House of COMMONS









Tuesday 7 February 2006





Evidence heard in Public Questions 117 - 214





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Oral Evidence

Taken before the Welsh Affairs Committee

on Tuesday 7 February 2006

Members present

Dr Francis Hywel, in the Chair

Mr Stephen Crabb

David T. C. Davies

Nia Griffith

Mrs Siān C James

Mr Martyn Jones

Jessica Morden


Witnesses: Professor Phil Bowen, Division of Mechanical Engineering and Energy Studies, Cardiff University, Member of the Welsh Development Agency's Energy Centre of Excellence, Professor Dennis Hawkes, Former Director of the Sustainable Environment Research Centre, University of Glamorgan and Mr Kevin Mowbray, Head of Welsh Energy Research Centre Secretariat, Welsh Energy Research Centre, gave evidence.

Q117 Chairman: Good morning and welcome to the Welsh Affairs Committee. Thank you very much for coming today, and thank you for your memorandum. Could I begin by asking you to formally introduce yourselves?

Mr Mowbray: Kevin Mowbray, Head of the Secretariat from the Welsh Energy Research Centre, employed by the University of Wales, Swansea.

Professor Bowen: Phil Bowen from Cardiff School of Engineering, Cardiff University; and I work under the Welsh Development Agency's Centre of Excellence for Energy.

Professor Hawkes: Dennis Hawkes, from the University of Glamorgan, working with the Sustainable Environment Research Centre, but one of its branches is a hydro research, which I am mainly involved in.

Q118 Chairman: May I begin by putting on record my congratulations to you on the launch of your Centre and upon your wisdom in the location of your Centre in my constituency. Could you begin by explaining to us the remit and scope of work conducted by your Research Centre?

Mr Mowbray: The Welsh Energy Research Centre was formed in the summer of last year. The Welsh Energy Research Centre is a collaboration of all the research bodies who are active in the energy field in Wales and that includes HEA institutes and other independent research bodies. The five objectives of WERC are: to increase the impact of Welsh energy research by using the critical mass generated by the multidiscipline research that we did; to use that critical mass to attract R&D investment to Wales from sources such as DTI, EPSRC, UK Framework 7 and external industry sources and we focus on collaboration and multidisciplined pots of money; another objective is provide independent authoritative advice to the Welsh Assembly Government on energy policy, if asked, to support the Welsh economy by knowledge transfer; and we are working on building a close liaison with the UK Energy Research Centre and other international centres of excellence. The Welsh Energy Research Centre is directed by a Steering board of which Professor Bowen and Professor Hawkes are members. The board members represent technology areas, as opposed to their own institutes. New board members can be invited on to the board for particular technologies when the need arises. The board meets quarterly and time is set aside for each technology area to be commented upon. The board is supported by the secretariat which also provides the daily operational running of the WERC. The secretariat develops and maintains the industry and academic network to fulfil the objectives of knowledge transfer and economic development. It also searches for available funding for collaborative interdisciplinary work. The secretariat is supplied at this time by the Sustainable Energy Technologies network at the University of Wales, Swansea. The network is funded by the Knowledge Exploitation Fund until June this year. The secretariat is working toward longer- term funding. The secretariat is working with the Welsh European Funding Office at this time to achieve Objective 1 funding to finance up to 20 energy projects, with a total worth of all those projects of £8.5 million. Current events so far have been a multidisciplined seminar on current energy research, which was held at Port Talbot. I would like to thank Dr Francis for coming to that event in September. Our latest seminar was a marine renewable energy route map held in Pembroke in December of last year.

Q119 Chairman: Thank you for all that information. Can you give us a bit more detail about your funding? Where do you get your funding from, the UK Government, the Welsh Assembly Government or some other source?

Mr Mowbray: The board itself is funded by the time currently generated by the academic professors from each of the universities. They are employed fulltime and then turn up for the board, give advice and work together to collaboratively operate. The secretariat is paid for by the Knowledge Exploitation Fund. The KEF funding is 50% from the Welsh Assembly Government and 50% from European Objective 1 funding. That money will run out in June this year. We are currently working with the Welsh European Funding Office to get Objective 1 money for the longer term. Part of that project money will fund the secretariat, hopefully, for a period up to 2008.

Q120 Chairman: Will the Centre benefit from the research assessment exercise? Will there be any spin-off from that?

Mr Mowbray: The research assessment exercise will deliver money through HEFCW to the institutes for research. The WERC in its current form will not benefit from any RAE funding. It is purely operating on external funding.

Q121 David Davies: What is the total funding for the non-exploitation fund which the WERC access? You said you had 50% from European sources and 50% from the Assembly?

Mr Mowbray: The Knowledge Exploitation Fund I believe had something like £11 million.

Q122 David Davies: Of that, how much goes to the WERC?

Mr Mowbray: £50,000.

