Examination of Witnesses (Questions 1
- 19)
WEDNESDAY 14 MARCH 2001
MR CHRISTOPHER
BRONSDON AND
DR IAN
TAYLOR
Chairman
1. Mr Bronsdon, Dr Taylor, welcome to the Science
and Technology Select Committee, and thank you for finding time
this afternoon to be with us, as we start our investigation into
wave and tidal energy. We have only three-quarters of an hour
before we move on to other witnesses; therefore, I am going to
ask the Committee if they would direct the question specifically
at one or other of you, and if, for example, you, Dr Taylor, have
answered the question to Mr Bronsdon's satisfaction then I trust
Mr Bronsdon will not comment, unless, of course, there is something
he wishes to add or something he wishes to disagree with. But
I am afraid we will not have time for both of you to answer every
question. But could I start, having welcomed you here, just by
asking perhaps Mr Bronsdon, first, if he would tell us about his
organisation, which is the Scottish Energy Environment Foundation,
and his role in that organisation, and then I will address Dr
Taylor?
(Mr Bronsdon) First of all, good afternoon,
and thank you for providing me with the opportunity to speak today.
The Scottish Energy Environment Foundation has been set up to
fill a gap within the current policy and technology area within
Scotland, whereby there is not a single organisation (until the
establishment of the Scottish Energy Environment Foundation) that
can dip into all of the relevant areas for promotion and development
of new and emerging technologies, and speak on these issues without
having either a commercial driver, as a business organisation
developing those products, or from a planning perspective. The
purpose of SEEF is to create a standpoint that takes all of the
issues into account, but takes the middle ground of where the
recommendations should be for work.
2. Is this a private company or a government
agency?
(Mr Bronsdon) It is neither; it is a `not for profit'
organisation
3. As a charity; and the aim is to promote technology
rather than promote wind and wave power?
(Mr Bronsdon) It is to promote technology, but, the
remit, wind and wave, falls into that and it is also promoting
policy drivers that will point out where the work needs to be
done; so it is both policy and technology.
4. Thank you very much indeed. Dr Taylor, we
know you are Greenpeace, and I think most of us will have a fairly
good knowledge of Greenpeace, but if you could just introduce
yourself and your particular role within Greenpeace?
(Dr Taylor) Yes. My name is Ian Taylor, and I am a
renewable energy campaigner for Greenpeace in the UK and I work
within the Climate team, and Climate Change and the problems caused
by burning fossil fuels are the driver for the campaigning on
the solution of renewable energy, including wave power.
5. Starting with you, Dr Taylor, you are an
energy campaigner; we note, from the Government memorandum, where
they say that: "None of the wave or tidal stream concepts
has yet been demonstrated to be commercially viable, nor has their
technology been demonstrated as viable over a significant length
of time". Would you tell us what confidence you have for
the present technologies, and, if you have little confidence in
them, what do you pin your hopes on?
(Dr Taylor) I think we should take note of the fact
that there has been a test device on Islay, for example, which
has worked for ten years, successfully. There has just been the
installation of the follow-up to that, which is surviving and
operating; you will be hearing from its operator, indeed. I would
make the comment that I think that that pessimistic viewpoint
sits ill with a paper I was reading this morning, which is an
update on the Danish programme, which looks at the commercial
possibilities, and I noticed that it draws a comparison between
the costings of the first Danish offshore wind power development
and the present costings, as they would calculate, out of their
analysis of the Danish programme, to support wave power, and they
draw favourable comparisons. The costs of their wave power calculation
span the costs for the first offshore wind power developments;
so they take a much more optimistic viewpoint, what they are saying
is that this is something which is approaching commercial readiness,
not that it cannot be realised in the next ten years, which is
the DTI position.
6. So would you take the view that most things
on the drawing-board are expensive and inefficient, and it is
only when you get them off the drawing-board into physical form
that they become cheaper and more efficient, and unless we take
them off the drawing-board and start we will never get the economics
right?
(Dr Taylor) I think, even on the drawing-board, they
are starting to look attractive, and they are in a much better
position than wind power was, when that was starting. Yes, we
need to get there, and it is this difficult question, which I
am sure has much engaged the Committee, about how you turn expertise
and excellence in the academic domain, and, indeed, in the small
industry domain, that is where wave is also happening at the moment,
into something which is a large commercial success story; and
in my memorandum to the Committee I laid out a series of measures
which I think would help that.
