Q70 Mr. Dave Anderson: Could I ask you to be a bit more specific on what you mean by reinforcements on a practical level. Is it more pylons? Is it more underground cables?

Mr Barlow: In the case of the North of Scotland, if I could start there, in the background to the studies we have made a working assumption that the Beauly-Denny project would be in place as part of the plans that we have for that. That is a significant rebuild of an existing line. Thereafter, however, maximising the routes and the assets that we have, in the North of Scotland, Beauly-Denny effectively having been rebuilt unlocks the potential to develop the rest of the system without rebuilding on existing routes. It is really a case of doing something less than that, not replacing the towers but replacing the conductors and changing the voltages. In the South of Scotland and the interconnectors to England, there is no rebuilding of circuits but we have been looking at placing some devices on to the system, which are called series compensators, which are more like sub-station devices, rather than changes to lines. Part of the first phase of the reinforcements to 2015 would be a proposal to put a high voltage direct current subsea cable from Deeside, Liverpool, up to the Ayrshire coast around Hunterston, so that would avoid the need to put a third major pylon line in that area. Inevitably, I think, in the East of England the approach has been taken to reinforce circuits that we have, but into the future I think there are, potentially, some lines there which may be required, depending on the outcome of the offshore developments around Dogger Bank.

Q71 Mr. Dave Anderson: The estimated cost that we read in our brief is £4.7 billion. That sounds low to me. Would you like to comment on that?

Mr Barlow: The project looks at the reinforcements on the mainland system. Included in that £4.7 billion are the costs of these two potential HV DC subsea cables, one on the east coast, as I have described, going from Deeside to Hunterston, and one which would be a second potentially required by 2020, which would go to the east coast, perhaps from the Newcastle area to Peterhead, thus reinforcing the Scotland to England system. What it excludes, then, are some of the costs for the offshore links. It does not include the links of the offshore wind farms to that main interconnecting land-based system. That is our cost estimate of it at this point.

Q72 Mr. Dave Anderson: Given the fact that a lot of these things might or might not happen - you know, how much offshore will we go for, who will do it, who will invest? - how confident are you that the strategy that you are putting forward will succeed?

Mr Barlow: I think that is the ----

Q73 Mr. Dave Anderson: £4.7 billion question?

Mr Barlow: Well clearly there is uncertainty, and we have tried to address that uncertainty by two things. One is the phasing of these reinforcements. We are relatively certain that we need to go ahead with the first phase by 2015, and then we recognise that there is a second phase to follow, should generation appear in places we anticipate and to the volumes. The second part of that is the fact that we are progressing with the preconstruction works for most of the first phase. The preconstruction works is work that we can get on with now, without making a firm commitment to construct. Therefore, as we do this pre-construction work, effectively in parallel with the generators themselves being developed and materialised, then we can move in to a construction period on individual projects as the next stage, perhaps in two or three years' time.

Mr Steele: I really do wonder whether this uncertainty issue is not a bigger problem for the immediately identified upgrades as some people have suggested. We know what the locations for nuclear stations will be. The Government has very kindly published a list. We know where the wind is blowing: mainly in Scotland. We know that there is currently significantly less capacity to get power out of Scotland than is needed, and that substantial upgrades are needed as a matter of urgency to it. The history of this has been of the funding being provided about five to ten years too late to have stuff available on time, bearing in mind how long the planning takes. I think the people who have worked on this group have come up with a really excellent phased plan, and our plea is: "Let's just get on with it."

Ms Kay: They are strategic investments and, I think, unlike anything that the three transmission owners have done in the past. They are dependent on clusters of generation coming forward. None of the strategic investment identified by ENSG is dependent on an individual generation project coming forward. It has some more certainty built in it, in that you are relying on a cluster, and if one falls out the work that ENSG did is not sensitive to just one falling by the wayside.

Chairman: That is helpful.

Q74 Colin Challen: From what I have heard so far, it seems to me at least that there will be a kind of inbuilt bias towards reinforcing the existing structure, partly because of predictability of where nuclear, if it happens, will go, and the unpredictability of renewables. Yes, it is true that we know there is a lot of wind in Scotland, but the Severn Barrage, for example, still has a very uncertain future. Taking the point that over-investment is not a very wise thing to do: that all points in one direction, which is away from us meeting the generation of 35 per cent of our electricity to meet the 2020 European Directive package. Is there an inbuilt bias? I am not saying it is a conscious function; it is just simply trying to change the course of this huge tanker.

Mr Steele: There has been historically a degree of caution about putting in this infrastructure against the possibility that it might not be needed, and that caution has led to the certainty that there is not enough of it. I am hugely encouraged by the ENSG report, in that I think everybody got together and produced a plan that will lead to a level of infrastructure that will make hitting these targets at least a possibility as far as the infrastructure is concerned.

Q75 Mr. Dave Anderson: How strong a possibility? It does not sound very encouraging.

Mr Barlow: From the work that we have done, the positive side of it now, I think, is that there is a move towards getting on with it without necessarily making a firm commitment to go to construction at this point. The preconstruction work that we are now working on across the first phase of these projects puts us in a good position. It is work that we have to do anyway: we need to do it whether we are committed to construct or not, but it does give us that ability to make sure that it is the right investment to be taking. I think that is where we are and that is exactly what we should be doing at this point in time. Of course, we do have to develop the system in parallel with the generation coming along. We could fall foul of investing too late, which I think is where we have been, and we could fall foul of investing too early and the risks of stranding some assets. I think that the approach we are taking is a good approach, given the circumstances of generation. We are doing our part, really, in bringing the grid developments forward, in parallel, hopefully, with the generation coming forward at the same pace.

Ms Kay: From a network perspective, the work that ENSG has done and has shown to be needed to meet a plausible scenario of meeting the 2020 targets, is entirely doable on behalf of the networks. The key thing, as Mike has just said, is the certainty of ensuring that generators and developers are going to come through to be on the end of those lines.

This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee. Neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings.

The full transcript may be read here.

Promoted by Paul Foy on behalf of Dave Anderson, both of St Cuthbert's Church Hall, Shibdon Road, Blaydon, NE21 5PT