Q123 Chairman: You referred in your first answer to your relationship with the Welsh Assembly Government, how does the work of the Welsh Energy Research Centre relate to the UK Government policy, which is very important when you consider the evidence we have had from the DTI, where it has in effect an overarching influence over the Welsh energy policy?

Mr Mowbray: With regard to the Welsh Assembly Government's policy on energy, I believe there is no defined policy towards energy because at the moment they have the route map consultation out at this time. The policy I believe will be developed after the UK Energy Research in the summer. I believe the Welsh Assembly Government's policy at the moment is to keep in line with UK policy in the development of clean technologies, up to 10% in 2010. The WERC is working towards developing those technologies that can take you to that stage in 2010.

Q124 Chairman: You do not have a direct interface with the DTI in terms of guidance policy formulation and finance?

Mr Mowbray: We have not yet developed those links. The links we do have are people like Professor Hawks working with the DTI on schemes such as SuperGen and other grant schemes that we bid for independently. The WERC is not yet evolved enough to actually become a vital part of DTI's interaction. We are developing those routes as we go along.

Q125 Chairman: Have you thought much about your interface with the UK Government? It seems, quite understandably, in your early stages that the interface with the Welsh Assembly Government is a very strong one?

Mr Mowbray: Yes.

Professor Hawkes: You must understand that WERC is at a very early stage. Its importance is in its potential rather than what has happened at the moment. The funding has been very low; and there have been no big activities yet. However, we are involved with the DTI in other aspects, as individuals. I, for example, am supported by the DTI on the International Energy Agency on annex 21. Those are the sorts of areas we feed into the policy side of the UK Government. A colleague of mine sits on the IPHE - the International Partnership for Hydrogen Energy. Those are the sorts of things where we do have involvement, but that is as individual organisations or as individual people rather than as WERC?

Q126 Chairman: Do you have any relationships with other similar centres? Are there similar centres in Scotland, Northern Ireland, Ireland or countries with similar socioeconomic energy profiles as Wales?

Professor Bowen: I think that was part of the intention, to actually develop along those lines when we first started looking to work together. We are not at that stage to actually exploit that sort of collaboration yet, but it would certainly be part of our overall aims and goals.

Mr Mowbray: We have a lot of contact with the UKERC, especially with John Loughhead the Executive Director of UKERC. I am working with him at this time to develop a research atlas for Wales to discover exactly what skills and expertise we have in Wales which will actually link into a live database with UKERC at some stage.

Q127 Chairman: Is there a similar research centre in Scotland?

Mr Mowbray: Yes, there is a similar research centre. Again, it is at a fairly early stage, and we do not have that close a link with them at this moment; but it is an intention to develop those links. Where we are at the moment is that we are getting to a stage where we have stable funding, where we can actually put the time in to do that. Our priorities at the moment are to find funding to set up the industry network within Wales and to develop the Welsh economy and those links will come as they develop over time allowing industry to do that.

Q128 Mr Crabb: How well do you think the energy policy objectives of the UK Government dovetail with those of the Welsh Assembly Government?

Professor Hawkes: I think the Welsh Assembly Government policy currently has five important strands, say, in the Energy Wales route map; and those five strands are effectively the same as in the UK, so it is very similar in that. There is very little difference in energy policy between the UK and Wales. The major difference comes in terms of delivery. As an example, the percentage approval rates for wind farm applications, for example, in the UK as a whole are as follows: in England, 60% approval; Scotland 93% approval; and Wales 12.6% approval. If you look at the actual "refused" to "accepted", in England it is 150MW accepted and 76 rejected; in Scotland it is 210 accepted and 16 rejected; and in Wales it is 34 accepted and 236 rejected. You can see that there is a difference in the way in which policy is working out in Wales as against the rest of the UK.

Q129 Mr Crabb: Just thinking about CO2 emissions - officials from the DTI told us that targets would be monitored at the UK level. Is there any merit in monitoring those targets at a regional level as well?

Professor Hawkes: Personally I think we could monitor it at as small a level as possible, because that might give some incentives to individual counties, down to those sorts of levels. We need some kind of competition to get the CO2 levels down. If it is measured reasonably it would be better. If it is measured in even smaller areas than that it might be even better to get some competition into the system.

Q130 Mr Crabb: It has been suggested that the topography and geography of Wales means it could play a significant contribution to meeting the UK national targets. To what extent do you think Wales could end up subsidising the targets for CO2 emissions for the rest of the country?

Professor Bowen: Personally I do not see that as a problem. CO2 is a global issue. We need to make the distinction in terms of environmental aspects between global and local pollution. I know it is a different subject, but in terms of CO2 it is so far-reaching internationally drawing a distinction within the UK pointless.

Mr Mowbray: If I could make a personal comment on that. If you are looking at compensation for reducing CO2 in England, if we actually invested in the renewable energies in Wales then by that you would be compensated for by supplying clean energy into other parts of the United Kingdom. Develop the industries in Wales, such as wave tidal biomass PV etc, you will be paid for that because they will be buying your technology and your clean electricity. If you do not develop the industries then we have to buy in from them and we will be paying them.