7. Thank you. Mr Bronsdon, what do you think
the main barriers are to start the commercial exploitation of
wind and wave power?
(Mr Bronsdon) The commercial barriers that are being
faced at present are the way the market operates, to an extent;
with the proposed buyout price for renewable technologies against
conventional technologies coming in at around five pence per kilowatt
hour, there is little incentive within the market for suppliers
of energy to contract generation that comes in at above that cost.
Until those signals are changed, possibly by recognition of environmental
benefits, through the Renewables Obligation certificates, or through
reflecting the carbon content, or lack of carbon content, of renewable
and emerging technologies, those signals will not be there. Additionally,
I think the view is also that you have to take the technology
development of getting renewable wave and tidal forms of energy
into demonstration, to try to redress some of those issues, whilst,
at the same time, actually putting in place the longer-term infrastructure
that is required, if you want to take the massive potential that
exists and bring it into a UK energy mix. The reason I say this
is that at the moment you could put a lot of money into developing
wave and tidal power, but without investing in infrastructure,
such as the grid system, you will end up with a great source of
generation but no socket to put the plug in, to match the plug
and socket together.
8. Really, you have answered the next question
I was going to ask you then; but the cost of the beefed-up transmission
system, of course, has to be taken into account as part of the
cost of the development, does it not? In fact, it is better to
take it into account at the beginning, rather than ignore it and
then find out it is there later, which might kill it; is that
correct?
(Mr Bronsdon) That is correct, yes.
9. Fine. My final question then, before we go
to Dr Turner, is back to Dr Taylor. Do you think that the wave
power will always be a niche market on islands like Islay, or
do you think wave power could come further down the coast of the
British Isles, so that it is nearer to significant areas of population,
or far enough down, say, to Glasgow, but down to the English areas
of population as well?
(Dr Taylor) It has the potential to supply the UK
as a whole, not just to the Islands, and, indeed, not just to
Scotland. There is a resource which is one of the world's best;
you have to go to the tip of New Zealand to find something which
significantly betters it. We have got to get grid strengthening,
which is not just at the point of take-off, but which is going
to the areas where wave power is, where the resource is, and,
as you were pointing out, that is not where the centres of demand
are. I would differ somewhat from Chris, in that it is important
that the cost of grid upgrade is not borne by the small wave power
companies in total; there are reasonable costs to connecting through
the closest bit of the grid, but we have got to have something
which brings in other monies. In our paper, we have suggested
that there should be a programme that is looking at the order
of £50 million per year; some of that money, sensibly, should
be spent on promoting strategic grid upgrade, because if it is
left to the small firms it makes the costs of their devices prohibitive.
10. I must allow other Committee members to
come in, but if I go back to Dr Taylor for a moment; when Sizewell
was built, on the Suffolk coast, which will be away from the main
grid, the spinal grid of the country, do you know who was responsible
for paying for the connection from Sizewell to the main grid,
was it the power station builders, or was it the grid that paid
for their lines to go out to collect the electricity?
(Dr Taylor) I do not know the answer to that.
11. But it is a point, is it not; it is a point?
(Mr Bronsdon) Just to come back, against Ian's comment.
I was not suggesting that the developers should bear the cost
but that it should be recognised that there is a significant cost
that will have to be borne.
Dr Turner
12. I will address this to you, Mr Bronsdon,
but I am sure Dr Taylor has got a view. Do you think that the
Government has got a coherent overall strategy for wave and tidal
energy at present; in other words, does it have any idea of how
to take ideas all the way from the drawing-board through testing
prototypes and commercial demonstrators? Do you think so, or not?
(Mr Bronsdon) I do not believe it is a coherent and
focused strategy, but I believe it has a legacy of a strategy
from research and development from the past. Now I would hope
that the outcomes of the Committee will set in place the conditions
to create a coherent strategy for the future.
