Examination of Witnesses (Questions 620-639)
DR IAN
MASTERS, MR
JAMES ORME,
MR PETER
ULLMAN AND
MR JOE
VERDI
28 MARCH 2006
Q620 Mark Williams: Mr
Verdi, in your submission you have expressed confidence that this
technology would be competitive with other forms of fossil fuel
generation. Have you any financial back-up to that statement?
How long do you think it will take for the technology to be competitive
in that way?
Mr Verdi: We have got back-up
in the sense that we have just under three years' experience of
SeaFlow. We know how much it costs to generate electricity and
the operation and maintenance costs. Our SeaGen installation in
Strangford Loch will be our commercial demonstrator, so that will
say what it says on the label—the costs to generate. With
the economies of scale and building up the array, I would have
thought that by 2010 we would be very comparable to fossil fuels.
It is very difficult to say because fuel costs are rising and
that cross-over may come sooner.
Q621 Chairman: Can we
now turn to Mr Peter Ullman and begin to talk about Tidal Electric
and tidal lagoons? Can you explain briefly how tidal lagoons work?
Mr Ullman: Tidal lagoons are a
form of low-head hydro-electricity, which has been around for
about 130 years. It uses equipment that is conventional; and it
is manufactured by large companies like General Electric, Siemens,
Kvaerner, Voith and so on, and comes performance-guaranteed—that
is the technology risk is taken up by insurance. The way it functions
is that the low-head hydro-electric turbine is installed in an
impoundment structure. It has come to be called a lagoon because
it is a much more descriptive term, but it is a structure built
out of rock, sand, gravel, in a conventional marine construction
fashion. It sits a mile or so offshore, and is self-contained.
It is sometimes called a ring-dike—but it will not be round.
The water at high tide, when the impoundment is empty—there
is a difference in water level. So the power source is the difference
in water level as in a conventional dam. This is different than
a tidal stream in which the power source is essentially the horizontal
movement of the water. The horizontal movement of the water is
irrelevant to this particular technology. What you create with
the impoundment structure is a difference in water level, and
then the difference in water level is harvested—the energy
is harvested by allowing the water from the high level to go into
the low one. Then what you have is a full situation where the
tide drops away to do the opposite; so it is a two-way generation
using conventional low-head hydro-electric.
Q622 Chairman: Can you
give us some examples in the United Kingdom of tidal lagoons?
Mr Ullman: No, there is no tidal
lagoon that has been built in the United Kingdom, or anywhere
else. Tidal power of this sort is most similar to a barrage style
tidal power. Barrages have been around for several thousand years.
The largest tidal barrage is in France; it is a 240 megawatt unit
that was put in service in 1965. It uses similar turbines to the
ones we plan on using. It has functioned since 1965. There have
been some difficulties here and there but it has essentially been
working for 47 years. There is also another one in Canada, a 16
megawatt unit that was installed in 1982 in order to demonstrate
a Swiss turbine. It is a familiar power source, but it has never
been done in the offshore manner that we are planning on doing.
Q623 Chairman: Can you
outline some of the advantages and disadvantages of tidal lagoons?
Mr Ullman: One of the advantages
is similar to the other forms of tidal power, which is that it
produces predictable power. This is key of course because that
is the way the grid functions. It functions on a predictable set
of contracts, and you have to know what you are going to be able
to send when, otherwise you have to be able to back it up. The
second is that it uses conventional equipment. I do not need to
tell you that these other folks have been working on climbing
the technology curve and proving their technology. It is very
important: electricity has to be provided in a reliable and consistent
manner. Quite a lot of money goes into building a power plant
and therefore the risks need to be carefully assessed. This particular
technology, has the advantages that—there is no technology
risk. I personally have seen a low-head hydro-turbine that has
been functioning for 120 years in Sweden. It was built 120 years
ago and construction of this equipment has advanced. The equipment
is reliable; its output is known and the risks are ones that can
be offset. This is important in convincing investors to invest
in a project. It uses no fuel. This is, opposed to some of the
tidal stream devices, a big part of the estuary. There is no getting
around that. In Swansea Bay we are proposing a project that will
be 60 megawatts, and it is 5 square kilometres, which is a significant
part of the area of the Bay. It is by no means the whole area
of the Bay because the Bay itself is many times that, but whenever
you do that, you change things. One of the advantages as well
as the disadvantages is the size. It is a rock structure; it is
natural and will look just like the shoreline. If you have ever
been there at the Mumbles you can see it—not very plainly
but the rocks form the shoreline, and it will look just like that
physically. What happens almost immediately is that small creatures
take up the habitat in there; larger creatures come to dine on
them and so on. It is a new habitat. It is expected that this
will enhance the biodiversity of the area. The inter tidal zone
and the near-shore tidal zone is famously barren; not that there
is nothing that lives there, but there are precious few creatures
there that take up habitat there. Because of the size and the
natural structure of this, it will create a wildlife habitat.
