Examination of Witnesses (Questions 160
WEDNESDAY 30 OCTOBER 2002
160. Have you all been quite successful in attracting
European Union Programme funding?
(Professor Jones) Yes, but I think again
it is incredibly onerous and incredibly bureaucratic.
(Professor Graham) It is a lot of work.
(Professor Jones) It is not worth it really in the
grand scheme of things. Certainly in the previous Frameworks.
And in fact, the universities would turn round and say it is not
worth it because there is no overheads on it. It is actually a
161. My next question was going to be; is it
the overheads, or the lack of overheads, that the EU Framework
Programmes do not pay that make your universities discouraged
from applying for the EU funding?
(Professor Graham) I think the EU expects
a different regime. In the universities in continental Europe
they expect better direct support for the infrastructure and they
are just putting in what you might call "top up" money.
So they are surprised at the lack of direct support in the UK.
But we, of course, look at the EU grants the same way we look
at EPSRC or industry or anything else and we have got live off
the whole thing. I come from the same college as Tim, and it has
been debated in our college whether we should go away from the
EU grants but fortunately they have taken the decision that that
would be a bad idea. But it shows it is debated. The level of
overhead is 20% and it is very small, but
162. And you have just had the transparency review
which has revealed all that of course.
(Professor Graham) It has. And also the
other thing, as Tim said, the level of bureaucracy required for
an EU grant, just the way they run things, is incredibly high.
So my judgment is that it is easier to get into the `train' of
getting one and being associated with appropriate research people,
but the amount of work you have got to do to put the grant in
place is enormous.
163. So assuming that networks of centres of
excellence, are important, I think we would all agree with that,
would we not, if we can build them, including across international
(Professor Graham) Yes.
164. What do you think we ought to be telling
the European Union through our members of it, members of the European
(Professor Graham) I think it is a difficult
argument, but I think they would say why is the Government not
putting in more supporting funding so that these guys can go out
and get EU contracts whuch are then financially worth more to
them. EU grants are not as bad as they seem. But I guess Government
would say this is not the way we run things in this country, we
are not prepared to put that money in.
165. Are any of you aware of the changes that
have been made in the bidding process for Framework 6 bids?
(Professor Jones) I think it will be
better. It is still a bit vague, but it looks more promising,
(Professor Strbac) I just wanted to add that I sympathise
with the level of bureaucracy and so forth, but we need to be
able to recognise that Framework 6 will be significantly different
to Framework 5 and this is now about really big players. We are
trying to get in, but my worry is that the research base in the
UK is comparatively smaller than big research labs in Germany
and France. We now find it increasingly more difficult, not to
compete, but even to cooperate with these big players. We are
now working on three proposals with Framework 6 and the size of
those are nearly 14 million Euro, 16 million Euro; these are the
size of the projects. The players in there, we are fortunate,
the place where I come from, because we are relatively well known
historically, but actually we are 10% of the size of the groups
which are actually dictating where the research is going. My worry
is that unless we redevelop this research base sooner rather than
later, we might become not irrelevant but with significantly less
say within these big consortiums.
166. Okay. I have a feeling that you need help.
(Professor Strbac) Yes.
167. Where do you think that help should come
from? Should it come from your own university or a cluster of
universities in your region providing a person who has the skills
to give you the help, or do you think the Government, through
one of the research councils, should positively foster applications
to the Framework Programmes among all universities?
(Professor Jones) I think there is a
government body, is there not, that is dealing with it. I cannot
remember what it is called. I certainly went to a talk by somebody
which represents UK
168. But I mean positive action.
(Professor Jones) Yes, they were trying
toit was a positive thing. I do not know how big the scale
of that operation is, compared to other countries. I think in
some countries it is very substantial. They are really trying
to lever money, European Union money.
(Professor Acres) One of the points that the Commission
have made in the past is that UK universities, by and large, are
preferred partners to these bigger projects in Europe because
they deliver what they say they are going to deliver. Also they
have a strong science base in many areas. But the Commission have
also pointed out that if the UK loses that science base, its position
in Europe will be that much weaker. My experience of sitting on
both sides of the fence is that, to some extent, as the UK research
councils tend to move more and more to applied areas, they are
almost competing with Europe. And Europe, as I understand it,
Framework 6, is going more and more to the exploitation of rather
than just the researching. I think one of the things to look very
closely at is whether we are making the best use of Commission
funding in the context of our university interest, or whether
we are getting too close to competing with them and losing the
Dr Iddon: Thank you. I think there are some
strong messages there. Most grateful.
