Examinatin of Witnesses (Questions 160-179)
SIR BEN
GILL AND
MR DAVID
CLAYTON
19 APRIL 2006
Q160 David Taylor: One brief and
final point which ends my section, Chairman. The Renewable Energy
Association—and I know you will recognise this quote—told
us, and they will have said similar things to you, that the Bioenergy
Capital Grant Scheme has "failed to contribute either to
the advancement of biomass generation technology or the development
of a biomass supply chain". Both of those areas are things
that concern me because of local examples particularly. Do you
agree with that observation? It would suggest that you do from
some of your earlier remarks. How does what you are suggesting
address the problems that they identify?
Sir Ben Gill: First, the point
is this. To compare what has happened with the Capital Grant Scheme
two, three and four years ago with where we are today, because
of the economics, is not a fair comparison. We were moving into
the new scenario and we wanted to take account of this changed
dynamic. Second, I think it is unfair to say that nothing is happening.
It has happened where you have had entrepreneurs. You have in
Oakham, in the Rural Energy Trust, a shining example of one individual,
Richard Harvey, who has taken the subject on and driven this forward
and, with the use of grants, is promoting the use of biomass systems
and continues to do so very effectively as a shining light in
the years to follow.
Q161 Chairman: Could I just ask for
some clarification, because there is one item that is confusing
me and I have been searching for the references in the report.
You mentioned a moment ago that within the grant scheme there
should be some recognition of the value of the carbon saved. In
paragraph 2.2 on page 18 you make a case for intervention and
you talk about what is described as the "social cost of carbon
current within Whitehall", and you quote a range from £35.00
to £140.00 per tonne of carbon, and, if I remember rightly,
somewhere else in the report you also comment about what the Emissions
Trading Scheme (within the UK) prices come in at and what the
prices for the same scheme in Europe come in at; so we end up
with three or four different prices of carbon. I have to say,
I am now completely confused. How do you derive a value for the
carbon and what does this term "the social cost of carbon"
actually encompass?
Sir Ben Gill: I can further add
to your confusion by pointing out that some people talk in terms
of carbon, some people talk in terms of carbon dioxide. If I remember
rightly, the Emissions Trading Scheme, the EU Emissions Trading
Scheme, is based in carbon dioxide, and, of course, carbon dioxide
is 44 units of atomic weight to carbon's 12. You have to multiply
the carbon value by 44 twelfths to get that; so you get a different
set of figures. The attribution of value to tonnes of carbon is
very much a social economic calculation, and there have been a
variety of experts who have come up with figures for that. Perhaps
the most noticeable one was about four years ago when they came
up with a base figure of £70 per tonne of carbon which would
then inflate with each year's inflation. This is very nebulous.
What we then looked at was the cost of the various schemes by
looking at the element of subsidy going into it. If you look at,
say, the cost of ROCs, and I believe you have looked at some of
that, and certainly the Environmental Audit Committee has looked
at that, that would suggest a figure rather in the order of £270
per tonne of carbon as the transfer figure cost in there. If you
look at what we are suggesting in terms of the Capital Grant Scheme
and you put that on tonnes of carbon saved, given a particular
scenario, we could be achieving carbon savings there for as low
a cost as £20 per tonne of carbon. The variations in value
per tonne of carbon depend on what system you are using and what
assumptions you are using.
Chairman: I think we are going to have
to probe this with those in Government who have set these prices:
because it is often quoted that investment decisions in the energy
scenario forward from now will depend upon what the price of carbon
is but, I have to say, I am still fuzzy, and it is a failure on
my part to fully understand how this money value has been put,
particularly when a term like the "social cost of carbon"
has been put forward.
Q162 Lynne Jones: As to the amount
of investment that is needed, you said that you were hopeful that
the Government would accept your recommendations, but you were
recommending grants. You said that the cost of your recommendations
would be 10 to 20 million pounds a year and you were talking about
a five-year programme with a review after four, whereas the Budget
announcement was just £10-15 million over two years, and
I cannot imagine there is going to be any extra money. Can I put
that in context? We had some evidence from Jeremy Woods from Imperial
College that if you wanted to supply 10% of the heat market you
would need 200,000 50 kilowatt units over 10 years, which would
cost about £85 million a year. Obviously, once you had got
the programme going, you would hope that the economies of scale
would bring the cost down, but does it not demonstrate the Government's
response is rather pathetic at the moment?