The flip side of that advantage is that because it is big it is
going to change things in the Bay in terms of currents, sediment
transport, and the general flow of traffic in Swansea Bay. That
is why we have Associated British Ports as part of our team, to
assess the sediment and transport issues to make sure that we
are not causing difficulties; one to put sand where it should
not be, or to take sand away from where it should be. It is complex.
Sediment transport is an issue in Swansea Bay as it is. ABP for
example dredges almost every month, and two months do not go by
without them dredging their shipping channel. There are already
complexities therefore. As you probably are aware the Crumlyn
Burroughs is an area threatened by coastal erosion, and so this
is a very careful issue that one needs to go into in great detail.
Another advantage is that in its building we are not doing anything
that has not been done before many times. There are secondary
applications that have been proposed. People have asked us, "Can
you put a wind turbine on top of it? Could you grow mussels inside
of it or lobsters, fish—marina fishing and so on."
Even a bicycle path was proposed in a project that we are looking
at in North Wales. All of those are things that I feel would enhance
the interactivity with the community. However, none of those are
our business. We are marine developers; we are not lobster men
or any of those things. Nevertheless, there are people who live
in those areas that do those things and are interested in the
business opportunity of working with us. We are keen to do that
and have those discussions frequently. The next advantage is the
tourists. Strangely enough, the tidal power plant that I mentioned
in France gets 600,000 visitors a year. I do not know what they
come to see. I have gone to see it myself, and it is not a terribly
exciting trip!
Q624 Chairman: Is that
at St Malo?
Mr Ullman: Yes, St Malo, right.
As I see it, there is not a lot of excitement. I was there when
the lock was working and you could see a boat go through. Nevertheless,
when I was visiting the tidal power plant in Canada there was
a group of 20 engineers from China. Some amount of people are
going to come to look at this because it is unusual, it is new,
it is different. If it goes in first, it will be the first in
the world. Some amount of tourism will occur. In terms of disadvantages,
it is similar to marine current turbines, which is that it is
not always available. It is predictable but not always available.
Q625 Nia Griffith: The
size of it is what is putting some people off. Is there any possibility
that there could be smaller ones developed? The other issue is
where all the material is to come from to build it. Again, people
have talked about tonnes and tonnes that are going to be needed.
Can you address those issues?
Mr Ullman: The size determines
the output. Well, there are two factors—the size, that is
the area covered, and the tidal range. The output is a function
of the square of the tidal range, so the larger the tidal range
the larger the output per unit area. That is a given, by the tides.
Then the area will determine what the multiplier is. It could
be done smaller; however the point of building the first project
is not to prove that low-head hydro-electricity works—we
are not demonstrating that of course because it has been working
for more than a century—but the point of building the first
one is to prove the economics of the technology. The economies
of scale will work in both directions so the smaller you make
it the more expensive the output; and the larger you make it the
less expensive the output. In terms of materials, they will be
acquired from a variety of sites. It is unlikely they will come
from one site. They will all be transported to the site by barge;
none of it will be coming by road or by rail. The contractors
that we are dealing with own their own quarries. Some are in Norway,
some in Spain, and in a variety of locations; but nothing is coming
through Swansea Docks or over rail. Even if one were so insensitive
as to want to do that, the economics of shipping that amount of
material in that fashion are unthinkable and unfavourable.