Professor Bowen: I think it is the incentive thing which is the major issue. It is monitoring CO2 at a smaller level, raising awareness and getting incentives going.

Q131 Jessica Morden: How can we square the circle of wanting more sustainable energy, while limiting its use because of potential threats to the local environment?

Professor Hawkes: I think increasingly we are seeing that economic growth and environmental protection are not exclusive - in fact they go together; and if we generate industry in Wales for environmental protection or, for that matter, for energy security, we will end up benefiting by the industry that we can sell to others. I think that point has already been made.

Q132 Chairman: What is your view of the DTI's opinion - perhaps "evidence" is to strong a word - that they cannot measure these things at regional level and you can only do it at a UK level? Do you challenge that?

Professor Hawkes: No, I do not challenge that. At the moment they cannot. I do not see any reason why it could not be done at a lower level but at the moment it is not. The evidence is not gathered in that way.

Q133 David Davies: What do you think are the most viable options for sustainable energy in Wales?

Mr Mowbray: Taking the overall picture, there is not going to be one technology that is going to take over. There is not going to be one technology that is going to be able to provide what we need. For example, Wales consumes at the moment round about 9.5 million tonnes of oil equivalent. If you take the biomass, then open land for cultivation is around 700,000 hectares; if you look at 10% of that for cultivation of energy crops, you will actually get round about 0.35 million tonnes of oil equivalent in energy crops. That is 30% of the 10% towards 2010.

Q134 David Davies: Could that increase over a period of time or is that pretty well finite, because unless you actually increase crop yield there is only a certain amount of land and, as you pointed out in your answer, much of that has to be for the cultivation of other crops?

Mr Mowbray: That is pretty much a planning and environmental point of - how much land do you use? You have to have some land left over to farm for food. If you go to IGER - and John Barnes from IGER and also a member of the steering board is coming here next month - they are developing crops and seeing how they can grow more efficiently and to give more environment. Yes, you can increase that. An important part of biomass is burning waste. That will bring in the Forestry Commission. Then you have also got photovoltaics. Photovoltaic prices are coming down and we soon should have thin film technology. There is going to be a mix of tidal wave, photovoltaics, biomass, bioethanol and biofuels. I never stick my neck out and say which technology is the best one - you need them all. Around about 20% each would be an overall view of what can happen.

Professor Hawkes: We would agree with that. One area that has not been considered perhaps in the list of items that you were considering in the first letter we had was the idea of waste and energy, that connection. There is a double opportunity there obviously with waste that is underexploited in the UK. For example, one of the things we are working on is with a company that produces flour for bread-making and they have a co-product left over which we have been converting into hydrogen. The net result of all of this is that we and they think that they will be able to save something like £277 million worth of diesel a year as a result of this technology. We are now going to pilot-scale funding by the Carbon Trust; and the laboratory work is funded by Carbon Trust as well. At the end of that, providing that is successful, the industry will be interested in full-scale plant. Those are examples of what we can do.

Q135 David Davies: That is obviously all very worthwhile work but to return to the original question, what you are actually saying is to use the example of biomass (which I think is a promising technology) it is only likely to fulfil what I calculate to be one-thirtieth of our energy needs - 0.35 million tonnes of oil equivalent out of a total requirement of 9.5 million tonnes. Clearly that is what you see as one of the more promising ones - and I appreciate photovotaics are coming down in price and obviously we will come on to wind power - but that is not going to plug the gap, and there is a big shortfall?

Mr Mowbray: I was expressing that as the 2010 target, of around 30% of the 10% target. Over time these technologies will develop, dependant upon the amount of investment we put in them now.

Q136 David Davies: I think we both agree, to take the example that you use...

Mr Mowbray: ...you cannot go beyond the land you have.

Q137 David Davies: No. It is fair to say that there is a big hole that we need to find a way of plugging, and the existing technologies do not really do that at the moment?

Mr Mowbray: Certainly in the 20-year period you would have to find something.

Professor Hawkes: What we do need to do is to start now to invest in these, because in 20 years' time we will still have the problem. This is perhaps the frustration for us.

Mr Mowbray: Tidal energy could actually fulfil 20% of Wales' energy needs but you are talking about a 15-year time line.

Q138 Mr Jones: Excluding costs, which forms of renewal energy offer the greatest output in terms of electricity and power?

Professor Hawkes: That is difficult to say, I think. Excluding costs, which forms? Again, it depends on the scale that we can get to in any individual technology, and that depends on how soon we start investing in those technologies. What we will be doing in the not too distant future is importing these technologies from other countries who have invested in them. If you look at the investment going into my area, for example, of hydrogen, it is quite large in a number of countries very small relatively to the UK, and almost nothing in Wales. These are the sorts of examples, if we do not invest in the technologies, where we will be importing them later on. Which technologies will give the most? That is very difficult to say. All of them have a contribution to make.