Sir Ben Gill: There are two elements
to this. Firstly, when we set that figure over the five-year period
per annum, if you look at what we have done, we have not put a
linear take-up on the technologies. We believe it will be slower
in the first part through to 2010 and then the rate of take-up
will be greater, and we think it will be double, so it is back-end
loaded in that sense. Second, Defra informed me that there have
been some problems with the EU state aids, and so, whereas we
have worked on 40% of the total capital cost, the EU state aids
registration has restrained them to 40% of the margin of additional
cost over what it would be as a base figure. Therefore, if you
have a gas boiler you have to put a biomass boiler in, and that
is down to state regulation. In that sense there is a variation
from what we recommended because we were advised that is the EU
state aid law.
Mr Clayton: Chairman, just to
clarify, the £10-15 million for two years, I understand that
actually relates to a five-year scheme but the spending rounds
mean that there can only be a commitment for the first two of
those years, but there is an expectation that there will be an
issue of funding for at least a period of three years.
Q163 Chairman: Can I clarify one
other little point. When I asked my initial questions about the
nature of the policy in this area what do you think the Government's
objective is in giving support to the sector? Is it some reference
to energy security, is it dominated by climate change or is it
a bit of both?
Sir Ben Gill: One does not speak
for Government, Chairman. You must not ask me to do that. They
must speak for themselves.
Q164 Chairman: Do you get the sense
from having discussed it with Whitehall, in inverted commas?
Sir Ben Gill: The arguments I
deployed were climate change is to me an overarching issue that
transcends everything. As a farmer, someone who works on the land,
I am concerned when I see different climatic factors, not only
on my own land but you have just got to look around to see all
the different factors that are hitting us every day when you look
at the floods in central Europe again this year, and they had
them, if you remember, in the last two weeks of August last year:
if you look at the drought in southern Europe, if you look at
the drought in Kent, the south coast, if you look at the problems
just last week in China where the Gobi Desert again took up sand
and moved it a thousand miles, and you can go on and on. These
things have to be tackled and we need to tackle them now, but
that in itself stands as one argument. Even if that was not the
argument, I think there is a very strong argument on energy security
that we need to use sensibly the raw materials we have. To go
back to the point I made earlier, it is just plain crass stupid
the way we use our raw materials. We waste as much heat as we
could use. We make the point in here in terms of reclaimed timber;
we are currently putting into landfill four to five million tonnes
per annum. That is the equivalent to the output from half a million
hectares of land that we are putting into landfill and when we
know landfill is struggling because the rules have got in the
way. The incentives are perverse. This needs to change. Look at
the hiatus there was last autumn about tallow. It was classified
as waste under the Animals By-products Directive and then, because
it had been put in there, I suspect without anyone realising what
that meant to the Waste Incineration Directive, we had to classify
it is a waste product. It got out of the system. We could not
burn it sensibly. All these things need bringing together, and
energy security becomes a very important issue, not least because
we are at the end of the gas pipeline and we are not self-sufficient
in gas any more.
Q165 Mr Drew: I have a new obsession,
one of many, as some of you will know, that we ought to be turning
the heat down in some of our buildings, because our response to
global warming has always seemed to be to put the central heating
up a little bit more. I was a bit taken aback, slightly tangential
to the link within the Renewable Heat Obligation, that you did
not think very much of it. To paraphrase the argument, you saw
it as rather complicated and long-winded, plus you saw the pressure
on the supplier rather than the purchaser. It is a bit depressing
in the sense that I think that we completely underestimate, as
you have already said in some of your initial remarks, that we
do not do enough with heat. It is terrible when people are cold,
but we are not cold. Global warming means we should be turning
everything off at an earlier and earlier date and we could save
some of this energy and try and do something with the heat that
we have got to be much more creative. Is there any chance that
you might rethink your objection and opposition to the Renewable
Heat Obligation?
