Examination of Witnesses (Questions 60-79)
DEPARTMENT OF
TRADE AND
INDUSTRY
21 FEBRUARY 2005
Q60 Mr Davidson: So you realised
in 1997-98 that the target was not going to be met.
Sir Robin Young: Yes.
Q61 Mr Davidson: Do you think adequate
corrective action was taken at that stage to get you as close
to the target as possible or were there other steps which could
have been taken which would have got you closer to the target?
Sir Robin Young: It is clear that
the earlier we could have introduced what we now know to be the
Renewables Obligation arrangements, the quicker we would have
accelerated. We wanted to consult the sectors really very carefully
about how to draw up this renewables obligation arrangement. If
we had produced it earlier, we would have accelerated earlier.
Q62 Mr Davidson: So that is a yes
then, is it?
Sir Robin Young: It took two or
three years to get the right arrangements. This is a very new
experimental sector. It is not straightforward at all and nowhere
else in the country is doing it. Nowhere else in the world is
accelerating—
Q63 Mr Davidson: Why is our level
of renewable generation only half the European average?
Sir Robin Young: In part it is
because the United Kingdom has such good resources in coal, oil
and gas that there was not such pressure on us to find alternative
sources, is the truth. There is now pressure on us as we are becoming
net importers of energy, subject to the nuclear argument which
Mrs Browning referred to. Other than that there was not the pressure
on us to find renewable ways of doing it as there was in other
countries which did not have their own resources.
Q64 Mr Davidson: In terms of pricing
in other European countries which have higher levels of renewable
generation, are their prices higher than ours? Can we anticipate,
if there is a harmonisation in terms of percentage of renewables,
that the prices will go up still further?
Sir Robin Young: I do not know
the answer to that question. I do not know whether Mr Collins
does.
Mr Collins: What it is true to
say is that any support scheme to support renewable energy anywhere
in the EU will add to the cost to consumers. It is clear from
schemes which have been operating in countries such as Germany
and Denmark, that that does come at a cost.
Q65 Mr Davidson: Are energy costs
in Europe generally higher than they are here?
Mr Collins: There is a broad range
and I do not know personally the position in the UK.
Q66 Mr Davidson: That has the merit
of clarity. How can using lottery money be justified for something
which is clearly a government strategy?
Sir Robin Young: Lottery money
is used for the most innovation heavy and furthest from the market
products, just as it is used for other new inventions.
Q67 Mr Davidson: Tell me what other
new inventions lottery money is used for.
Sir Robin Young: There is a whole
lottery stream under NESTA. What does NESTA stand for? I have
forgotten and my previous job was in DCMS, as you recall. Under
the New Opportunities Fund and NESTA there was a great strand
of lottery money for new inventions[1].
Q68 Mr Davidson: Is that within the context
of what the lottery was originally sold to the public as being
for?
Sir Robin Young: It was a shift
from the original lottery projects. In the first four years of
this administration the new opportunities fund was introduced
to shift the base somewhat.
Q69 Mr Davidson: So you accept that
it was a departure.
Sir Robin Young: It was a departure.
Q70 Mr Davidson: I remember voting
on the lottery and what the money was for, but it was not this.
Sir Robin Young: You were voting
for a departure into a wider spread from the old sports, art and
charities. Then the new government produced the New Opportunities
Fund.
Q71 Mr Davidson: What prospect is
there of these new technologies ever being viable without public
subsidy?
Sir Robin Young: That is the key
question. We are absolutely clear and the Report is clear that
at the moment they need public subsidy and they need it in varying
degrees. At one stage large hydro plants might have needed public
subsidy but, as the report says, we judge they do not need it
now. There are cases of people coming off subsidy, but at the
moment all these—
Q72 Mr Davidson: Do you have a target
date when some of these areas will no longer be requiring public
subsidy?
Sir Robin Young: The renewable
obligation takes us through to 2027, after which time it will
be interesting to see whether the cost of building a renewable
plant—
Q73 Mr Davidson: It will be interesting.
That is what I am trying to get from you as an answer, as to whether
or not we can expect—
Sir Robin Young: We are two years
in with this one. This is really highly experimental, we are reviewing
it later this year, but this is very, very early days of this
particular arrangement for subsidising, incentivising and encouraging
renewables.
Q74 Mr Davidson: Do you think the
Department is winning the battle against Nimbyism?
Sir Robin Young: If the Report
is right—if it is right—that two thirds of people
are happy to have onshore wind in their back yard, then that would
suggest yes, but I do not know whether that figure is accurate.
It sounds as though it might not be in parts of the south-west
of England.
Q75 Mr Davidson: It sounds a bit
like people being willing to use mobile phones themselves and
being willing to have a mast in somebody else's back yard.
Sir Robin Young: Yes, or pay higher
taxes for something.
Q76 Mr Davidson: Indeed. May I just
clarify whether or not, in terms of joined-up government, you
have been speaking to those who deal with farmers? Now that farmers
get huge amounts of money for nothing, do we have any suggestion
or discussion about the prospect of these things being brought
together and that as part of the price of receiving all this money
for nothing, farmers should be willing for more money to see renewable
energy sources sited on their land.
Sir Robin Young: I do not know
the answer to that question. Do you? Have we discussed whether
farmers get encouraged as a condition of taking the new CAP? Should
they be encouraged to have some onshore—
Q77 Mr Davidson: Thank you. I do
not know whether you are looking for a job as a translator when
you leave here.
Sir Robin Young: All jobs welcome.
Mr Collins: It was a question
I really did not expect.
Q78 Mr Davidson: That is possibly
why it was passed to you.
Mr Collins: I really do not know
the position on the CAP. There is a DEFRA scheme to support farmers
in the planting of energy crops and that is a biomass form of
energy and we do see that as a growing and important part of our
renewable energy mix. I am not aware of any links between farmers
and onshore wind.
Q79 Mr Williams: How can you justify
that at £30 per megawatt hour some of the technologies are
getting vastly greater profits than they need in order to be viable
business projects?
Sir Robin Young: The justification
is that had the arrangements we produced, taken altogether, been
less generous we would have been less likely to hit the 2010 target.
It was a judgment call as to how generous to be and we have an
extremely challenging target.
1 NESTA stands for the National Endownment for Science,
Technology and the Arts. Back
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