Select Committee on Science and Technology Appendices to the Minutes of Evidence


APPENDIX 3

Memorandum submitted by Prospect

  1.  Prospect is a new trade union, formed by merger of the Institution of Professionals, Managers and Specialists (IPMS) and the Engineers' and Managers' Association (EMA). We represent 105,000 scientific, technical, managerial and specialist staff in the Civil Service and related bodies and major companies. In the energy sector, we represent scientists, engineers and other professional specialist staff in the nuclear industry, the wider electricity supply industry and, increasingly, also in the gas industry. Our members are engaged in operational and technical management, research and development and the establishment and monitoring of safety standards, environmentally and in the workplace. Other members are directly involved in a range of sectors and functions for which environmental issues are of significant professional concern. We are fortunate in being able to draw on their knowledge and expertise to inform our views on key issues relating to energy policy.

  2.  The body of our submission is structured to address the Select Committee's terms of reference. However, we would highlight the following recommendations for action by Government:

    —  Make a clear commitment to stable long-term funding for energy RD&D and resist the temptation either to switch this work on and off or to fragment it to such a degree that more time is spent raising funds and managing the process than actually doing the RD&D.

    —  Increase expenditure on RD&D of renewables, in particular sources that have not been adequately tackled by the private sector. As recommended by the Curry Commission, high priority should also be given to research and technology transfer effort to exploit the opportunities offered by non-food crops.

    —  Involve stakeholders in a comprehensive survey of labour and skills requirements in the energy sector.

    —  Develop a transitional skills strategy for moving to a low carbon economy which provides support both for well-qualified staff at all organisational levels and for lower skilled employees who may lack a portable or adaptable skills base.

    —  Put in place a more transparent structure for the formal co-ordination of energy policy development and implementation across government. The key aim should be to integrate energy and environmental issues into the mainstream of policy-making.

TO EVALUATE THE LEVEL OF EXPENDITURE ON RD&D IN NON-CARBON ENERGY TECHNOLOGIES, BY UK GOVERNMENT, THE RESEARCH COUNCILS, THE CARBON TRUST AND INDUSTRY, AND WHERE IT IS BEING DIRECTED

  3.  The Chief Scientific Adviser's Energy Research Review (ERR) sets a sound basis for this evaluation, and we assume that the Select Committee will also address the priority areas identified by the ERR, including CO2 sequestration, energy efficiency and nuclear power. At present, the Government funds research into nuclear fission only to maintain the safety and reliability of existing Magnox, Sizewell B and AGR power stations. It contributes to fusion research both directly through the UKAEA research programme at Culham and indirectly through EU contributions.

  4.  In particular, we would draw attention to the ERR's recommendations that the Government should ensure that there is a sufficient focus on basic research activities and that expenditure should be brought more into line with that of industrial competitors in Europe. Sustainable and secure energy sources will only be maintained in the long term if appropriate technologies are discovered, tested and developed. Due to the long lead times involved, there is now an urgent need for sustained and increasing government funded research and development. Without such support, the UK will not be able to compete in the growing world market for environmental technologies.

  5.  However, the issue is not simply one of the level of expenditure. Sources and actual recipients of expenditure need to be carefully defined. There is a world of difference between government support for a single company to commercially develop a specific item of energy producing equipment and, say, for a programme of "scaling up" new technology to assess commercial viability in general. Consideration should also be given to where the ownership of intellectual property resides.

  6.  Stability and transparency in funding regimes are also very important. Government must commit to stable long term funding for energy RD&D and resist the temptation either to switch this work on and off or to fragment it to such a degree that scientists and engineers spend their time and fundraisers and managers rather than doing the RD&D required. Lack of transparency in funding streams, and consequent uncertainties about access and eligibility, can also discourage the development of good ideas. Every effort must be made to avoid artificial barriers that discourage involvement. For example, Prospect takes the view that the Carbon Trust and the Energy Savings Trust should work towards integration.

TO IDENTIFY WHICH TECHNOLOGIES ARE, OR SHOULD BE, RECEIVING SUPPORT, AND HOW MUCH INVESTMENT IS DIRECTED AT RESEARCH, DEVELOPMENT AND DEMONSTRATION RESPECTIVELY

  7.  There is a need for increased RD&D of renewables, particularly sources that have not been tackled adequately by the private sector. Production of hydrogen from fossil fuels with CO2 storage could be an attractive transitional strategy to aid the introduction of hydrogen as an energy carrier. This requires attention to be given to large-scale generation of hydrogen and infrastructure development. Tidal streaming and waste bio-fuels are other potentially fruitful areas. The current UK research programme into bio-fuels is under-funded and suffers from the fact that no single government department takes the lead in this area. We strongly agree with the recommendation of the Policy Commission on the Future of Farming that "England needs a long-term strategy for creating and exploiting opportunities in non-food crops, including starch and oils. This area should be a high priority for research and technology transfer effort".