Q139 Mr Jones: Have you considered all forms? Your colleague read out a list but omitted geothermal. I am not saying that for Wales, but there is the possibility of deep geothermal producing enough energy for us all in that one technology. Have you considered that in your consideration of the various forms of sustainable energy that you are considering at the moment?

Professor Hawkes: Personally, no, we have not; it is not our area, geothermal. I think it is quite a specialist area in which we are not involved.

Professor Bowen: Professor Hywel Thomas of Cardiff is a colleague of mine and specialises partly in that area, but I do not work directly in that area so I could not comment on its potential.

Q140 Mr Jones: Do you think this is something worth looking at?

Professor Bowen: Yes.

Professor Hawkes: Some areas of the UK, as I understand it, are much better situated for that than in Wales. I am not a geologist and I have no idea about these things.

Mr Mowbray: Part of the remit for the WERC is to actually look at our skills and expertise so we can concentrate on and make use of the critical mass we have, rather than spreading ourselves too wide.

Q141 Mr Jones: We could be spreading out looking at a tiny percentage of energy production from biomass with a bit here and a bit there and missing completely something which could actually solve all our problems?

Professor Bowen: To pick up on that point and not to forget the potential of clean-up as well, with the fossil-based fuels you have got carbon sequestration technology now being developed and a lot of activity and research money being put into that area. The DTI conference just before Christmas was saying there is a lot of potential, with BP giving evidence. In terms of the bigger picture, you must bear in mind the fossil fuels and what can be done there to clean-up.

Q142 David Davies: Can you shed some light on the confusion that we have sometimes seen over issues of capacity and output of wind farms, particularly relating to those in Wales?

Professor Hawkes: Do you mean installed capacity, as against the output?

Q143 David Davies: Yes.

Professor Hawkes: I am not a wind expert but, as I understand it, the installed capacity is what theoretically you can get from the system if it is running 24/7; and the actual capacity is what you get from the realistic situation that you have got, which is somewhere around 28%. Sometimes when you see wind turbines not turning, it is not because they are not working or have broken down - it is because the production is higher than the contract that has been made. Wind farms, as I understand it, operate on a contract with the grid, and that is usually on a half-hour basis; so you predict half an hour ahead what the wind will be. If you can predict it correctly then you get the maximum you can out of that; if you do not, then your contract is such that you cannot supply or you over-supply and you turn the wind turbine off.

Q144 David Davies: People actually have to turn the wind turbines off when it is windy?

Professor Hawkes: As I understand it because of the regulations, but maybe someone else knows better than I do. I am not an expert.

Mr Mowbray: Unfortunately the wind does not blow at the right times!

Professor Hawkes: One of the ways around that, of course, is what we advocating, that you can use the surplus that you cannot use otherwise by peak loping, as it is called, taking that off. You can use that surplus energy to produce hydrogen. That is one of the areas that is being looked at by a company in Wales, which is now operating in Scotland because they could not get planning in Wales, and ourselves as well.

Q145 David Davies: With that in mind, what sort of contribution could wind power in Wales make to the targets for UK energy production? Bearing in mind also, it seems to me it is already punching above its weight, because the statistics which you used earlier about wind farms rejected would still suggest to me (and I did a quick calculation here on the figures you gave for Scotland, England and Wales for the number of wind farms rejected and accepted) the total accepted amounts are some 400-odd, 210, 115 and 34, of which Wales has got 35 which is well over 5%, in fact it is almost 10% of the total; and Wales has only got 5% of the total population of the UK. I know where you are coming from - your statistics appear to show that Wales is not doing anything like enough to sanction wind farms; and yet looking at those same statistics, it is possible to make an argument to say that Wales has got twice as many wind farms as its population numbers would suggest it should have.

Professor Hawkes: I was only making the point that there are a lot more rejected applications in Wales than there are in other parts of the UK. I was not making a point of whether there should be more.

Q146 David Davies: How significant a contribution can Wales make? How significant is it? Your figures suggest that Wales is already making a very significant contribution indeed.

Professor Hawkes: The figures suggest that it could make an awful lot bigger contribution. We are not in a competition of who can supply the most in different areas of the UK, I trust. We are trying to supply as much as is practical to get the whole of the UK out of a problem and not just Wales.

Q147 David Davies: The figures would also suggest that wind farms are not a popular option with local people?

Professor Hawkes: They are not a popular option with some people who have been very, very vociferous about their objections; and, I understand where some of you come from, you may be in areas where that is the case. That is largely to do with the lack of a socioeconomic input into the whole system of wind farms, that public education and public understanding is not what it is in some other parts of the world for example. The situation is very different in Nevarra, Spain where the population is totally for wind farms. I think we have got a relatively small but very vociferous lobby against wind farms, in Wales in particular; and that is partly because of how it has been sold, I would suggest, in the past.

Q148 David Davies: How much do you think wind farms have to be subsidised by in order to make them practical?

Professor Hawkes: I do not know the answer to that.

