Select Committee on Science and Technology Minutes of Evidence

Examination of Witnesses (Questions 1 - 19)




  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 diversify—the 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.


  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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