Schedule 16 - Applications and proposals for notices under section 96
Energy Bill [Lords]
3:00 pm
Dr Alan Whitehead (Southampton, Test, Labour)
The amendments are modest and helpful. They concern the process by which a person or a body wishing to install an offshore installation goes about doing so. Schedule 16 sets out the process by which the inquiry takes place if there are objections to the installation or to the safety zone; clauses 94 to 96 also apply in this regard.
When an individual or an organisation seeks to place an installation in an offshore site, as set out in clause 94, they must first obtain approval by means of a section 36 application of the Electricity Act 1989. When they seek to do so, they will consider several things, the first being whether an element of the application is covered by a local authority area which, in the case of most offshore applications it will not be. They will therefore consider that in terms of a potential inquiry into their application, it will lie within the purview of the Minister and the mechanisms set out in the previous clauses.
Secondly, they will consider whether a safety zone around the installation is likely to be required. In most circumstances, bearing in mind our debates, a safety zone probably would be required, but not necessarily in all circumstances. However, a person or organisation wanting to produce or invest in an installation would want a clear line of approach in terms of the decision-making process of the proposal for such an installation. They would want to know whether there was a safety zone and, if so, whether it was likely to be a matter of controversy and whether it would be the subject of the inquiry. They would also want to know whether the application itself was likely to be the subject of an inquiry. The fact that it would be the subject of an inquiry would not necessarily deter an investor wanting to set up an offshore installation. It is the certainty of the process that is important. My amendment would put certainty into the process, because as schedule 16 suggests, there could be a situation in which an individual or a company wished to put an installation into an offshore site and, because a local authority did not cover that site, the Minister
required an inquiry to be held. When that inquiry was being held the investor in the installation might be concerned about the safety zone. That may be a matter for separate side letters; there may be discussions and informal inquiries about whether there should be a safety zone and, if so, what it will consist of.
All of that occurs while the installation is not being built because if a section 36 application succeeds and it is built, the subsequent question of the safety zone means that the safety zone has to fit around the installation that is built; it cannot require that the installation has to be removed. While that installation is not built and it is on paper, there is a question about the certainty of investment; the investor will wish to know about the safety zone and how the process by which it will be determined is carried out.
As section 16 currently stands, it appears that the Minister can discuss via other devices such as side letters and other processes the definition and extent of a safety zone and that, suddenly, at the end of the process—within perhaps three days of the investor considering that it has come to an end and they can therefore start work on their installation—the Minister may decide that there should be an inquiry after all. The process will then be set back and put into a state of uncertainty again because nothing has been placed on the sea bed for a long period. I am certain that our Minister would not do that, but that is not the point. The point is that the perception of those who are considering investing in the process is that this is a hurdle that they might have to overcome. That creates uncertainty.
The amendment addresses that problem. It is proper to consider whether to have inquiries at each stage, but it should be made clear at the beginning of the process if there is to be an inquiry. If there is not to be an inquiry and the process is to proceed by other means, that should also be made clear. The amendment does not in any way abridge the rights of people or organisations—or, indeed, interested non-governmental organisations—to make objections, or the rights of the Minister to consider what is the best way to proceed. It simply suggests that the Minister ought to make that process clear as the process of application takes place, so that when the application is finally determined with regard to installation and the safety zone, it is safe to proceed; certainty is thereby secured.
I hope that the Minister will support the amendment or give me assurances about how the outcome can be secured in terms of the process by which installations are decided and become reality.