Examination of Witnesses (Questions 128
- 139)
WEDNESDAY 21 MARCH 2001
MR PETER
FRAENKEL, MR
ALLAN THOMSON
AND DR
RICHARD YEMM
Chairman
128. Mr Fraenkel, Mr Thomson, Dr Yemm, thank
you very much indeed for coming before the Committee this afternoon.
I believe that you were in the public gallery for the first session
so you know how the Committee operates. Before I put the first
question to you, could I ask you if you would state your name,
the company you work for and the position you have in that organisation?
(Mr Fraenkel) My name is Peter Fraenkel.
I am Managing Director of Marine Current Turbines Ltd, which is
a company which is, I think, unique in specialising in developing
technology for marine current usage, although in partnership with
a number of rather more well known companies as well. That probably
says it all. I have a background of working in renewables for
the best part of 20 years.
(Mr Thomson) Allan Thomson, Managing Director of Wavegen,
a company specialising in wave energy technology.
(Dr Yemm) Dr Richard Yemm, Managing Director of Ocean
Power Delivery, another company specialising in the development
of wave energy equipment. My personal background is in elements
of wind energy technology.
129. As we go through the next hour we shall
not be able to put every single question to each one of the three
of you because we will not have enough time. Committee members
will probably indicate which one of you they wish to answer the
question, but if any of the others feel they have a point they
wish to make, if they could catch my eye I shall make sure they
are called to put their point of view. The question I want to
put now I do want to go to all three of you. There must be technical
obstacles, I imagine, to the sort of work you are doing, as you
are working in seas that have to be moving, otherwise you would
not be getting any electricity from them, and there must be problems
such as corrosion, marine fouling, the hazardous nature of the
movement of the sea itself. What are those problems and what is
the biggest problem you have had to overcome to be able to make
a commercial device for generating electricity?
(Dr Yemm) Of course it is a very aggressive environment,
the off-shore world. I would like to make the point that what
has changed since the previous United Kingdom wave energy programme,
is the enormous wealth of experience which has been gathered by
colleagues in the oil and gas sector, and although most of the
points have been dealt with very thoroughly by them in terms of
structural considerations, corrosion, fatigue, access, installation
operations, maintenance, etc., I firmly believe that the biggest
hurdle we are going to face is operating and maintaining this
equipment on site. I think the status of the engineering to get
the structure and systems reliable enough, cheap enough, ultimately
efficient enough, is there. I think the challenge will be to operate
a low enough cost annual maintenance programme to keep the equipment
running at peak efficiency for the kind of length of time we are
talking about. The specific technological issues have been addressed.
It is up to each system to prove its operability.
(Mr Thomson) I think the technologies have been resolved
and the solutions are there. The key now is to bring them down
to a price. That is a combination of getting real life experience
in the environment so that we know what the actual loads are and
then after that design down to those loads and then from there
moving on to mass manufacturing to bring the price down further.
I think there are no technological hurdles to be overcome.
(Mr Fraenkel) I very much go along with what both
the previous speakers have said. The biggest difficulty we see
in the area I am working in, which is marine currents, is very
much on the off-shore aspects of it, operational problems, installation,
maintenance, keeping the technology going, and in a way to learn
this and to get the experience and credibility, reduce the risk,
which is what is necessary to attract investors. A key requirement
is to have some demonstration projects under our belt and some
success behind us.
130. On that point I would like to address this
question just to Mr Thomson because Mr Fraenkel has just said
we need to have some demonstration projects. Your company, Mr
Thomson, Wavegen, has got a device in Islay that has been operating.
What lessons have you learned from that demonstration project
in Islay over the recent year or so?
(Mr Thomson) Most of them have been to do with project
management in terms of selection of contractors and how one actually
executes the task within the weather windows. Our contractors
often have been optimistic in their views and have resisted some
of the advice we have given them and this has cost us time penalties.
Also, we have learned that there is general resistance from the
consulting engineering community to design perhaps more bravely
without hard data, which I can understand. Everyone needs real
data to design economically. Therefore, the first devices tend
to be substantially over-designed and this has a major cost impact
on companies like ourselves.
131. Do I take it that none of you has had any
problem with the connection from your device to the grid, the
electrical connection from a moving device in the sea, along the
sea bed, up the sea shore, to the grid? That is not a technical
problem that gives you too much difficulty?
(Mr Thomson) The three devices we have built have
all been static and therefore there are no moving components.