  8.  Equally, in the nuclear sector, RD&D is needed to:

    —  Maintain the UK's position in the world market for decommissioning and clean up. The LMA White Paper accepts the need for a research role in relation to specific applications. It will also be important to support wider R&D on clean up in order to generate novel solutions.

    —  Specify and, if necessary, develop the next generation of nuclear power plants. There are a number of emerging nuclear technologies that the energy market is not structured to support. These include "intrinsically safe" generating technologies in which safety systems depend passively on the physics of the reactor, not actively on the equipment, human designers or operators.

    —  Take forward the potential of nuclear fusion. This poses distinct challenges and major potential prizes for R&D. There has been significant progress over the last decade in both fusion science and fusion technology. Based on this, the International Thermonuclear Experimental Reactor (ITER) has been designed and is ready to be built. We strongly believe that current capability in this sphere must be supported and maintained intact within UKAEA, which is conducting important studies into the safety and environmental impact of fusion. We support recent proposals for a "fast track" fusion programme as substantial investment is needed now so that future generations may benefit.

  9.  We also agree with the Trade and Industry Select Committee that full examination of the international research on carbon storage should be undertaken as part of the process of deciding about the long-term future for coal-fired plant. It is also worth noting that the conclusions of the DTI review of coal-fired electricity generation plant open up positive possibilities for capturing and storing CO2 from coal plant both to reduce its environmental impact and to use it to enhance oil recovery. The projects undertaken as part of the European Commission's Fifth Framework programme cover a range of geological storage options including depleted oil and gas fields as well as deep unmineable coal seams. If successful, these projects should help develop confidence both in the technology and the safety of underground storage of CO2.

TO ASSESS THE SKILLS BASE AND THE STATE OF RD&D FOR DIFFERENT TECHNOLOGIES

  10.  Success in all of these areas is, of course, critically dependent on attracting and retaining high quality research staff. In too many areas currently such staff constitute a precious resource that is being mined without investing for the future. Initiatives in this sphere must take account of the recommendations in Sir Gareth Roberts' review for improvement of the pay, career structures and working experiences of science, engineering and technology research staff. We welcome the Government's acceptance of these recommendations in its strategy for science, engineering and technology "Investing in Innovation". Prospect would also emphasise the need for intelligent customers, both of technology and R&D. Such capability unfortunately cannot be taken for granted. It has already declined in government, due mainly to fragmentation, privatisation and contracting out of scientific and engineering establishments. Equally, the lack of engineers could seriously limit translation of basic research into practical technology.

  11.  We share the concerns of the Energy Future Task Force (EFTF) about the shortfall that is occurring in the number of newly qualified entrants to disciplines of importance to the energy and environment sectors. The Distributed Generation Working Group (DGWG) recognised at its first meeting the need for specific programmes of training to combat skill shortages so that the major opportunities offered by micro-CHP and embedded generation are to be realised. Within the nuclear sector, expertise has been dissipated due to extensive contracting and sub-contracting of work and needs to be pooled within a framework of effective project leadership and organisation. There is still a vibrant fusion research community at UKAEA's Culham Science Centre but a decision to construct ITER outside the UK may well lead to a loss of expertise from the UK programme. A similar seepage has occurred in relation to third party research. In the ESI the age profile of knowledgeable staff is increasing, with very little recruitment of technical staff to replace them. This applies to power engineering in particular. The problem is currently masked to some extent by use of contractors, many of whom are former engineers in the ESI, but their age profile is increasing too. If nothing is done to address this issue, there is a growing risk that knowledge shortfall could seriously degrade the industry's ability to develop.

  12.  We welcomed the PIU's proposal that a comprehensive survey of labour and skills requirements in the energy sector should be undertaken and would wish to be involved in it. There is a detailed job of work to be done as no assumption can be made about inter-changeability of skills, either within an industry or across industries. For example, different skills are required for nuclear fuel design, fuel disposal, safety assessment and shielding. It is also important to take account of experience, especially when moving from demonstration to full-scale operation.

  13.  Transition to a low carbon economy will also have implications for the wider skills base, in particular to maximise the benefits and minimise the costs of change in energy intensive sectors. The approach taken must be forward looking and provide time and support for adjustment not, as in the past, based on post-hoc packages of assistance to deal with the consequences of regional dislocation. It must also focus strongly on quality of employment. Transitional skills strategies must provide support both for well-qualified staff at all organisational levels and for lower skilled employees who may lack a portable or adaptable skills base. The Government should lead an objective, forward-looking analysis of the balance between the positive employment impacts of growth in R&D and renewables against possible negative consequences of contraction in other energy sectors. This should also take account of indirect effects, such as employment implications in the UK of the terms of trade for energy imports. It will clearly make a difference whether this is for manufactured goods or for services.

