Deadline X Response to the ExA's Rule 17 Letter (29 ...... · 2.1.1. Both Dogger Bank Project 2...

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


F-EXL-DX-004_1 © 2015 Forewind

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.



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



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



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.



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.



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



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



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.



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:



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. .



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.

Deadline X Response to the ExA's Rule 17 Letter (29 ...... · 2.1.1. Both Dogger Bank Project 2...

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