FUTURE OFFSHORE Update on the Consultation Nigel Peace Licensing & Consents Unit 27 March 2003

ENERGY GROUP Purpose of talk Highlight main issues arising from the consultation Indicate how they will be taken forward In particular, report progress on SEA

ENERGY GROUP 107 responses received Developers, including trade associations – 23 Marine users – 12 Environmental, heritage & countryside organisations – 26 Local authorities, regional organisations – 16 Electricity companies, regulatory bodies – 10 Others, including academics & legal firms - 20

ENERGY GROUP New legislation – consultation views Strong support for early legislation to enable developments to take place outside territorial waters Environmental groups would prefer legislation to be part of a comprehensive and integrated framework for the marine environment White Paper confirms that legislation will be brought forward as soon as possible

ENERGY GROUP Items expected to be covered in new legislation Setting up a “Renewable Energy Zone” beyond territorial waters for renewable energy projects; Giving responsibility to the Crown Estate for the issue of sea bed licences in the Zone; Extending the legal framework in territorial waters to the Zone eg section 36 Electricity Act consents; Providing a statutory regime for safety zones; possibly extinguishing rights to navigation in the Electricity Act.

ENERGY GROUP The allocation of rights in Round 2 & future rounds – consultation views General support for the tender assessment process outlined in Future Offshore. Developers concerned about the proposal to offer leases in fixed, geographically defined regions, following SEA. Others – eg environmental groups, NGC – support this proposal. Miscellaneous points made on the proposed boundaries of the 3 strategic regions.

ENERGY GROUP The allocation of rights – consultation views (continued) No clear view on the frequency of rounds: environmental groups tend towards a three year cycle whilst developers favour greater frequency General agreement that leases should specify timetables for implementation of projects No consensus on whether other renewable technologies should be covered within the same planning framework.

ENERGY GROUP How will next rounds proceed? Round Two will be based on the three strategic areas (subject to small extension of Greater Wash boundaries) Design of the Round will be agreed between Crown Estate and DTI, taking into account – Responses to consultation – Registrations of interest – SEA Environmental Report

ENERGY GROUP How will next rounds proceed? (continued) Once Round Two under way, DTI & Crown Estate will discuss with BWEA, SEA Steering Group, etc – Taking forward SEA process – Timing and geographical areas of subsequent rounds

ENERGY GROUP SEA – views of environmental groups Concerns that the process is being implemented too quickly Widely held view that a national scale SEA is needed to inform decisions on the best strategic areas for development Only a few calls for a moratorium on further development, but wide support for a precautionary approach to sites where data is unavailable and impact uncertain Analysis of cumulative impact seen as crucial

ENERGY GROUP SEA – views of wind industry Value of SEA process recognised Do not want the timetable to slip Believe rigid application of precautionary principle would be counterproductive Concern that positive environmental benefits of wind energy may not be adequately recognised

ENERGY GROUP SEA – Timetable Environmental Report will be published in draft at the end of April. Four week public consultation during May. Report will be finalised at end of May in order to inform Round 2 which will follow in June. Progress can be monitored on

ENERGY GROUP Responsibility for offshore cables 1. Offshore developers remain responsible for offshore connections to onshore, as now. 2. Extend responsibilities of onshore network operators to offshore, but maintain existing charging arrangements. Offshore developers would then have choice of providing connections themselves or receiving regulated cost-reflective connections. 3. As 2, but adjust the regulatory charging regime so that network operators could recover costs from other customers. Consultation clarified that there are three options:

ENERGY GROUP Responsibility for offshore cables (continued) No consensus of views on the best way forward Similarly no consensus on whether a new regulatory regime is needed for third party access. A few respondents call for a co-ordinating strategy for offshore network infrastructure Clear that this is a key issue for the future

ENERGY GROUP Conclusions Consultation response generally supports the proposed way ahead although much comment on detail Summary of responses, and Department’s conclusions, will be published in the summer SEA process is well under way Round Two is in active preparation Legislation will be introduced as soon as Parliamentary time allows Key issues for longer term include taking forward the SEA process; the design of future rounds; and responsibility for offshore cables.