However, off-shore the gas industry do have floating structures
with power umbilicals going to the sea bed and they do not appear
to have difficulty.
(Dr Yemm) There are precedents, the precedents are
not perfect and we are still learning about it, but consultation
with appropriate industries and clever design for connection of
the umbilical at an appropriate point we have had indicated to
us is not a major technical hurdle.
(Mr Fraenkel) We have probably a slightly worse problem
than the wave energy people in the sense that we are deliberately
going into areas with very high currents and obviously there is
a risk of disruption of cables in that situation. We have not
yet had a project which is mains connected from any distance off-shore,
so we are just anticipating the problems. However, as Richard
Yemm quite rightly said, there are precedents. There are cables
across the Pentland Firth, between Jersey and France and other
places where statistical data exists as to how the cables will
withstand the conditions and it is a problem but not an impossible
problem.
Dr Turner
132. I am not quite sure whom to address this
to because I guess you all probably have a view. I guess Mr Thomson's
company is slightly further along the road in some respects because
you have done it on the ground. Do you feel that the Government
has a coherent strategy for developing wave and tidal energy at
present that can take ideas from the drawing board through development,
through testing and building prototypes and getting them commercially
exploited? Is there a strategy that you are aware of? Is it helping
you?
(Mr Thomson) I am not aware of a coherent strategy,
although over the last year there has been a dramatic difference
in the approach from the DTI and government organs generally to
our kind of technologies. My experience over the last ten years
is that it is a day and night difference but from beginning to
end it is not clear to me.
133. You said there had been a step change in
the last year or so. Could you say what that is?
(Mr Thomson) Yes. There is now funding available for
wave energy. Previously there was not and therefore for there
to be funding at all is a major step forward. Wave energy in the
past, as with many of these technologies, has suffered from fitful
support. By the time one has a team together and projects together
the funding simply dies away and it is impossible to keep the
team together and therefore there is a finite period when one
has a total organisation to fulfil projects.
(Mr Fraenkel) In my case it is a different situation
because we are not talking about wave energy we are talking about
the tidal stream. Until quite recently there has been really no
policy from the Government on it. In fact, if you had asked officials
in the DTI last year they would say they do not have a policy
for tidal stream. Whatever they did say about it was based largely
on the study they commissioned back in 1993, The UK Tidal Stream
Review, which was rather negative. A recent contract which
they awarded to Binnie, Black and Veatch to look at tidal stream
technology has shown, as we suspected all along, that in fact
it was an extremely pessimistic study at that time. I have to
support what Allan Thomson has just said, that there seems to
be a change, I think as a result of very recent work, namely the
Binnie, Black and Veatch study which was only completed last month
and it is only in draft form at the present time but it endorses
more or less what we have claimed all along. I went to a meeting
addressed by Peter Hain yesterday and I was able to ask him a
question about what proportion of the £100 million for R&D
that the Prime Minister mentioned the other week might be available
for marine renewables, and he, quick as a flash, said: "£55
million", which I thought was rather encouraging, although
what proportion of that might go towards marine currents I do
not know. The truth is that the DTI has been either negative or
neutral, certainly not positive, until quite recently but we have
real hopes that things are changing at the moment.
(Dr Yemm) I would like to warmly welcome the change
in status of the United Kingdom wave energy programme. In the
absence of a lot of proven technology, in the absence of a firm
market, it is absolutely essential for us to secure investment
that there is at least clear support for R&D activities. The
budget at the moment is modest but that is understandable in a
way in the light of the previous United Kingdom wave programme.
I think it is finally up to the wave industry itself to show that
it can deliver good results with modest amounts of money, at which
point it clearly becomes easier for government to commit significant
amounts of money. Can I just qualify that by saying that almost
every single successful precedent for commercialising technology
has not been technology pushed. We do need R&D support; it
is essential. But it has been proven time and time again that
the most effective way is, as you mentioned, a coherent policy
to take the technology all the way from concept to commercialisation,
and that market pull must be present from the start. That is the
successful model used by wind energy and if the United Kingdom
Government is serious about commercialising wave energy so that
we can either utilise it here or sell it abroad as an export market,
then that is the model which should be followed.
Dr Turner
134. Can you give a view, Dr Yemm, and any other
contributions would be welcome, on the next question? What would
you like to see in a Government strategy for developing your two
areas of technology?