169. Could I just say that with climate change
our future is in your hands, so I would like to thank each of
you individually for what you are doing. We rely on you. So we
are very aware of that and if we are aggressively trying to get
answers, it is because of the shortness of time, you understand
that, I am sure. Academically and technologically I am sure the
problems are very great. We understand them. I know that the political
problems are also great. Could you tell me in which sectors of
the industry you have been most successful in attracting industrial
(Professor Jones) My own collaboration
in photovoltaics. That has been a substantial collaboration with
170. That surprised me because we are far behind
other countries, particularly Japan and Germany. Why would that
be? Is it because of you as an individual going to the market
place and seducing them, or is it some other factor?
(Professor Jones) It is because they
want to develop a disruptive technology and not just modify an
(Professor Acres) I speak specifically in the hydrogen
fuel cell area. Until fairly recently that has been something
that the UK and Europe has been fairly low key.
171. I thought Johnson Matthey had been doing
(Professor Acres) That is slightly different
because they have global interests and they have been pretty active
for 30 years or more. What we found recently is that those industries,
from the oil industries to chemicals and materials industry, are
now picking up the message that there is something important happening
in this area and maybe we ought to be involved. And wearing both
the Johnson Matthey and the Birmingham hat, what we are now finding
is that people are coming to us and saying "Can we work with
you?" And that is not just industry; we are also finding
the GLA, the Advantage West Midlands, the Welsh Development Agency
and, of course, Scotland in the context of renewable energy. They
are all coming now and saying "Can we talk to you? Can we
join with you?"
172. What is driving this? A commercial opportunity
or just an awareness of climate change?
(Professor Acres) The perceivedwell,
because it is driven by climate change and people looking at whether
we are going to meet the 2010 or whatever and some people are
saying we are not unless we do this, and then they look at transport
and things, do something in transport. So that I believe is driving
it and it is creating a considerable amount of interest in this
area. Almost to the point where we cannot cope with it.
173. How are UMIST faring?
(Professor Strbac) In the area of climate
change, we have been involved in a relatively small number of
directly funded projects and I would perhaps single out a very
successful collaboration which is still going on with Regenesys,
which is a fuel cell based storage technology. We have been working
on problems associated with quantifying the value of the storage,
in particular relating to enabling larger amounts of renewable
generation to be connected to the UK power system.
(Professor Graham) I had support from Howdens in Scotland
but while they were supporting me they pulled out of wind energy,
pulled out of the whole area. More recently I also had support
from the Wind Energy Group who again, while they were just about
to support me, were bought by a Danish company which is their
position now. These two companies were effectively the two players
in the UK. Since then, through EC-funded projects, I have worked
in collaboration, it is very sad to say, with Danish companies,
for example with Bonus Energy. The wave energy and tidal energy,
of course, are not in a position where there is any industry as
174. Could one of you just say, do you think
that industrial collaboration actually helps you to pick up public
money to help you?
(Professor Graham) Yes, it absolutely
(Professor Strbac) Fundamentally important.
175. And of course the existence of public money
in your programmes will enable you also to attract industrial
collaboration. It is chicken and egg, is it not?
(Professor Strbac) Yes.
176. What problems have you encountered in getting
your ideas to the market place, commercialising your ideas? Or
are you not that far down your research yet?
(Professor Acres) With a sort of industry
perspective, until very recently, as I said before, there is a
lot more interest from overseas than there is from the UK, but
it appears to be changing. There is a lot interest from venture
capitalists in the City now in investing in fairly long-term ideas.
But of course you need to have a base to do that. You have almost
got to have the concepts of a new product, or even a new business,
to get industry and, not least of all, the venture capitalists
involved. So you are back to the research, the funding for the
research effort for the ideas to start the whole thing off, otherwise
they have got no prospect.