Q626 Mark Williams: Can
you give us more detail on the tidal lagoon and its potential
as a pump storage facility, and the technology behind that; and
then more generally you spoke a great deal about the technology,
but the extent to which that is commercially available currently.
Mr Ullman: In terms of pump storage,
it is an interesting component of the potential revenue stream
of this project. The way pump storage works is that you use electricity
to pump water up during a time of the day in which electricity
is cheap, like in the middle of the night; but then you generate
during a time when the revenue from electricity is greater. This
is a common practice in North Wales and it is used around the
world to deal with a variety of situations. That is the basic
economics of it. With a tidal lagoon, as I said earlier, the output
is a function of the square of the tidal range. If you had a condition
in which you had just finished generating and it is high tide,
and you pump water into the lagoon, you raise the level by a certain
amount. Let us say, for demonstration purposes, the tidal range
is ten and you pump one, and make the tidal range into eleven.
Then, when you generate you do not have 10, you have 11; so you
get 121, 11 squared, as opposed to 100. The gain is 21% minus
the energy that you use to pump. The energy that you use to pump
tends to be somewhere in the 2-3% range. What you wind up with
is the ability to use pump storage with an efficiency that is
potentially greater than one—there may be some circumstances
in which it is not greater than one—so you make a mechanical
gain; and then when you dispatch it or send it to the grid you
do so at a time in which the revenue is favourable. Therefore,
you can then realise the gain of giving the grid power when it
wants it during tea-time or peak times of the day, and also sending
it more power than you would have available. The second potential
for using pump storage in this fashion is that you can take less
predictable renewables, like wind or wave, and use that as the
source to pump, because you can pump any time. Then, when you
dispatch it, because the tides are so predictable, you can take
unpredictable power and dispatch it as predictable power. Unpredictable
power is considerably less valuable both in terms of revenue and
usefulness to the grid than is predictable power; so in a way
you are helping the wind and wave folks and the grid by pumping
in this fashion. It is commercially available now. We are in the
process for applying for consents for a 60 megawatt unit in Swansea
Bay. We have consulted with 55 different consultees relating to
this, and we are on a pathway to developing this 60 megawatt unit.
Q627 Mark Williams: Do
you share the frustration that your colleagues expressed about
the potential for this? We heard earlier that had the investment
been put into wind power 30 years ago we would have been much
more advanced along that route; but now we are beginning to turn
our sights to schemes you have spoken to us about. Do you share
the frustrations that had research investment gone into these
schemes earlier on we would be that much more advanced now?
Mr Ullman: Let me put my feelings
in context. First, I would like to say that the UK has done a
tremendous amount to support renewable energy in terms of research
and development programmes and so on. I come from a country in
which such an effort has not been made by the federal government.
I will say that 21 of the states of the United States have copied
the UK's renewable obligation, so there is some leadership there.
Then there has been a fairly sizeable amount of money that has
been distributed to renewable source technologies. Tidal Stream
has had £50 million. The offshore wind folks have got £100
million. Money has been given to biomass, poultry litter, a number
of studies and so on. I get very expensive brochures in the mail
about surveys and so on. A fair amount of money has been put into
tackling this problem. I will note that no money has been dedicated
to tidal lagoons; they have been supported exclusively privately.
Q628 Mark Williams: In
that sense you do see yourselves as the junior partners.
Mr Ullman: Well, I like the term
"partner", but "junior" is definitely—we
have had no support from the UK Government in terms of that. In
terms of frustration, it just means you are doing things that
are new and it has not been easy to work on this project here
in the UK in terms of dealing more with DTI than with the rest
of government. The local folks have been tremendously supportive
and enthusiastic and so on. Most of the political world has been
very supportive too. I will say we have had no support from the
DTI.
Q629 Nia Griffith: Do
you see a particular reason why that has been the case? What is
the difference between yourself and the others? Is it that it
is long-term; is it that it is too big? Is there a reason?