Q149 Mr Jones: Given that industrial-scale wind farms will often be intermittent and damage our scenic areas to the detriment of other sources of income in Wales, such as tourism, are we in danger of over-relying on such industrial scale wind energy as a major source of sustainable energy within Wales? I particularly say "industrial" because there are other options for wind energy, such as small generators on every house, for example, which would be far better in my view. Could I ask you about further reliance on large industrial- scale wind energy?

Professor Bowen: I think that is part and parcel of what we have observed. We are trained to spread that technology base and it is true to say that wind is at the forefront of the renewables push at the moment. As well as the public acceptance, you have also got, as I understand, the MoD constraint as well. There are other barriers for wind. If we can bring all these other technologies, which maybe have a longer bedding-in time; there is the marine situation, for example and we have already mentioned biomass. All these are giving currently relatively small potential impacts in the near-term, but as they come on-stream we can build up on the marine side. That is something where we do have potential in Wales.

Q150 Mr Jones: The answer is, yes, we have problems at the moment?

Professor Bowen: Probably taking a bit too much comfort from it, I would say.

Professor Hawkes: I would say it is not to making too much from wind but it is not enough from the others as well.

Mr Mowbray: In the time line wind is the most productive component we have at the moment. As time goes by reliance on wind will come down, but it is a big element. We are not over-reliant on it; it needs to be part of that mix. Our reliance will come down as other technologies come alive. We can make wind a lot more efficient, as Professor Hawkes was saying, by capping our access and actually storing it as hydrogen which we can use in transport (which I think has been overlooked) and again in energy production.

Q151 Mr Jones: The storage of any form of energy is a problem.

Mr Mowbray: I come back to your point about small turbines on houses - you can make each house an energy production centre and put solar panels on the roof, and small turbines in the garden which on non-peak times create hydrogen; with smart metering that then feeds back into the system when required and called for and it all combines together. You can also use the hydrogen and put it into your car and go down to Tescos.

Mr Jones: That is a far better way forward than industrial scale wind farms.

Q152 Mrs James: Have you any indications or possible examples of the costs and viability of harnessing energy from marine projects?

Mr Mowbray: The viability is there. If you harness all the potential for Wales you could supply 20% of the electrical needs for Wales. Current electrical needs for Wales are 16 terawatts - that is 16 x 1012. You can supply 20% of that, which is 3% of the UK needs. You are looking at a time line of around 12-15 years to be able to achieve that. The DTI came down with tidal turbines at around 12p/kilowatt. Other wave technologies are up to around 24-40p/kilowatt.

Q153 Nia Griffith: Could you separate wave and tidal?

Mr Mowbray: Wave capture is waves lopping over the side into a basin and draining through generators. Tidal stream is essentially wind farms under the ocean. With tidal streams you can add to the base load. You can actually add tidal streams to the base load because it is six hours in and six hours out and it is constant, unless they switch the moon off.

Q154 Mrs James: When the DTI gave evidence here last week they were very sceptical about marine renewable energy, and they also gave the impression that it was going to be very costly. With some of the things you have been talking about here now, you are talking about a long time line. Do you see a time when it will be very cost effective when it will compete fairly with other forms of energy?

Mr Mowbray: Yes, once you get these devices into production the scale comes down. There are two things: firstly, the price of that technology and supply will come down; and, secondly, Wales could sell that technology and also create an industry. Devices do take a long time to develop; devices are expensive to develop. That is the crux we are in with Welsh industry at the moment. Most of the industries in this area are small companies and they cannot afford to spend £5 million pounds to drop one piece of kit into the ocean. Speaking to BP, exactly what they said was, "If you came to us this year with this amount of risk and asked us to put in £2 million then we would not go for it; we are not interested. If you came to us in five years' time with half the amount of risk but costing £20 million we would invest". Our developers are stuck. They do not have the money to go forward and develop devices; but they do not have enough production to show to investors, BP and Government to actually put money in. At the moment it is very costly but if you can get that technology going it will bring down the price and it can add to the base load and it is a constant supply.

Q155 Nia Griffith: As you say, tidal energy is absolutely 100% reliable unless they switch the moon off. Is it really very short-sighted of us not to actually be investing more at this early stage? Could you perhaps tell us a little bit more about the tidal lagoon technology; what we have got in terms of knowledge and what we need to do to make that viable?

Mr Mowbray: In terms of the tidal lagoon I think you are referring to the Swansea lagoon, which I would like to steer clear of because that is a highly politically-charged subject at the moment in Wales.

Q156 Nia Griffith: Because it is Swansea or because it is tidal lagoons?

Mr Mowbray: Because there is a Swansea tidal lagoon being developed at the moment which there is some conflict over. The main thing is that there is not a lot of research to do that. It is a structural engineering project and a planning project.

Q157 Nia Griffith: Are you saying we have got the technology?