Sir Ben Gill: Like you, I have
an obsession also with turning room temperatures down. I take
my jacket off in here because it is actually too hot in this room,
it is ridiculously hot, but I would cancel one thought. Global
warming does not necessarily mean that Britain will get warmer.
We have to remember that we are on the same line of latitude as
Quebec, and Quebec regularly has winter temperatures, I think,
(and I hesitate with the Canadian High Commission behind me and
staring in my back) of -20 degrees C and -25 degrees C, which
we still have not experienced on a regular basis in the UK; so
it may mean that we get colder weather, but that is immaterial
to the point. I also have a thing about bottled water, but I will
not go into that. I am very keen to have tap water and seek to
change that policy wherever possible. I notice that you have bottled
water in this revered place. In that sense I agree with you on
the terms of turning temperatures down. It is amazing, if you
look at it in any establishment, just turning thermostats down
one degree centigrade can have quite a dramatic effect. Interesting
also is when we went to Sweden (and we talked to them there because
they had taken the decision a decade ago, if I remember correctly,
to put a tax on heat from fossil fuels which meant that the good
residents of Sweden for 10 years have been paying four pence per
kilowatt hour for heat) I said: "How do you cope with fuel
poverty?" given that they have a colder climate than us already.
They said, "What? Would you explain what this concept of
`fuel poverty' is? We do not have it." Of course the reason
they do not have it is because they have had proper building regulations,
proper building standards put in place and properly implemented
for some considerable time, and they recognise the fact that each
one of you is like a kilowatt bar on your heater with a little
bit of variation depending upon your body mass, and if you put
a dozen of you in here, that is 12 kilowatt bars. These are all
heat factors that can be done. We did visit BedZED[1]
in southern London, which sought to demonstrate that you need
no heating in a room with insulation. You can do much better in
that scenario. On the renewable heat topic, the fundamental difference
between heat and electricity is that in electricity alone the
conversion efficiencies—if you are doing electricity at
best it is 35% efficient and at worst 25% efficient—leave
a producer revenue deficiency compared to heat alone or heat and
power together, even with the prices we have got today, whereas
with heat, as I have already said, there is no revenue deficiency.
I am well aware of some entrepreneurs who are selling not biomass
but megawatts of heat that has come from biomass that are deriving
a very realistic market price that is superior in return per hectare
in terms of virgin crops to wheat at this time. Given that is
the case and given, for example, that even in some boilers you
could burn wheat to create heat, and if you take the energy content
of wheat and you equate that across to the energy content, say,
of burning oil (and I have to admit I have not filled mine up
in the last couple of months but I think the last time my wife
filled it up in her property it was 37 pence a litre), that would
give you a price for your feed wheat, on a revenue basis, in excess
of £120 per dry matter tonne. I have recently sold my wheat
from last year's harvest at £71 a tonne. That is the difference
in the revenue. The point I have made to many people in the farming
community is that farmers above anybody else know the problems
that have been derived by complex subsidy systems. We are just
getting out of that with a decoupled CAP. We do not want to get
back into it again when there is a market system there that will
deliver a sustainable business in its own right.
Q166 Mr Drew: What happens if everybody
starts producing heat? That is the danger, is it not?
Sir Ben Gill: No, I do not think
it is a danger because the real situation with energy security
and energy demand is such that we are going to need to use every
opportunity we can, every source of energy, and if you look at
the various demands for biofuels or for electricity and for heat,
anything we can do to reduce our dependence on gas, which peaked
at over 200 pence a therm recently, that is putting industry way
out on a limb. If you look at it, the security that can be delivered
from a sustainable source of biomass is far greater. If anything,
we have suffered in this country from a problem that in the early
part of this millennium, in the early part of this decade, the
end of the last decade, energy prices were far too low because
we had North Sea reserves and we abused that. Those countries
that have had higher prices for energy have sought to diversify
and have been sheltered from it. If you look at the EU statistics,
for example, for 2003, the average domestic price of electricity
in Germany for 2003 was 10 pence per kilowatt hour. We have only
just got there, and it was less than half that in 2003 in Britain.