Mr Ullman: There may be a reason,
but I do not know what it is. At various times we have been told
that this is a mature technology that does not need support. At
other times we have been told that we have dramatically under-estimated
the cost of the installations—which one would think would
therefore qualify it for getting support. Neither of those is
true. We are doing something that is new. It is difficult to do
new things. The first project is projected to cost £79 million.
I do not have £79 million to convince various private entities
to fund it. We have had success with that, but it is not easy
to do things that are new.
Q630 Nia Griffith: Do
you see it as somewhere where other countries might step in, Spain
for example?
Mr Ullman: I have been at this
a long time, seven years, and after being all over the world,
in Panama, India, China, Canada and all over looking at various
sites, I decided on the UK about seven years ago. Five years went
by and frankly it looked like we were never going to get permission
to proceed and I did start looking at other countries. We are
now active in China, Canada, Mexico and Panama. That said, if
anybody in Wales would like to participate in the manufacturing
process, there are a number of parts and elements that need to
be made for these projects and there is a significant amount of
money involved in these orders, and then we would be glad to work
with somebody who wanted to step forward.
Q631 Mrs James: You have
obviously approached the DTI under section 36 because it is generating
over 50 megawatts. You see the key partners you want to be working
with on development as the DTI. You have gone or permission to
the DTI and you are saying that the log jam seems to be the DTI.
Are there any other options that you have—the Assembly,
WEFO?
Mr Ullman: In terms of consents,
do you mean, or in terms of funding?
Q632 Mrs James: Funding.
Mr Ullman: No, we have given up
looking for public funding. It has been discussed a number of
times and it just does not appear to be available to us. We have
had success in raising the money privately and appear to be on
a positive course to handling this on a commercial basis. This
is not to say that we would turn it down if it were to come our
way, but we do not expect it.
Q633 Mrs James: Dr Masters'
written submission to the Committee stated that there were three
questions that remained unanswered about the technology: the operational
life of the turbines in a flow regime with significant suspended
solids; the effect of silt build-up within the lagoon; neighbourhood
you have touched a little bit on the environmental impact of the
scheme. Can you give us more information on the turbines and the
flow regime?
Mr Ullman: The turbines come performance-guaranteed.
There are roughly 450,000 of them in the world today of different
sizes and different settings. Suspended solids are a common issue;
every river has a certain amount of silt. Some have tremendous
amounts of silt, and some have smaller amounts of silt. It is
an issue, and one designs the turbine for that. It is an important
question and it is a problem if somehow somebody would not think
about that; but of course it is a problem that has been resolved
many times in materials. For example, in France, where they have
the 240 megawatt unit, there are 24 of these turbines that have
been functioning for over 40 years in a similar kind of environment.
Every environment is different, and the environment changes from
day to day, year to year, but in the broad range of this type
of installation that is a good example. As I mentioned, in fresh
water I personally have seen a unit that has lasted for 120 years.
They are pretty durable. They take major maintenance about every
20 years. In regard to silt, as I mentioned, we have hired Associated
British Ports to help us to sort that out because this is a key
issue. I think Dr Masters was probably referring to the siltation
inside the structure.
Dr Masters: Yes.
Mr Ullman: This is a question
I first raised back in the early 1990s at the Yale School of Geology
and Geophysics with Dr Edward Bolton, and we talked about this
at great length. His off-the-cuff response was that with a six-hour
time period in which you are flowing in and then flowing out there
is not enough time for a significant amount of silt to drop out
and therefore it is likely—not a sure thing—that this
will not be an issue. He also advised us on a number of design
elements. Siltation occurs in inverse proportion to the depth
so if you have a very shallow area you will get more siltation
than if you have a deeper area; so we have designed the inside
of the structure to be deep, that is a metre or more of depth
at all times, which would reduce the siltation. Given that the
general calculus is that it is unlikely to be a great amount in
either direction, it still leaves you with the possibility that
you are wrong, and some unusual event happens and silt does get
entrained on the inside. Under those circumstances there are two
solutions, if there is a problem. I do not want to get too technical,
but when you set up any sort of wall inside of this, what you
do is change the flow, and you change the velocity of the flow
in and out of the structure. When you increase the velocity in
a particular direction you will create scouring; so if you have
had too much siltation you aim the velocity at the build-up and
you scour it, and then you can rotate this wall such that you
self-scour the entire structure. That is the likely solution.