Mr Mowbray: The technology is there and the engineering is there. It is a case of the planning saying, "Okay, yes, we're happy to have this here for X amount of years". In terms of tidal it could be up and running in 18 months, providing supply to the grid; and with wave drag and various wave technology they are looking at having work on-stream by 2008. There is a company called MCT, Marine Current Turbines, financing wind farms essentially; they say they can have that in place by 2009. With more advance technology which is being developed in Swansea University at the moment you are looking at 10-12 years' time.

Q158 Nia Griffith: Essentially you are saying there is away forward here provided there is a will to do this?

Mr Mowbray: Yes, there is a way forward if there is a will to do it looking at the environmental and planning aspects, as opposed to the research side. The DTI and the Welsh Assembly Government, I believe, have looked at this area and have their own opinion. I would not like to step on their opinions of that.

Q159 Chairman: Is there a shared opinion of the DTI and Welsh Assembly Government, or is it pushing the boat out too far?

Mr Mowbray: I think the DTI and WAG are together on their opinion. Again, I would like to avoid that question and let Ron Logan the Chief Technology Officer talk to you on that one.

Q160 Chairman: There will be political controversy at every stage of your development as a Research Centre. If you are to be successful you obviously have to engage in some controversy at some stage.

Mr Mowbray: Yes, and probably like to constrain the research aspect as opposed to the engineering and planning aspect of that, to actually just give good advice and good figures and let people, such as yourselves and WAG, work that out. There is a degree there, as Professor Hawkes mentioned earlier on, in the fact that the socio scientists could help a lot more in this area, in looking at public perception and the way forward with these technologies. I think that is a pretty good fundamental part of energy research - the perception of the public - and we need to get the socio scientists more involved.

Q161 Jessica Morden: What are your views on the viability of the Severn Barrage project, and will it become a reality, do you think?

Mr Mowbray: The Severn Barrage will be a huge project sucking in huge amounts of resource. I have been told that could produce around 7% of UK energy needs. In terms of construction, you could say, "Well, what are the energy needs to create the cement which goes into that project?" - that is a question; but, on the other hand, I am reliably told by the marine people in Cardiff, Professor Roger Falconer, there could be a positive effect on the marine wildlife in the Severn Estuary by taking out the sediment and creating more sunlight in the water. On the positive side you are creating clean energy; you are bettering the biodiversity and the bio-life there. On the negative side it is a quite huge engineering project, whether you would get the funding to do that and also the resource planning UK-wide.

Q162 Jessica Morden: If this is going to cost billions and could provide up to 7% of the UK energy needs, is it worth it; is it value for money?

Professor Hawkes: Not at the moment.

Mr Mowbray: I would say if you spoke to a gentleman called Sir John Cadogan, who used to be the Research Director for BP, they looked very closely at this question. He might be a more knowledgeable person on that.

Q163 Jessica Morden: Could you explain a little bit more about the marine wildlife and the benefits to marine wildlife?

Mr Mowbray: Professor Falconer could give you more information on that. I believe the Severn Estuary is 20% sediment and that blocks all of the sunlight. Somehow the barrage would reduce that sedimentation.

Professor Bowen: I think it does give a good example of one of the things we are trying to achieve in the Energy Research Centre, which is trying to cross disciplines which we have not really touched on too much, or given examples of. That is a very good example whereby you have got the power generators interacting with one of the knock-on effects in terms of the environment, which is what Professor Falconer specialises in. You can get this whole-picture type of approach; whereas at the moment we tend to do it in discrete batches, as it were. I think the Severn Barrage is something which should be reconsidered. The barriers are the finance, as you say, and maybe the energy put into creating it in the first place. In terms of the second, on a global scale (with CO2 emissions being a global problem) then maybe that one is a little easier to comfort yourself with; and the finance one is the one that needs to be concentrated on.

Q164 Nia Griffith: Obviously if we are talking about the Severn, it is a very big project. Has there been any research on similar but smaller projects? We have estuaries all around Wales and they are not only the types you describe, but what people use for hydro things as well, like Spain. Has there been much research done on either using the tide coming into the estuary or using the flow coming down?

Mr Mowbray: Looking at estuaries and tidal, the only one I know of is Swansea University looked at putting a turbine into a river in the Brecons. The Brecon National Park turned round and said, "No, you cannot put that in our river". They had to actually take it out of the river, strap it to the back of a boat and tow it outside Swansea Bay. That is the only one I know about at this time.

Q165 Nia Griffith: Do you see potential for that in smaller estuaries?

Professor Hawkes: I would have imagined so, but I have got no experience of that.

Q166 Mr Crabb: Do you think the UK can meet its energy objectives in the next ten, 20 or 30 years without some reliance on a nuclear component to the energy mix?

Professor Hawkes: One thing that is not part of the remit, I guess, is energy saving, and I think that is a very important area to be looking at. I think we should and could cut out energy uses considerably. If then we also invested the kinds of sums of money that we invested in nuclear in the early days into alternative energy sources, then that is possible. The problem is we are not starting from an ideal situation; we are starting from where we are. Regrettably - because I have views on nuclear having visited an area around Chernobyl which has obviously affected my views - we will be dependent on nuclear for a number of years to come.