TO ESTABLISH HOW GOVERNMENT POLICY ON ENERGY RD&D IS FORMULATED, IMPLEMENTED AND EVALUATED, AND THE NATURE OF THE CO-ORDINATION BETWEEN DEPARTMENT, EXTERNAL AGENCIES AND INDUSTRY

  14.  At present, Government policy on energy in general suffers from the lack of a "joined up" approach. Whilst it is reasonably clear how departmental policy is formulated, there is no clear route by which this translates—or fails to translate—into government policy. The scope to improve policy co-ordination in this sphere is plainly apparent and we strongly agree with the Trade and Industry Select Committee that the Government needs to put in place a more transparent structure for the formal co-ordination of energy policy development and implementation across government. However, a carefully managed approach will be needed to achieve the desired objectives. There is already a proliferation of bodies providing advice and assistance on energy matters. There are also dangers of further compartmentalisation and fragmentation, whereas in fact the key challenge is to integrate energy and environmental issues into the mainstream of policy-making.

TO ESTABLISH THE LEVEL OF AND RATIONALE FOR INTERNATIONAL COLLABORATION IN ENERGY RD&D AND HOW PRIORITIES ARE DETERMINED

  15.  International collaboration is particularly appropriate for large, long-term RD&D programmes and those that require a broad coalition of skills and expertise. These include nuclear fusion and CO2 sequestration, where there are already fruitful international partnerships. For example the prestige of working on the Joint European Taurus (JET) project attracted a high quality, wide pool of researchers and engineers. However, there are also risks. As Prospect members have learned from other international projects, such as the Large Hadron Collider, these are both financial and political. For example, fluctuations in exchange rates or a decision by one project partner to withdraw can lead to uncontrolled overspend for remaining partners, threatening either the viability of the project in question or putting other RD&D work at risk. Similar problems are being experienced in relation to fusion research, for which the budget has been cut from 788 million Euros in the Fifth Framework programme to 750 million Euros in the Sixth Framework programme, to take effect from next year. Of this, 200 million Euros has been allocated for the ITER. Overall this amounts to a 30% reduction in the funding allocation, resulting in a need for increased funding from Member States. This may lead to a shortfall in funding for the UK's own research programme.

  16.  There are, of course, also areas in which market competition will predominate. For example, wind farm technology has been primarily developed in Denmark, with the result that Danish firms now control more than half a global market worth £2.5 billion. Unless support is quickly secured in the UK, there may well be a similar loss of tidal power technology to overseas competitors.

TO EXAMINE THE EFFECT ON ENERGY RD&D OF PRIVATISATION, LIBERALISATION, REGULATION AND CHANGES IN OWNERSHIP IN THE SECTOR

  17.  The study recently commissioned by DTI from British Power International includes interesting observations on the consequences of privatisation and changes in ownership structure in the ESI:

    —  Resource constraints may be reached at an earlier phase in emergency situations because of the lower levels of trained people directly employed (or available) during the pre-privatisation period.

    —  The changes to the structure and organisational boundaries of companies mean that there is an increasing reliance on contractual arrangements for the delivery of services, which may be critical during emergencies.

    —  Some companies have in place plans and practices to ensure that future qualified engineers and craft trained people will be available. In others, evidence suggested that plans were less robust. Overall, a recurring theme was concern about the future supply of engineers and craft trained staff. In addition, evidence suggested that the training of key people used by external providers was generally not as rigorous.

    —  Companies based outside the UK hold more than half of distribution licences and three (soon to be two) UK based companies have significant interest overseas. Patterns of ownership, organisational form and access to resources may, in some circumstances, have an effect on the approach to planning, governance and resilience. In our view it is also likely to affect invest priorities.

  18.  As far as research is concerned, it is worth noting that the role of the Buildings Research Establishment has shifted since privatisation. Priorities are now contract-driven and, in common with other privatised research institutes, the relationship with government has become arms-length, curtailing the free exchange of information and advice that existed formerly. Energy efficiency advice and support services are now partitioned into a number of tightly defined contracts, in which the BRE has one just share, with other aspects being handled by another privatised body, AEA Technology. The net effect is to make it much more difficult for organisations to use the services, and in all likelihood many are discouraged from doing so at all.

  19.  The UK's world-leading programme of clean coal R&D was abandoned on privatisation and should be restarted. We agree with the Parliamentary statement made by the Energy Minister in June recognising the importance of clean-coal technology both domestically and in terms of its export potential. "Probably the best thing we could do globally for the environment is to make sure that clean coal is used in countries that are heavily dependent on coal and in most cases on old and dirty technology".

September 2002



 
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