(Dr Yemm) Firstly, there are technologies at different
levels of maturity. This is absolutely clear. There are hare-brained,
not-even-on-the-drawing-board, schemes to partially proven demonstration
schemes such as the Limpet. We need to take account of this in
whatever strategy so, taking that as the starting point, I feel
that the technical promise and commercial promise and industrial
promise of wave energy systems, both at home and abroad, are so
compelling that commercial support (on a modest scale initially;
we are not asking for the earth, and recognising that there has
to be a risk assessment for the allocation of any funds or any
support) for technologies that prove themselves, such as demonstration
schemes, such as the Limpet if it continues to perform as it is
doing at the moment, should be offered to continue demonstration
immediately—not in a review round in 2010 when the process
will have been carried out in another country, but as and when
technologies are ready for commercial exploitation. They should
be offered the chance to offer sufficient rates of return to the
investor as off-shore wind and biomass are being offered now through
capital grant schemes. They should be offered that chance to continue
their commercialisation process and not be held up by the rest
of technologies. What we need is a measured but, if you like,
vigorous enough system to ensure that commercialisation is continuous
and not sporadic so that we reach a sensible cost of energy within
a manageable time frame.
Chairman
135. Would either of you like to make quick
comments because if we have long comments we are going to lose
the last few questions?
(Mr Fraenkel) I fully agree with everything Richard
Yemm just said. In addition to that, one of the problems in this
country in particular is the timescale at which things happen.
There has been a track record of really very slow development
in all these areas. Just to give an example, the Germans, in three
months over the last two years, put in roughly the same installed
capacity of wind turbines as we have put in since we started more
than ten years ago. The same could apply with these other technologies
if we carry on as before. My plea in a sense is for a system in
which obviously there has to be proper evaluation—you do
not just throw money at anything that comes along but it needs
to be evaluated quickly—and there needs to be some kind
of consistent support over a reasonably long time frame so that
things develop without hiccups and long delays while the next
phase is funded and so on, subject to completing milestones and
satisfaction in delivering to pre-determined targets so that one
can see that the money is being properly spent.
136. Are you content, Mr Thomson, with your
colleagues' comments?
(Mr Thomson) I think there should be support for demonstration
plant which gives good messages to the capital market.
Dr Turner
137. Which would you feel are the priority areas
for research and development spending in which you might or might
not expect the Government to participate? Are we talking about
more investment in basic research or, as Mr Thomson has just referred
to, the demonstration projects? Where are the biggest gaps?
(Mr Fraenkel) In our case I think it is probably rather
similar to wave energy in that the biggest problems are not amenable
to small scale modelling in the lab because basically the uncertainties
and the risks relate largely to doing the real thing at sea. We
need unfortunately some reasonably realistically large but not
enormous projects in order to get our hands dirty in a sense,
no doubt to make mistakes, because I believe there is a famous
quote that "experience" is a word we all use to describe
our mistakes, and we need to gain experience basically, but it
needs to be done in a carefully monitored and carefully controlled
manner. In that way I think we will make fast progress.
138. Mr Thomson, which is the best strategy?
To try and pick a few winners and support them very thoroughly
with a lot of funding, or support a broad range of projects with
less funding?
(Mr Thomson) My preference would be to do good due
diligence on the projects and pull them down to maybe two or three
and support them fully and deeply, and get success. Otherwise
you achieve very little in supporting a broad range.
(Dr Yemm) I think that support can be across a broad
range of levels. I think the DTI should move towards people who
have stuck their neck out, who are serious and who have pushed
their technologies a long way in the absence of support. I think
it is always dangerous (which is a general philosophy of mine)
to ignore fundamental research. It is cheap and quite often delivers
very good value for money. I think there is a place for both.
In so far as major support is concerned we do need to start picking
a few winners and the candidates will become obvious if they are
not already.
139. Dr Yemm, you are probably a good person
of whom to ask this question. If the Government is going to attempt
to pick winners how do you recommend it goes about it?
(Dr Yemm) I think the DTI is moving, in consultation
with ourselves and many other parties, I am sure, towards trying
if you like to impose a sensible check list, a tick list, a series
of criteria which must be met. We have always, right from the
very start, set out a staged development path, biting off manageable
lumps of technical risk at each stage. I think this is the model
which they would like to see: funding individual projects on a
continuous basis, not stop-start, to take each concept through
to its demonstration phase. Then, when the system is at a state
similar to the Limpet at the moment, it is for the programme to
decide whether or not it is (a) likely to be commercially viable,
and (b) survivable (which is part of the same thing), at which
point there should be a commitment to supporting it through demonstration
and commercialisation.
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