177. There is a general picture of shrinking
investment in R & D by the energy industry in the UK. What
is your view of the current situation, not only on the level of
research, amount of research they are doing, but are they investing
it in the right areas? It is obviously something of a curate's
egg, but has anyone got any views?
(Professor Acres) I think what has happened
is that investing in what I might describe as the traditional
energy areas, and that includes transport, more particularly stationary
power generation, tailed off for one reason or another. The technology
got mature. Then, of course, established industry, picking up
new areas like, dare I mention it, fuel cells, they take a bit
of time to realise that that is an area that may be is for their
medium to long term. If I mention Rolls Royce, for instance, that
is something you may know, they have had an extensive fuel cell
programme because they see a fuel cell as an energy producing
device. But other companies, who some of us expected to get involved
in this area early on, have almost taken the role "Well,
when you want to place an order for this or that, come to us".
Well, of course, you do not get to that point very fast. So it
is a balance between the traditional industries maturing and the
newer energy industries, like renewables, starting to take hold.
And catalysing that change, I think is one of the jobs for Government.
178. It does not sound impressively hopeful at
(Professor Graham) I have a comment from
the area I work in and there may not be uniformity, I think, in
the comments about this, but I feel that certainly in the wind
energy industry, although it is the one that you could say has
developed most in the UK, industrial partners still see it as
very risky. I think all of renewables is seen, from one viewpoint
or another, (even PV for example, whether there is going to be
a market in the UK or not) as extremely risky without some form
of government stimulation, which has been so successful in DenmarkDenmark
has a really first class programme of developing wind energy.
They have got less resource than we have, considerably less resource,
and yet we have no industry now. But the industry has got to feel
there is some sort of security of stimulation of a programme that
is going to continue over the years. I think that in this country
now, probably we would have stimulated the industry correctly,
but of course we lost it and it is too late to do anything about
179. Can I ask Professor Strbac specifically
about distribution. For one reason, our resource does not match
the grid infrastructure and I note that the grid companies spend
virtually nothing on R & D. So can you tell us, Professor
Strbac, how you feel about R & D, both in addressing the mismatch
and problems of power losses etc. between offshore energy resources
and the consumer? And what you feel that the distributors need
to do to facilitate the greater development of imbedded, distributed
sources of generation?
(Professor Strbac) Could I just start
with restating the fact that the industry was privatised in 1990
and that there is no doubt that over the last 10 to 12 years that
the industry has been under tremendous pressure in terms of reducing
costs and the focus on short term has been very obvious. And the
difficulties in supporting research have been very obvious in
that context. We can elaborate on that, but regarding the future
development, we would like to see the UK meeting the government
targets, both 2010 and 2030 regarding the PIU Report, and that
really requires strategic thinking. It is very difficult to see
how industry, which is allowed only to invest in areas where they
are in breach of security standards, how we can look at the overall
picture in a global holistic way when we need to have a view of
significantly longer term rather than next price control, which
is what the companies are generally concerned about, which is,
at most, five years. As you rightly pointed out, with the resources
being present in the North of England and in Scotland, primarily
offshore wind, which is obviously an enormously significant resource,
I have been working over the summer on quantifying the costs of
meeting government targets to the industry. And one of the scenarios
would require significantif we are to benefit from offshore
wind, particularly North of England, Scotland, a major reinforcement
of UK GB transmission system would be required. Without that vision,
it is very difficult to see howif the regulation continues
to be focused only on short term and primarily focused on economics,
not having a strong sustainability angle to it, I find it difficult
to see how we would develop the UK infrastructure in a meaningful
way, in an optimal way, to be able to benefit from these resources.
I am encouraged to see that there are some changes in regulation
now. There is significant emphasis on innovation. It seems that
Ofgem is becoming more committed towards allowing companies to
spend on R & D. We work with a certain national grid company,
who owns and operates Transmission Network of England and Wales
with Scottish Power, Scottish and Southern, with a number of distribution
companies, but the funds they have got available for long-term
research are pretty limited and they are shrinking constantly.
We see that happen on the ground. So we would very much welcome
some sort of coordinated approach where the sustainability agenda
is clearly present within the regulation so that companies are
actually allowed to do research and maybe, you know, fail innot
fail in terms of mismanaging the funds, but research is a speculative
area and you may not get always positive answers from that research.