Q167 Mr Crabb: The National Assembly has stated that it is opposed to a second generation of nuclear power stations and the UK Government is still considering it. If the UK does go down the road of pursuing next generation nuclear power stations, how would this difference of approach between the national government and devolved administration be managed? Is it realistic to think that Wales could be nuclear-free if the UK Government has chosen to pursue the nuclear route?

Mr Mowbray: I think under Rule 3637 anything above 50MW then the UK Government would take a precedent on what is sited where. At the moment we have five large generators in Wales which were refurbished by Wylfa and the new gas generators coming on-stream in the next few years, I believe. We have excess power. I think we are okay without adding to the nuclear stock. Professor Hawkes was saying to you this morning about a fuel source.

Professor Hawkes: At the moment we burn gas in a gas turbine generator and that is in the 30% efficiency; whereas the new fuel cells that are being developed by, for example, Rolls Royce megawatt size they are reputed to have a 60% efficiency. If we were to employ those in the future - and I am told they come on-stream next year - then we could increase the efficiency of the use of our natural gas resources that we have coming in to Pembrokeshire, for example, and therefore require less of another primary energy source. These are the things we need to be thinking of. The other thing we have not thought about at all is transport, and transport is often divorced from energy. I do not know why because transport is a large component of our energy use and should always be thought of together with energy, I think. We need to be thinking about all sorts of things to do with policy which will affect our use of transport, our energy saving and our energy efficient use. All those things need to be thought of together, not only just more ways of getting more energy.

Professor Bowen: I think that is a major frustration across the Research Centre at the moment - the omission of transport. As researchers we think of fuels and applications; it does not matter if it is transport or electrical power generation; but then of course you are forced down certain channels if the politics decide otherwise. If you superimpose on top of that of course aviation is a major aspect that tends to get overlooked in terms of transport, sometimes you can get some quite conflicting points of view if you look at some projects of mass air travel in the future relative to what happens to the net effect on the environment.

Mr Mowbray: Could I just mention of the 9.5 million tonnes of equivalent oil that we use, 4.27 of that is just petroleum, so over 50%. Transport is a major component of the energy chain.

Q168 Mr Crabb: Can you help us understand a bit more about the practicalities involves in extending the life of the nuclear power station and the issues around nuclear waste, for example?

Professor Hawkes: I am not a nuclear expert but I just know that nuclear waste is not a good thing. It is very difficult to store for centuries; and there is no good way of storing it at the moment that has been found. We have problems for the next centuries, not just the next few years, with storing nuclear waste. I am biased and I admit that.

Professor Bowen: We do have expertise within the Energy Research Centre. Professor Hywel Thomas specialises in that area. Again, I am not in a position to comment.

Q169 Mr Crabb: Is Professor Hawkes' bias shared across colleagues within the Research Centre or is there a diversity of views about nuclear; or would you say that your view is the dominant strain within the Research Centre?

Professor Hawkes: I think it is a view shared by Rhodri Morgan according to his latest pronouncement in January! My view is coloured by the fact that I visited the area around Chernobyl. I know that the current nuclear power stations are not the same as Chernobyl but the effect of the leakage there is immense. If you have not visited those areas you cannot imagine what it is like to have thousands of acres of land just derelict and not able to be used for centuries to come. Those who survived moved out and were displaced. When visitors came to our university from that area the only thing they wanted to take back with them was a Geiger-counter so they could measure the food they were eating. That is serious. I would have to be persuaded (and I have not been persuaded) that the storage methods and the safety against terrorist attacks, and all the other things we fear, are adequate before I could be convinced that nuclear was ever safe.

Q170 Mr Crabb: Have you been to Wylfa?

Professor Hawkes: Not that one. I have been to some sites in the UK and I am very impressed and they do it very well, but they have never had a terrorist attack or they have never had a major leak perhaps.

Professor Bowen: I think of it more generally from a risk hazard point of view so I guess I am not quite as far leaning as Professor Hawkes but it is a case with all these technologies of management of risks. There are risks with all these technologies, and the timescale changes and how we manage that and compare different risks and present that to the public is going to be a major challenge, and we do not always get it right. Whether other academics can help in that matter is a moot point, I guess.

Q171 Mr Jones: A question for you, Professor Hawkes, I think your expertise is in hydrogen. Can you tell us about the benefits of hydrogen as an energy source and the realistic possibility of having a hydrogen economy in Wales?