Q167 Mr Drew: Are you not a bit timid
then? I know this is not necessarily directly relevant to heat,
but what you have said about the building regulations, again it
was not necessarily in your brief, but I would entirely concede
the point that you have made that we are so neutral in our approach
to the way in which we expect developers to do good things, whereas
we all know that if every new housing development was made energy
efficient and was actually forced to use heat by local heating
schemes rather than some of the completely mad ways in which we
still expect each house to be an island in terms of its own heating
provision, that would drive biomass production forward quicker
than anything else, would it not?
Sir Ben Gill: I would not disagree
with that. I think you have almost answered the point yourself,
David, that the terms of the remit of the Biomass Task Force did
not go into that aspect. I strayed outside my grounds in a number
of ways, and I did in fact also write a side-letter on a number
of issues outside the technical remit of the group to the Chancellor,
to the Secretary of State for Trade and Industry and the Secretary
of State for the Environment, Food and Rural Affairs. One of the
issues I raised was the subject of district heating or communal
heating schemes, because they strike me as so much more efficient.
We came across one example of a 2,000 house new estate in which
the developer, through ignorance, specified that each house should
have individual gas-fired central heating. The total capacity
of the individual gas boilers put in was 23 megawatts, the maximum
gas uptake measured was two megawatts; so you have an over capitalised
investment of 21 megawatts. But go a stage further—and this
comes back to joined up thinking—you could have put one
central heating facility in, over spec it by 50% at three megawatts
and you would still save 20 megawatts of capital expenditure.
The cost of laying in the pipe work when you are putting in pipes
for new houses for electricity and water is minimal in any case.
People put up barriers. They say, "Oh, the cost of meters."
I am saying you do not need meters. If they are new houses, you
build to the proper specification and you can estimate pretty
accurately what the heat demand will be. Just as you have a water
charge, you have a heat charge perhaps. Then think of something
else. Think of the fact that 2,000 houses, if they are on gas,
each boiler for true safety reasons has to be inspected every
year. Two thousand times £67.00 per year is £134,000.
But, even further than that, one of the companies that did the
inspection told me that on average they spent a further £400
per house on 10% of the houses just getting access because people
were not there (repeat visits). 10% of 2,000 is 200 times 400,
is another £80,000. Therefore, the cost of maintaining all
those boilers is in excess of £200,000 a year. You could
pay a pretty good engineer full-time to look after one boiler
for that. What we saw in Sweden was one engineer looking at, I
think it was, 36 different heating schemes using remote telemetry,
and one other benefit. Imagine the scenario: in the middle of
winter, the cold snap we have postulated happening, the first
time you notice the heating is not working is when you wake up
in the morning, and, then, with two parents working, "Who
is going to stay at home for the boiler engineer?" who does
not come. If you have got a district heating scheme, as we saw
in Sweden, by remote telemetry the man has fixed it before you
even wake up. Nobody joins this together: because the developer
is not worried about the running costs and conceptually it is
not seen as convenient. This is why information, the removal of
ignorance, is actually at the core of our thinking about renewability,
sustainability, energy efficiency and the use of biomass in particular.
Q168 David Lepper: You have just
talked again about the lack of joined-up thinking and you began
by commenting on that. I am asking to you to speculate on the
response from the Government next week. Do you think there is
likely to be anything in the response which you feel goes some
way towards remedying that lack of joined-upness, or would you
prefer not to answer that?
Sir Ben Gill: I am hopeful that
there will be some indications that we can start persuading the
councils to look at targets for renewable applications. I have
to say, from my own personal business front I have had some frustrations.
I was recently involved in a planning application where I wanted
to put biomass heating in and we put the whole sustainability
issue at the top at considerable additional expense and the council
were not interested, which I thought was quite despicable. That
is not the same of all councils—there are variations, some
councils are quite good—but trying to bring all the councils
together and understand renewability is an issue in itself, and,
no matter what government does, essentially it is the issue of
taking the horse to water and you cannot make it drink necessarily.
