Select Committee on Science and Technology Minutes of Evidence


Examination of Witnesses (Questions 120 - 139)

WEDNESDAY 30 OCTOBER 2002

PROFESSOR MIKE HULME, DR JIM WATSON AND MR ALISTER SCOTT

Dr Turner

120.  If you were holding the purse strings, if you were the DTI, would you be trying to pick winners? Do you think that we are actually playing to our natural strengths probably in the UK in terms of backing different technologies? So which ones, leaving aside fusion, we know your views about fusion, leaving that aside, where would you put the money if you had it?

  (Dr Watson) As an adjunct to our fusion point, would be basically fusion has a particular time scale attached to it. It has a particular potential. But there are other options that also have that time scale and potential and they should be funded to the same kind of level. We have suggested sequestration, for example. If you can fund fusion to the tune of £40 million a year, why not carbon sequestration? Ditto hydrogen, in some cases. I am not saying I am an advocate or not of any of those options, but certainly I think there is a case, if you are going to be bold about one of these options, you should certainly be bold about more than one because they are so uncertain and long term.

121.  But looking at other technologies which do play to our natural strengths, like wave, tide, offshore wind, would you be putting more resources into those? And do you think, given more resources, they could beat the time scales attached to fusion?

  (Mr Scott) I think they are complex comparisons to make and when trying to decide where to put R & D resources, you need to take into account a range of criteria. There are things like the natural resources that you have just spoken about which the UK is endowed with, but they also relate to the R & D skills that are there in the science base, but also the industrial skills that the UK has for exploiting the science and technology that comes out. So you cannot simply say "Well, we should pick a winner on the basis of one of these things". It has to be an assessment of the UK's capabilities in all of those areas. You will only have successful relationships between research, technology and innovation when all of those factors are present. For example, the UK does very well in exploiting pharmaceuticals based science, which is done in UK universities, and that is because we have a strong pharmaceuticals industry. Whereas in ICTs we do not have a very strong indigenous industry and so a lot of the UK science tends not to be exploited in the UK. So that is the kind of rich analysis that you need to make when deciding on R & D priorities.

122.  Would you not say that in terms of marine technologies we do have the industrial base because of our experience in the offshore oil industry? A lot of transferable technology.

  (Mr Scott) Absolutely, and with respect to photovoltaics, by comparison, Japan has made huge investments in PV, which has been written up and which we refer to in—

Chairman

123.  We went to see it.

  (Mr Scott) Right. Very good. We mention that in our submission. The Chief Scientist's review of energy R & D, quite rightly I think, talks about looking to the next generation of PV which is underpinned by organics and polymer science. And that may be one way through. Which again is an area where the UK has science strength but also industrial strength.

Dr Turner

124.  What is your feeling about the role of research councils in energy R & D? Do you think that they are giving it adequate priority and does it properly reflect the urgent needs for developing the non-carbon technologies if we are going to achieve our Kyoto targets, let alone any other targets?

  (Professor Hulme) I will make an initial comment. Again, from my perspective of actually interacting with three of the research councils that fund the Tyndall Centre, that is the NERC, ESRC and the EPSRC—

125.  Temporarily ignore the fact that you get funding from them.

  (Professor Hulme) Yes, okay. But I think again the information that we tabulated in our submission indicates that actually there is relatively little focused energy R & D that comes through those research councils at the moment. I think that may be partly rectified once we see the final outcome of the 2002 spending review and we refer to this potential new 20 or 30 million programme on sustainable energy, which is certainly very welcome. But certainly up until now it has been relatively limited. The other comment that I would make about the research councils' involvement here would be the importance of again paying due attention to the need to integrate across the research council base. So this is not an issue just for EPSRC. It is not just an issue for NERC. This question has got to be tackled at a cross-council level and that is going to require greater coordination, greater flexibility in the way in which the research councils work together and establish research capacity, fund research capacity within the United Kingdom.

126.  Research councils tell us that they propose to do just that, which presumably you are aware of. However, given their track record so far in supporting and stimulating R & D in energy, are you satisfied that they have got it right?

  (Professor Hulme) I think there is still some way to go in the structural issues about how the research councils actually coordinate and manage large research programmes that spill across their territorial boundaries, if you like. There is certainly movement to try to make this more effective but, from my experience, I would say that there is still a considerable way to go and one of the things that I am interested to see next spring is the report, I believe, that the RC UK will be publishing, which is laying out exactly how this new umbrella organisation will improve the coordination and communication across the various research councils. I think there is a big opportunity there to make those words that you have referred to actually deliver a new type of cross-council cross-disciplinary research. I think sustainable energy is one of the best exemplars that we could find of why that is going to be needed.

127.  You have already referred to the high level of spend on energy R & D in Japan. My impression, having visited there, was the accounting is slightly different, so it may be somewhat over-stated, but nonetheless it is massive compared with us, but it is very narrowly targeted. Do you see that approach working in this country?

