project
Need (application ref 6.2). Forewind’s Written Representation also introduced
into the examination the Dogger Bank Economic Benefits Study (Headline
Report) – a bespoke and industry leading assessment of the potential economic
benefits from the development of offshore wind farm projects in the Dogger
Bank Zone in the North Sea.
4.1.11. The Economic Benefits study (Headline Report), framed around three scenarios,
concluded:
With its current industrial base, the UK could provide up to 38 per cent of
the total content of the Dogger Bank projects, and for the mid scenario of
four wind farms, this equates to an investment of close to £7 billion.
However, if new relevant manufacturing facilities are established here, UK
based companies could secure up to 72 per cent of the content, which
equates to an investment of around £13 billion in the four-project scenario.
Delivering the four Dogger Bank projects currently in the planning process
(i.e. Dogger Bank Creyke Beck and Dogger Bank Teesside A & B) could
create more than 4500 new direct and indirect jobs and generate an
additional £1.6 billion for the UK economy (GVA). With the successful
establishment of new manufacturing facilities, however, the UK could see
around 9000 new jobs created giving a £3.4 billion boost to the national
economy (GVA).
Combined, Dogger Bank Creyke Beck and Dogger Bank Teesside A & B
could realise benefits for the North East and Yorkshire and Humber regions
equal to an investment of up to £5.5 billion in the four-project scenario,
increasing to up to 61 per cent (worth £9.3 billion) with additional relevant
manufacturing facilities established in the area, create more than 4000 new
regional jobs generating an additional £1.3 billion for the North East and
Yorkshire & the Humber economies and with the successful establishment
of new manufacturing facilities, around 7000 new regional jobs could be
created generating an additional £2.2 billion for the regional economy. The
study also noting that while the highest number of new jobs will be in the
manufacturing, construction and installation phases of the Dogger Bank
projects, the jobs in the operation maintenance phase will be longer term
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and individually generate a higher return to the UK economy. In effect
these represent jobs for generations.
Average Daily Revenue Generated
4.1.12. In determining how the protective provisions are weighted towards either
SABIC’s interests or Forewind’s, in response to Question 6.12 of Examining
Authority's First Written Questions, submitted at Deadline III, Forewind
considered the cost of an offshore cable damaged in a single incident. That
response (albeit offshore focused) notes:
Forewind has estimated the costs of a single operational cable repair, due
to lost revenue and works costs, would be in the region of £112m to
£175m.
During full operation, wind farm revenue would typically be expected to be
on average around £1.5m per day. For both projects, full operation wind
farm revenue would therefore typically be expected to be around £3m per
day.
An export cable fault reduces revenue to zero.
An export cable fault, offshore, would typically take approximately 10 to 16
weeks to repair and return to operation.
4.1.13. Forewind recognises that the onshore environment is not as complex or as
challenging as the offshore environment. Whilst the daily lost revenue of
£1.5million (single project), £3million (two projects) a day remains consistent,
the period and cost to repair and return to operation onshore would be shorter.
Solely for the purposes of this exercise it could be assumed that onshore repair
and return would be 80% of the offshore costs stated in response to Question
6.12. A preliminary estimate therefore of the costs of a single operational
onshore cable repair, due to lost revenue and works costs, would be in the
region of £22m to £35m per project or £44m to £70m for two projects.
4.1.14. Forewind’s response to Question 6.12 also notes:
Aside from the economic costs to the operators of both projects there
would be a risk of impact upon the UK transmission network with the loss
of more than 2GW of generation in a short period potentially breaching the
UK’s System Quality and Security of Supply (SQSS) standard.
The separation distance of the HVDC cables between the two projects, and
the individual project cables should the pair be installed unbundled, will be
developed as part of an overall cable protection strategy. Other elements
will include cable burial and the installation of cable remedial protection
measures as discussed in Section 3.9 (Offshore Cable Installation and
Removal) and Section 5.10 (Remedial Cable Protection) of Chapter 5 of
the ES (ref 6.5). All these elements would be considered during the
respective detailed design phases of the individual Dogger Bank Teesside
A & B projects in consultation with the relevant stakeholders.
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Employment Generation
4.1.15. Due to the number of variables it is not possible to estimate the number of jobs
lost in the event that a cable fails. It is also not possible to determine a scale of
employment loss in the event of operational conflict between the proposed
works for Dogger Bank Teesside A and B and SABIC’s interests. Through the
examination, Forewind has only documented project wide employment rates,
summarised above.
4.1.16. However, in determining the weight afforded to the protective provisions, as a
worst case, the imposition of onerous requirements or third party protection
within a made Order may make investment in both projects less attractive to the
point where a project is not viable and not constructed. Under such a scenario
the capital investment and associated job generation, energy generation and
contribution towards the UK’s legal commitments and European targets of
renewable energy generation (summarised above), would not be realised and
the significant opportunities presented by the application lost.
Policy Compliance
4.1.17. SABIC’s Deadline IX submission makes reference to compliance with National
Policy Statements (“NPS”) and Section 104 of the Planning Act 2008.