13. Do you want to add to that, Dr Taylor?
(Dr Taylor) Yes. There is not a coherent strategy
at all. We are lacking some of the key elements; we are lacking
the political objective. One of the first things you should have
is a recognition that politicians want Britain to realise the
potential that wave power offers, industrially, I should say,
as well as environmentally. Countries that have succeeded in wind
power have set targets ten years, 20 years, 30 years, hence, rolling
targets; there is nothing like that for wave power, and there
should be. Now that has to be backed up by a series of other measures,
of course, that come in underneath that, which are unpacking how
you actually do things, like the grid upgrade, but also the strategic
interventions to help move forwards. And we have got rather hung
up on the problem that it is impossible for the Government to
back winners; that is the particular sort of problem that I get,
again and again, meeting successive civil servants, and ministers
particularly. And I think there is a real distinction to be drawn
between picking winning devices and looking at a whole sector
that obviously has huge potential, of which wave power is a very
good example, yes; the Government should not be going in there,
picking out particular technologies that might or might not make
it. But lots of countries are moving in on this, it is something
which is on the verge of commercial viability, other countries
are pump-priming that, and things like putting money into a test
centre that could help all of those developers will be a very
good, strategic intervention at a lower level. So I would like
to see several tiers that help people move through and move towards
a target, because one of the key things in targets is the signal
to investors, and we need to get those signals out there, the
sorts of signals that show that Britain is the place to put your
money if you are an investor because there is going to be a determination,
politically, to help this through.
14. If we can convince the Government that that
political determination should be made explicit, let us say, for
instance, a target was set of something approaching 100 per cent
of our energy needs derived from a combination of wave and tidal,
which theoretically is not impossible, what elements would you
want to put into a strategy to achieve that within our lifetimes?
(Mr Bronsdon) If I can make a comment first. It separates
into two distinct areas. One is looking at the short-term measures
that are required to maintain and support the existing industry,
in terms of getting demonstration projects off the ground that
will allow a closer analysis of, first of all, the costing basis,
and also the efficiency and performance of those systems; but
the second issue is to look to the longer term. An easy comment
to make is that, if you look at our situation today, in terms
of the current generating technology, in 50 years' time it is
unlikely that any of that existing plant will be in operation.
If we want to take advantage of the great potential in the future
then actually we should look to achieving that through a Utopian
ideal, of perhaps 100 per cent from wave and tidal energy, and
then backcast, so work through the steps that we require from
the present situation in order to move that forwards. And that
is a realistic way actually of assessing the challenges that we
are going to be facing, and also the timescales that that will
dictate for a strategy.
Dr Gibson
15. Dr Taylor mentioned a political dimension.
Does he think nuclear power has got the inside track in this,
is that the political message that is predominant in this country,
that nuclear power is the solution to the problem, and that they
are the strongest lobbyists, they have got the most power, in
the political sense?
(Dr Taylor) I would judge, from the evidence, perhaps,
that there has been a very large amount of support that has gone
to nuclear power and that that has not been available to the likes
of wave power, in fact, the wave power programme, of course, was
shut down; and it is commendable that that has been restarted
in a small way, at least, by John Battle. Perhaps to come back
to the question about the elements of that strategy, yes, if we
had those targets, what would you fund with that money if it had
not been going somewhere else, I have said that we would want
to see grants that would bridge the gap between the prices that
electricity sells at and what wave power can achieve at the moment;
we have suggested that there is merit in spending as much as £50
million a year, not just on grants. I think you would then look
at how you upgrade the grid, you look at how you have a test centre.
I think it is very important we have a strategy which brings in
the big hitters, by which I mean the firms that are beginning
to move in to offshore wind power. The oil and gas industry have
skills which are directly applicable to putting pieces of kit
out in very hostile, marine environments; and that is what you
need, with wave power, and that is one of the changes that have
happened in the last couple of decades, that we have seen a lot
of expertise built up there. Now there will be further problems
to overcome; what we need to do is draw in firms that have the
resources to overcome obstacles and hitches, it needs to be a
`can do' approach, and that needs to be backed up with money.
We need to ensure that there is a domestic commercial market for
wave power, so that not just the test centre is a showcase for
firms but actually something which creates a market in the country;
now that means domestic targets, it means grant funding, it means
that there should be a way in. We have got a renewable energy
obligation, at the moment, but wave power is not going to get
a look in, it needs to have grant funding to bring it in there.