  (Mr Scott) Again, we are back to the question of picking winners, are we not?

128.  But they pick their winners and then they put truck loads of money back into it.

  (Mr Scott) I think the UK policy system instinctively shies away from picking winners. I think there is good logic from history, historical evidence and experience in not doing that. But to a certain extent some of the non-carbon energy sources that we are talking about are so broad and generic that we are a very long way from picking winners, from being in danger of picking winners, given our low level of comparative investment in energy R & D. You know the sun is going to shine, the wind is going to blow, wave and tide will come and go. These are all areas where we could very effectively spend some R & D money and certainly a whole lot more than we are spending at the moment. Just to finish that, I think we would not encourage picking winners, and in any case, I do not think the policy system would accept that, so a modest investment, certainly a large increase on what is currently invested in all of these areas, would not go amiss.

129.  If this increased investment were available to you, how would you want to see it directed? How would you organise an expansion of the British effort? Would you simply give it to the research councils or would you do something different?

  (Professor Hulme) Let me start by making one comment before asking my colleagues to add. One key issue that I think Alister referred to is the skills base in the UK. Again, from my personal experience within the Tyndall Centre over the last two years is that we have found across our partner institutions difficulty in recruiting suitably skilled and qualified researchers to work, particularly on our energy related projects. This is not a problem that we find in the environmental and social side of our research, but particularly in some of the energy and engineering aspects of the work that we are doing. So that clearly suggests or points to a potential skills shortage in this area. So one of the elements, to answer your question, would be investing to ensure that there was expanded investment, particularly at post-doctoral level, in the relevant technology related disciplines that would contribute to this. But that is only one part of the answer. Maybe Jim or Alister would have an additional priority.
  (Dr Watson) I just wanted to add an adjunct, which is that it is not just about research councils who are concerned with universities. It is about the industrial system as well. One of the most striking things—and I have put together figures over many years since privatisation of utilities, for example—is that the old research centres now no longer exist or are a shadow of their former selves. British Gas in Loughborough is one good case in point. It now employs maybe 400 people. They have had a lot of cuts because of the environment they work in. You have got to create, as well as just putting money somewhere, create the conditions where those companies, whether they be British Gas or electricity companies, are allowed to conduct some more R & D. Not just R & D which is business as usual from this year to the next, but R & D that transforms the energy system in the way that we need it if we are going to attain these low carbon goals. So it is partly spending money, but it is partly about the regulatory rules under which these companies exists and at the moment all the regulatory rules tell them to chop the R & D department and keep two people and a dog to keep their eye on up and coming technologies.

130.  Their accounts show they have done just that.

  (Dr Watson) Yes.

Mr Dhanda

131.  You have partly tackled the skills question already and you talk about your relationship with DTI, which you say is a good one. But what about the relationship with the Education and Skills Department in terms of tackling some of those shortages? Because you must have some idea as to exactly how you are going to do it.

  (Professor Hulme) I cannot speak from any personal experience of engagement with the Department for Education and Skills. My experience is again through the research councils and the money that actually comes into universities for post-graduate training, Masters training and indeed for post-doctoral research. I think there, there clearly has been recognised again a significant need to enhance the attractiveness of staying on at university for science and engineering disciplines by increasing stipends, for example, for post-graduate students. So that is one thing. I think the other thing too, in relation again to energy-related research in universities, is greater flexibility to get the appropriate, let us say, mathematical engineering or physical science skills working alongside disciplines who actually understand the environmental and social context in which these new technologies are, in the end, going to be accepted or rejected by society. This leads to issues like schemes to have post-graduate students working again on cross-council initiatives. So like an ESRC and an NERC joint programme for post-graduate research or to have greater investment in what are called "discipline hopping initiatives" to allow an engineer, let us say, to spend 12 months working in a social science department or in an environmental science department to actually allow the richness of this research to come home. I would argue that those sorts of schemes need greater injection of funding.

132.  Is there a link, would you say, between the R & D issues that you have already outlined, and you say that you would like to see more of it from the Government effectively, and a shortage of skills in those particular areas? Would you say there is a link between the two?

  (Professor Hulme) I would have thought undoubtedly there is a link, yes.

133.  Could you elaborate on that?

  (Dr Watson) I could with an example. It comes back to your DTI question actually, in that I did a lot of work on cleaner coal technology and the people in DTI said they fought hard to get their budget which at the time and, I think, still is, about £4 million a year. But one of their real dilemmas was actually getting more. They really wanted more but actually the person who ran it was saying one of their dilemmas was where do you find enough good projects to spend that money on. So I think you are in one of these classic chicken and egg situations. Of course, doing funding at the post-graduate level would then bring through trained people to then populate, whether it is in academia or industry, to be able to absorb that extra spend, but it is not something you can just do overnight.

134.  Is there any confusion as to whether this is a DTI issue or whether it is an Education and Skills issue in your minds?