4.1.18. Compliance with planning policy and Section 104 of the Planning Act 2008 is
well documented through the application and supporting examination material:
Planning and Design Statement (application reference 4.1): Section 4 of
Planning and Design Statement (application reference 4.1) provides a
policy compliance overview, including National Policy Statements EN-1,
EN-3 and EN-5. Tables A1, A2 and A3 of the statement cross references
NPS policy with relevant section of the application documentation.
Environmental Statement Chapter 6 Site Selection (application reference
6.6): ES Chapter 6 describes the approach taken to identify the preferred
site for Dogger Bank Teesside A & B. The process included consideration
of both the offshore and onshore developments, and associated
infrastructure. Supporting technical assessments pertinent to SABIC
include:
Appendix 6C Onshore Study Area Characterisation Report;
Appendix 6E Onshore Converter Station Sites Identification and
Characterisation;
Appendix 6F Identification of a Preferred Converter Station Site:
Lackenby Connection; and
Appendix 6G Onshore Site Selection Part 3.
Environmental Statement (application reference 6.0): Sections 4.1.5 –
4.1.9 ES Chapter 3 Legislation and Policy also provides a policy
compliance overview, with each ES chapter (typically Section 2.1)
documenting relevant policy compliance. Those most pertinent to matters
of interest to SABIC are addressed in:
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Section 4 and 7 of ES Chapter 26 Land Use and Agriculture
(application ref 6.26) considers Section 5.10.5 of EN-1.
Section 7.6 of Planning and Design Statement (application ref 7.6)
considers on shore human environment and socio economic impacts.
ES Chapter 22 Socio-Economics (application ref 6.22) considers NPS
Assessment Requirements.
Each ES chapter also considers inter-relationships between physical,
environmental and human receptors, with the objective of identifying where
the accumulation of impacts on a single receptor, and the relationship
between those impacts, may give rise to a need for additional mitigation.
As noted above, ES Chapter 34 Conclusion, following assessment of a
comprehensive range of economic, social and environmental matters
concludes the proposed works will have a non-significant impact.
Section 104 of the Planning Act 2008
4.1.19. SABIC’s representation at Deadline IX asserts that the extent of the potential
adverse impacts and the applicant’s proposed protective provisions do not
adequately mitigate the effects of the proposed development, and that
consequently the adverse impacts from the development outweigh its benefits,
contrary to Section 104(7) of the Planning Act 2008.
4.1.20. Under Section 104(7) the Secretary of State would not be able to grant consent
if he considers that the adverse impact of the proposed development would
outweigh its benefits.
4.1.21. For the reasons documented above Forewind has engineering confidence that
the works proposed in the vicinity of SABIC’s interests within the Wilton
Complex (i.e. Cracker and associated infrastructure) can be undertaken in
accordance with requirements provided by SABIC. Where any potential risk
remains, Forewind believe that the proposed Wilton Requirements within the
DCO protect SABIC’s interests. Both in whole or specific to SABIC Forewind is
therefore of the view that there would be no adverse impact of the proposed
development.
4.1.22. If the ExA forms the view that their remains a risk of an adverse impact on
SABIC’s interests, Forewind contends that the overwhelming benefits of the
application substantially outweigh the risk of an adverse impact on SABIC.
These benefits, summarised above and extending to contribution towards the
UK’s legal commitments and European targets of 2.4 GW of renewable energy
generation, capital investment in order of £7.2 billion and 3,000 full time
equivalent direct and indirect construction and operation jobs.
4.1.23. On this basis Forewind concludes that any risk of potential adverse impacts of
the application on SABIC’s interest would not outweigh the very great potential
benefit to be won from the proposed works by Forewind, and concludes that
there is no conflict with national policy and the legislative tests within Section
104(7) of the Planning Act can be satisfied. .
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5. R17-34
Table 3.2 (Statutory Undertaker Negotiation Update) to [REP-469] at part 1: protection for electricity, gas, water and sewerage undertakers (page 14) refers to a ‘[p]re-emption [r]ights and ownership discrepancy between NGET and Sembcorp’ as an outstanding matter.
Please provide a status update on this matter, indicating what has changed since
Deadline VIII and whether there are any outstanding concerns.
5.1.1. In Table 3.2 (Statutory Undertaker Negotiation Update) to [REP-469] Forewind noted that clarification of ownership boundaries and pre-emption rights at the Lackenby sub-station was an outstanding matter. These title matters are the only issues preventing completion of an agreement with NGET.
5.1.2. It should be noted that these issues do not affect the form of the DCO, which the parties believe can be confirmed in relation to the Lackenby sub-station area and boundaries as presented. The proposed side agreements and/or use of DCO powers can be used to ensure that all rights required to deliver the project are available.
5.1.3. Forewind and NGET remain confident that the necessary side agreements will be completed in relation to these issues.
5.1.4. Forewind take this opportunity to confirm that there are no outstanding representations from statutory undertakers other than NGET.
5.1.5. As the NGET submissions have made clear they will have no continuing representations subject to the side agreement being entered into.