It is getting the awareness up and getting examples, which is
why we think perhaps the most constructive example is for central
government, the biggest owner of building stock in the country,
to lead by example. They have said in the 2003 Energy White Paper
they would do that. They have yet to do it. They have a massive
school build programme, they have a significant hospital programme;
so we would make two suggestions: (1) in the school build programme
why do they not put in biomass boilers, and then the parents,
who are the most susceptible part of the population who may think
that biomass is dirty, inconvenient, inconsistent and unsustainable,
would see that it works and the head teacher does not have to
go down, as one person suggested to me, and stoke the boiler every
half hour and get his or her hands dirty, but you demonstrate
it; and (2) why do we not turn on its head the concept of hospitals'
energy supply, hospitals that interestingly have a pretty steady
heat and power load 365 days a year? The heat may be reverse heat
in the summer, so you can use reverse heat to cool, and put in
combined heat and power plants in the hospitals and use the grid
as the back up, which in some parts of the country is probably
more secure. Woking Council, for example, told me that they had
had eight power failures in their town centres last year, or they
would have done, but, because they had their own the CHP facilities,
there was no power failure; so there is a benefit to it. Those
CHP units, given the technologies that are emerging using gasification
processes, could be quite safely part-fuelled on the hospital's
own clinical waste, which saves transporting it, and you suddenly
turn clinical waste, which currently has a gate fee for disposal
of £200 a tonne, into something that could have a value and
you turn the economics round. It is a win, win, win potentially.
Q169 David Lepper: So we go way beyond
the old dichotomy we have seen so often in this country between
Defra's approach and the DTI's approach. You are talking about
a far wider remit of Government departments?
Sir Ben Gill: It is Defra, it
is DTI, it is ODPM, it is Department for Transport. I have to
say we have found the Department for Education very positive and
very supportive given the financial constraints, but they did
not come down to the regions and we did spend a lot of time talking
to the regional development agencies and, in the main, we did
engage them quite sustainably in what they are thinking; but again
you get mixed messages in the counties. We did come across some
counties where you could almost see what had happened. The county
officer thought: "This is an important issue. What should
we do? I know; we will appoint somebody to oversee this."
What happens? You are asking somebody to be a "jack of all
trades", and you, Chairman, highlighted at the start that
they cannot master all those details. It is impossible. What happens
is that they get confused messages coming out to the people who
are thinking about it and the whole system fails. That is why
we want something simple, quick, efficient and clear-cut in what
we all want.
Q170 David Lepper: David Drew has
asked about the renewable heating issue already, but before we
leave that completely and taking up your comment just now that
we need something that, among other qualities, is quick, one of
the reasons why I think your Task Force did not go with the idea
of the Renewables Heat Obligation is that you were saying, in
effect, the time is too short to prepare and implement in view
of the need to tackle climate change urgently. I think the Royal
Commission on Environmental Pollution did suggest that the Renewable
Heat Obligation would be something worth considering; so does
the Renewable Energy Association. They are calling for an analysis
of the feasibility of such a thing. Do you think there is any
point in spending time on that?
Sir Ben Gill: At the launch of
our report two representatives of the Royal Commission on Environmental
Pollution were studying attendance, and they actually spoke—they
reported of their own volition, I did not ask them to—and
made the point that since they had published their report, which
predated ours, I think, by 18 months, the economic dynamics that
I have talked about already had changed so dramatically. They
recognised that things had changed and they accepted the point
that we made, and I think this is the point. We have to recognise
that we need to join up all the various bits. I am still amazed,
as I go round the country talking to groups, that people are surprised
that they have not picked up on what has happened as a consequence
of the dramatic rise in oil and gas prices (and nobody is forcing
that), not helped, I must say, by the DTI at times insisting that
contractors who do studies for them do it on the basis that by
2010 gas prices will be back down to where they were a year ago.
Mr Clayton: The need for legislation
for a renewable heat obligation would inevitably mean at least
two to three years before a system could be put in place, and
one of the things that the Task Force had in mind was that the
biomass sector really had suffered from almost a turn-on/turn-off
approach from government and therefore they did not really want
to see that sort of delay built into any future development.