  (Mr Scott) I think it is partly about long-term government policy signals that since the late 80s energy R & D is going to be cut and we are now reaping the rewards of that policy, that researchers in those areas either have not been trained and brought through, or have left the country, or have retooled into another area. So in the same way that you have had that long term signal that has degraded the research base, you need long term government signals to rebuild that research base, not only within the public sector but also within the private sector, so that international firms make the decision to base their R & D labs in the UK in the sustainable energy area. There is some evidence that firms such as BP are putting facilities elsewhere; in Spain and Germany, for example. So these are issues for long-term government signals. As to whether you can increase your energy R & D capacity quickly, you basically face a make or buy decision. You either make that capacity by training people or retooling them, or indeed investing in areas that are sufficiently generic, and that is part of the attraction of investing in polymers, for example, it is a fairly generic area of science, it has application to other areas as well as sustainable energy. Or you can buy by trying to get capacity back. You can try and attract British researchers back from the States or wherever they have gone. So those are some of your options.

  Chairman: We have three more areas we want to trawl in about 15 minutes, so we will try and sharpen it up, if we may. Geraldine, you go first.

Geraldine Smith

135.  You have mentioned you are critical of the continued levels of funding for nuclear fusion, but should you not really be arguing for more money for the other technologies for R & D? Is it not that all the money that has already been spent on nuclear fusion, all the billions of pounds in the research, to stop it or to cut it back very heavily now, would that not just be a waste of money for the money that has already been spent? The UK are leaders in research in nuclear fusion. There has been much very good research done, would you not be hampering all that progress and just setting it back to square one if you cut back on the funding?

  (Dr Watson) Yes, I guess you would, but the converse is that you continue it in perpetuity despite—even if there is not any evidence that the time horizon is getting any shorter. Fusion has always been 50 years ahead ever since 1951 the US Government started—

136.  It is 30 now.

  (Dr Watson) Well, I would probably disagree with that, but we found an article, the US Government spent $17 billion on fusion already. I mean how many more billions do we need to spend? But I go back to my previous point really; which is not that I want to swing an axe through the fusion budget as much as bring other options which are equally likely to do what you are trying to do with fusion. If you have another large scale technology which is non-carbon which can also do it, you should bring the funding of that technology up to that level. It is a proportional question as opposed to actually singling that out and saying chop it. I also understand with fusion there is an issue about the politics of the European Union. A lot of our money is spent under the Euratom Treaty and I understand that certain people's leeway to actually make decisions to reduce that funding is quite constrained by the politics of the European Union actually.

137.  So tell me, just to make it clear, do you not feel that real progress has been made with research and that things are moving on with nuclear fusion and that those time scales can be cut?

  (Dr Watson) I am rather sceptical, I really am. I mean I know there are headlines, probably at least once a year, often I notice in the Observer, and it is usually saying yes, we have got fusion power for a certain amount of time, but they are not moving ahead. There is not this great breakthrough of building a demonstrator which works or whatever. But that may well happen in the future. Again, I would not want to be a person who is saying we should chop it, but all I am saying is that there are other things out there that are equally likely to come through which are just hardly getting any money now.

138.  You are actually are saying in your submission that it should be reduced.

  (Mr Scott) Proportionately, by increasing the other sources of funding. I do not think we are pursuing a rather instrumental view of science which says that you should only fund that science which produces immediate pay backs for society. That is seen by many scientists as rather a philistine position. There is some science which is good to pursue for its own sake and fusion may come into that bracket. There are some analyses of spin offs from fusion which try to analyse what other spin offs in terms of commercial technology come from fusion and some of those indicate that the UK is getting a pay back of roughly, I think, about £3 million per year from its investment. So that is a one in 10 pay back. Now that kind of analysis is useful in assessing the value of the investment in fusion, but I think overall our point is that all of the other types of R & D should be brought up so that the fusion is very much more in proportion, because at the moment it seems to be out of proportion.

  Chairman: I will come back to fusion, but I saw your eyebrows go up at the some of the answers. I would like you to get stuck in on those issues.

Mr Hoban

139.  I just want to go back to the comment that Mr Scott made in answer to the previous batch of questions. You referred to BP investing overseas in Spain and Germany. Why do you think they are not investing here and what do you think we should be doing to make sure they do invest here and not elsewhere?

  (Mr Scott) That is partly about R & D policy but it is partly also about industrial policy. It is about the support for PV programmes in other countries that does not exist here. So this again brings us back to the point that you cannot simply pick off R & D as an area of policy you can pursue in isolation from other areas. If you are serious about climate policy and seeing energy R & D as part of that policy, then you will pursue a range of policies together to try to increase the uptake of non-carbon energy technologies. That is what is happening in Germany, where you see a very large PV programme, and Spain as well, despite the fact that they have a smaller GDP than us, they are pursuing that. Some would say they are sunnier, but nevertheless, PV still has good applications here in the UK, even niche applications that are viable at the moment.


 
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