In some sort of disaster scenario you can also dredge. The flip
side of this, which people tend not to mention, is the opposite:
what if you scour out too much and start to undermine the soils,
and given that we have thought of that there will be a screen
that is put in place so that that will not happen.
Q634 Mrs James: You talked
about the size being 5 square kilometres. Do you have any major
environmental concerns or awareness of any particular problems
you can draw to our attention?
Mr Ullman: Let me tell you the
problems that people question us about. One is what happens to
a fish that goes through the turbine. Believe me, fish do not
like going through turbines and adult fish are able to sense the
pressure wave whenever you start a flow underwater. They simply
avoid it if they can. If it happens to be an anadromous fish that
has to go from fresh water to salt water, and there is a dam in
the way, there is no avoiding it and therefore they go through.
Of the fish that go through, they do so unhappily but 94% survive.
Because our structure will not be in the way of an anadromous
fish that wants to go from fresh water to the ocean or the ocean
back to the fresh water to spawn, they will simply circumnavigate
it. There is no reason for the sensible fish to go through. Therefore,
if there are a thousand fish coming down the river, all thousand
of them have to go through that turbine. If there are a thousand
fish that encounter our structure, one, two or three might get
suddenly pulled into it, and of those very few fish that get entrained,
94% of them will survive. In terms of biodiversity, there is no
getting around the fact that this is a big structure and will
create a habitat, but in general folks have been pretty upbeat
about that—birds, fish; and fishermen and so on should enjoy
this either as a restaurant or a recreational facility.
Q635 Mrs James: One of
the questions I have been asked about locally is angling o the
surface, people fishing from boats. People have been very, very
concerned about that. Can you set their minds to rest about that?
Mr Ullman: There will be a lot
more fish for them to catch. What is their concern?
Q636 Mrs James: That they
will hit it.
Mr Ullman: Well, they might, and
they will have to watch it for that. I do not know why they would
hit it—if they were wanting to go out and stand on it and
fish—is that it?
Mrs James: No, on a boat. Perhaps you
could write to me about that.
Q637 Nia Griffith: People
in small boats: presumably, this thing will be under the water.
Mr Ullman: It will be quite visible.
It will never be less than a metre visible and it will have navigational
lighting, the same way anything else will have, and various warning
systems.
Q638 Nia Griffith: You
are saying even at high tide it will be visible.
Mr Ullman: Yes.
Q639 Mrs James: Coming
back to costs, how do tidal lagoons compare with other forms of
power generation, particularly the cost of nuclear power stations?
Mr Ullman: We had a number of
studies done on costs. The first study was done in 2002 by AEA
Technology and that was a broad-brush concept study. They came
out with the cost. In 2004 we had this impressive book created
by WS Atkins and Associated British Ports. This was a more specific
study of a 60 megawatt unit installed in Swansea Bay. Their cost
is £79 million for the Swansea Bay project. In terms of comparing
it to other technologies, my expertise does not extend very far
beyond tidal power. However, our financial advisers, NM Rothschild—a
bank that I am sure you are familiar with—did a study of
a variety of ways of looking at costs of power. I believe that
that is in the packet I gave you. This, by the way, was done for
the very severe rise in the cost of natural gas. Nuclear power—I
am afraid I am not an expert, and when the Government owns plants
one tends to not really ask about what the costs are. However,
I can say that in the US where the nuclear power plants are not
government-owned and they are owned by private entities, between
1950 and 1990, $492 billion was spent on nuclear power, of which
$97 billion were subsidies. The cost of power—again in the
US where the playing field is tilted in a slightly different direction—from
that nuclear was 9 cents per kilowatt hour or about 5.1 pence.
The best way to compare this is to compare it with more familiar
other forms of power, and that is about three and a half times
the cost of coal or natural gas.
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