Q171 James Duddridge: I am a little
bit confused. I was going to ask about how to reduce capital costs
for bioenergy, but you seem to be saying they are already quite
cheap. I am confused because the Renewable Energy Association
said that, whilst on a field by field comparison to fossil fuels
biomass is competitive, however, owing to the immaturity of the
market, capital costs are still nearly three times those of fossil
fuel alternatives. I would appreciate it if you could clarify
that and also touch on why investors are not recognising the economic
impact longer term?
Sir Ben Gill: I am sorry if I
have given you the impression I believe that capital costs are
cheap. Capital costs are greater than gas or an oil boiler, and
some of that is in related kit, although that need not be as dramatically—
Q172 James Duddridge: You are talking
£15,000 for a city academy, which in the greater scheme of
things is not a lot.
Sir Ben Gill: No, but it is a
factor. Remember that when people are building in quotes of £170,000
quite often, that is a barrier in itself, and when I got to the
bottom of it, I got to the bottom of it by talking to one of the
UK's leading manufacturers in this, and he said, "This is
common place. I have this regularly happening", were his
words to me, because the intermediaries do not understand. If
you are used to dealing with a system, you prefer to deal with
that than going to something new. It is second nature. This is
what happens, so people build in. On a parallel story, we came
across, I think it was, Southampton Council, who had insisted
on a district heating scheme going in. The developer, Barratt,
had resisted it because it did not want to do it, but having done
it found it was cheaper and wanted to do it the next time round
of their own volition. They were resisting it even though there
were figures there that said it worked. That is part of the inertia:
something different. Part of the inertia is, "It is all right
you, Gill, saying you will supply to biomass, but you might not
be there next year. Where are we going to get the supply from?"
We have to tackle that. I think we tackle that by the Government
flagging up front we are going to do this because we are aware
of the point the Chairman has made about climate change and energy
security. We are going to create this demand and we are signalling
that two, three, four years down the road we are going to want
it so there is the market. You go on and produce it. It will not
be a single market supply, it is going to be a diverse market
supply with a mixture of virgin biomass—that is short rotation
coppice, miscanthus, straw—coupled with non-waste biomass.
You could look at aspects of reclaimed pallets, waste timber or
you could go into municipal solid waste, reclaimed fuels, or you
can go into wet wastes. We waste as much food in this country
as we eat. It is a startling statistic, but if we are serious
about sustainability, should we not be able to do something about
that?
Q173 James Duddridge: We will come
to wet waste, if that is okay, later on. If we take the city academies,
I have got this picture of big lorries trundling through with
feed stock for a burner. How have the Danish overcome the associated
transportation costs for biomass and processing costs and what
lessons can we learn from the Danish?
Sir Ben Gill: You are quite right;
biomass does not lend itself to be transported from one end of
the country to the other. That would be nonsensical, although
there are some nonsensical transport practices that go on at the
moment in terms of how we transport coal that is imported from
one side of the country to the other rather than importing into
the right port, but that is another issue. What we need to do
is mirror local supplies with local energy needs and put them
all together, and we recommend in the report that the Government
and the regions in particular should have maps. For example, one
county council I talked to in the south-west, I suggested that
they look at their industrial parks. As a county council they
assess what is the energy need of those industrial parks in terms
of heat and electricity; they then look at what refuse they have
and estimate what is the energy capability of that, what is their
other biomass availability, put the two together and act as facilitator.
They have to deal with the rubbish. They can go into partnership
with the industry perhaps to buy the energy if it wants the energy
and it becomes that much more efficient. You are putting it all
together to develop it in that sense, and so we think that that
is a sensible way to go ahead. I have lost the thread of the question
now.
Q174 James Duddridge: It was about
the Danish example and what can we learn from them?
Sir Ben Gill: I think by siting
the facilities you can get round a lot of them. Remember that
in cities as well there is a base load of arboricultural arisings—these
are tree surgeons' chips—which amount to about half a million
tonnes a year. You have got all sorts of things that you can add
up and put into it. You can do it with municipal waste. It can
be done there. I understand in London in the Lea Valley they are
going to bring wood in on the canal. It is using innovatively.
