Examination of Witnesses (Questions 120
WEDNESDAY 30 OCTOBER 2002
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
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
(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
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.
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
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 thingsand I have put together
figures over many years since privatisation of utilities, for
exampleis 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
(Dr Watson) Yes.
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
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.
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 despiteeven
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.
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.