And then, I think, at the lowest level, we need to just cut the
red tape, there needs to be a one-stop shop. Since I wrote my
memorandum, actually, Peter Hain has suggested that, for offshore
wind, he is consulting on a one-stop shop for getting consent
procedures for offshore wind; we need the same for wave power,
because, the small companies, they cannot possibly be tangled
up in red tape, where they spend half their money trying to get
all of the bits sorted, from MAFF, or from DTI, and that needs
both consents and grants.
16. We have already edged into funding, and,
at the moment, it comes from a variety of sources, the EU, EPSRC,
the DTI does a bit, there is the Renewables Obligation, and there
is the private sector, venture capital industry, which tends to
be rather greedy and, therefore, is not necessarily appropriate.
Do you have any views, first of all, on the areas that are the
priority for funding, and on the financial support mechanisms
that need to be in place to make it work properly? Do you think
that the present, I hesitate to call it a system, do you think
the present situation is sufficient to get us there?
(Mr Bronsdon) On the present situation and the funding
sources, I do not believe that it will get us there, at present.
In terms of the options that could be available, one method, if
you look at an issue that is topical within the electricity industry
at present, is the use of Climate Change Levy receipts; at present,
they are being recycled back into reducing National Insurance
contributions for employers. Now there could be a change in that,
or a modification, to actually taking with the one hand but then
reinvesting it into the same industry, to develop renewables;
that way, you are moving the tax base from taxing the bad areas,
that are perceived, and giving to the areas that are warranting
development.
17. There is a range of competing technologies,
of course, and the tricky bit is getting from concept to a demonstrator,
and each stage gets more expensive. Do you have any views on how
you can set sensible criteria to produce a mechanism for selecting
which are going to be the ones to go forward to the final stages,
and supported?
(Dr Taylor) I would say that the example set by the
Danish programme should be quite a good one; they have a staged
approach, and each stage is very clear, it is very clear at what
stage devices have to be to bid in to a particular stage, and
it is clear that if they complete successfully that stage they
go on to the next one. And they have assessed, I think it is,
40 devices, over the last couple of years, and some of those are
getting to the further stage. The business of clarity is really
important, because uncertainty over whether you are going to have
continuing grant really can nobble you, if you are trying to work
on quite difficult cash flows. So I think one of the things we
fail quite badly on is that we have systems which are delayed
by infinitely long consultation over renewable energy, and other
things, and by the time you actually get round to disbursing the
money there have been so many hurdles to go through. So, I would
say, something that was tiered, like the Danish programme, is
a good approach.
18. We have not talked about how much money,
really; do you think that there is a sort of minimum `critical
mass' of investment that needs to go into this potential industrial
sector, really to get it moving, and do you have any thoughts
about how much that needs to be?
(Dr Taylor) We have suggested a figure of £50
million per year, and that is something which would probably need
to be geared, and you would want to change how that was spent
over a period. Putting it broadly, you have to be talking tens
of millions of pounds, at least, if you are serious about this,
and the sort of gearing we are talking about is, you would move
from a situation where you have larger grants, proportionately,
for smaller projects, and then move to smaller grants for bigger
projects, because you are reaping the economies of scale. I think
it is important though not to be obsessed with the R&D, we
have got to be getting out there and facilitating a broader picture;
so something like a test centre, well, that could be £10
million to bring the thing into being, but that would be very
legitimate government funding. But, also, there is no point in
having all these things if you cannot plug them in; and, at the
moment, you have a stand-off, where, on the one hand, the utilities
companies are saying that the Government should pay, and Government
are saying the utilities companies should pay. And there is room
for an intervention there, something which offers some carrots
and sticks. And then there is another domain, which I think is
this business of making it attractive for investors, greedy or
not, to come in behind that. I would like to see something which
is looking to bring in the skills, not just from offshore oil
and gas but also the manufacturing hinterland, making it attractive
for companies to diversifythe supply chain for these devices
reads like a roll-call of traditional engineering strengths, many
of which are going downhill, and I think that that would be a
legitimate use of government funds.
Chairman
19. Before we have too many subjective comments
about the investors being greedy, the very word `investor' means
he is expecting something back from what he puts in, it is a definition.
(Dr Taylor) Exactly, and I am not meaning to have
a crack at investors at all.
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