The better way is to use and generate it nearby. Having said all
that, I think you have to recognise that biomass cannot supply
all the heat in the country, so we use it to teach where it is
best used most efficiently.
Q175 James Duddridge: One last question.
There are issues around people being ignorant of the opportunity
and, second, there are issues around having a long-term security
of feed stock. You seem to be saying that if the Government through
some major project like city academies and through its own efforts
will actually generate a sufficient demand, the public will have
reassurance and come in off the back of that. How much demand
does the Government need to create in order to maintain momentum
for private sector investors to have the security of buying a
Barratt home knowing they are still going to be able to buy this
stuff after five years rather than having to plumb in a new gas
boiler?
Sir Ben Gill: Mr Clayton will
answer the question on Denmark that I forgot to answer the second
time first.
Mr Clayton: I think in Denmark
what was particularly successful was community ownership of schemes
and therefore there was a commitment by the community to see them
work effectively, and that was underpinned by a co-operative approach
from farmers, particularly the feed stock supply, the emphasis
being, as Sir Ben has said, on supply from the local area. Those
two aspects are really what made a success of district heating
in Denmark, set in the wider context where there was the tax on
fossil fuels that subsequently evolved when there was a change
of government and there was some doubt introduced into the market
about the future of the funding schemes. Essentially within Denmark
it was the community ownership of the district heating underpinned
by very strong co-operatives on the local farming side.
Sir Ben Gill: I am sorry, can
you put the question again.
Q176 James Duddridge: The final point
of the question is really how much demand does the Government
need to generate in order to be able to give Joe Public and Barrett
Homes the confidence that there is going to be security of supply?
Sir Ben Gill: We thought there
were two elements: one is clearly in the new-build programme—there
is clearly a very good opportunity there—but, second, we
suggested that, in terms of public buildings, the normal life
expectancy of a central heating boiler is 20 years. Given the
amount of buildings the Government owns and ought to be reviewing
and all the boilers that are up for replacement, they should actively
consider the introduction of a biomass boiler. That is not as
draconian as it sounds. If you take Barnsley Metropolitan Council,
for example, people had all their boilers based on coal, for historical
reasons. They have changed them over to biomass already, and so
it is relatively easy to do. If you are putting in a new biomass
boiler we believed there was an argument—because there could
be if Government wished—that you could have a significant
uptake of the new boilers, and not necessarily one in 20, we think
for economic reasons you could probably accelerate that to one
in 15 and you could have a significant uptake of biomass demand
in government buildings. I have not the figures to hand, but we
could work them out for you.[2]
Q177 James Duddridge: It would be useful
if you could.
Mr Clayton: The issue alongside
that, Chairman, is how much the Government does. There is also
a message that comes from the Government—the point, Chairman,
that you made right at the beginning. The whole list of grant
schemes in the annex really says that the approach has been fragmented.
If alongside the development there is actually that consistent
strategic message from government saying that it wants to develop
biomass energy in all its forms, that is absolutely crucial. Again,
going back to Denmark, part of the success in Denmark was over
a period of probably eight or nine years a very strong consistent
message saying, "We want to develop biomass energy. There
will be this support that goes in to get the industry up and running",
which then subsequently, with the change of government, actually
diluted that message, but the key point is that alongside the
practical development needs to be the strategic message and the
commitment to the development in the longer term.
Q178 Lynne Jones: Can I first of
all ask you, Sir Ben, were you as passionate about these issues
before you were appointed to the Task Force?
Sir Ben Gill: I believe very strongly
in what I am doing. No, I was not. I learnt a lot.
Q179 Lynne Jones: You are a good
example of the education.
Sir Ben Gill: Indeed so. It is
also correct to add that the dynamics of the whole thing changed.
Having said that, I planted my crop of short rotation coppice
nine years ago.
Chairman: I will suspend the committee
for 10 minutes while we go to vote.
The Committee suspended from 4.24 p.m. to 4.40
p.m. for a division in the House
1 Beddington Zero Energy Development Back
2
Ev 86 Back
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