Professor Hawkes: Hydrogen is really an energy sector like electricity rather than anything else. It is not a primary energy source. You have to produce hydrogen from something else. The benefits of course are once you have the hydrogen, when you burn it in air you get no carbon dioxide and very little other pollution. If you use it in a fuel cell then it is even more efficient and there is no pollution from that, apart from just water vapour, so that is the advantage. You can also convert certain energies into hydrogen. You can convert wind power into electricity and then into hydrogen for use in fuels. Some of the work that we are doing is with biomass and converting biomass to hydrogen and a product from that is able to be transformed into methane. That is work we have been doing for the last 30 years, the methane side of it, so it is the combination of hydrogen and methane which has a name in the States called "hythane" which is a very good fuel for vehicles, with very low NOx and very little pollution. That is some of the work we are doing here in Wales as well.

Q172 Mr Jones: Do you get hydrogen from biomass directly or do you have to go through the electricity route?

Professor Hawkes: No you get it directly. The microorganism concerned produces hydrogen directly from the biomass.

Q173 Mr Jones: In your paper you outline the several political requirements which are necessary to promote energy policy and you include political leadership, fiscal policy and legislation. How do you see the division of powers between the National Assembly for Wales and the DTI having an impact on that policy within Wales?

Professor Hawkes: Within Wales obviously the attitude of the Welsh Assembly Government is very important. They have been very supportive in words, they have spoken at many of our meetings and so on, but the finances coming forward have been very, very slow. One of the things that we were talking about on the train on the way up is the frustration we have in the way that things take a year or 18 months to go through the system and it is a very slow process.

Q174 Mr Jones: How confident in that case are you that the timeline that you are predicting for a hydrogen economy within Wales is realistic?

Professor Hawkes: It is the political will really. If the political will is there then that timescale is quite valid.

Chairman: Well, thank you very much and thank you for your memorandum. If you feel that there is additional information that you would like to share with us, particularly from your colleagues who were unable to be present, we would be very happy to receive it. Have a safe journey home. Give my love to Port Talbot.

Memorandum submitted by Dulas Ltd

Examination of Witness


Witness: Mr Rod Edwards, Director, Dulas Ltd, gave evidence.

Q175 Chairman: Could I welcome you to the Welsh Affairs Committee and just for the record could you introduce yourself.

Mr Edwards: Good morning, ladies and gentlemen. I am Rod Edwards and I am a Director of Dulas Ltd, a Welsh-based renewable energy company.

Q176 Chairman: Thank you for the memorandum you sent us. In the memorandum, if I could begin by referring to the political context of energy in Wales, you mention "continuing problems" in the division of powers between the National Assembly for Wales and the UK Government. Can you explain the nature of these problems and how they might best be resolved?

Mr Edwards: The first part of the question, yes, I can certainly give my opinion on the nature of them. How they can be resolved is a very difficult question. The Welsh Assembly set an ambitious target for renewable energy in Wales. However, the only way they can really influence the rate of development is through the planning system. As you know, they do not have devolved powers on energy, which means the only means they have of setting the way that energy is generated within Wales is through the planning system, and I think that is certainly where I perceive the tension to be. How that can be resolved I do not have a clear opinion on this. I can see the difficulties. My belief is that energy has to be a national preoccupation. I find it very difficult to see how the Welsh Assembly could set energy policy within the context of UK energy policy.

Q177 Chairman: If I can put the question in a different way then. How do the DTI and the UK Government's policies dovetail with the Welsh Assembly Government's policies and strategies in the field of energy policy?

Mr Edwards: In my own field in renewable energy the overarching policy driver is of course the Renewables Obligation and the 10% by 2010 and 20% by 2020. The Welsh Assembly's planning policy, the policy that came from the Economic Development Committee, reflected that. They set a target for 2010. Further down, the implementation methods of the DTI, things like the Clear Skies programme, are available to Wales but they are centrally administered through the DTI in London not through the relevant part of the Welsh Assembly Government.

Q178 Chairman: Could you illustrate for us those aspects of the relationships between the UK Government and the Welsh Assembly Government that work well?

Mr Edwards: That is a difficult question to answer. I think what has worked well is the driver of 2010. I think that informed Welsh policy towards renewable energy and that through the planning policy they have acknowledged the 2010 target. They have set an ambitious target and they are driving that forward. Personally I would like to see the support for the smaller renewables and micro renewable generation coming much more through the Welsh Assembly rather than directly from the DTI. I think the Welsh Assembly understand a lot of the imperatives and a lot of the things that are driving the renewable energy economy better than is understood in Westminster, but specific examples of how it has worked really well is difficult because the support mechanisms, for instance, that are available are available through Westminster rather than directly through the Welsh Assembly, except through certain initiatives through Objective 1 funding, things like the support that Finance Wales was able to give. I mentioned the Wood Energy Business Scheme which is supported ultimately by part of the Welsh Assembly Government and the Forestry Commission, which has given a big push to wood fuel biomass.

Q179 Chairman: Which I think leads me almost directly to the question why should an All-Wales Energy Agency be established and what could it achieve?

Mr Edwards: I think it would be a good thing because there are a number of regional energy agencies. There is the Mid Wales Energy Agency, the Conwy Energy Agency and the Swansea Energy Agency. They are largely quangos, for want of a better name for them, largely funded through European funding and with certain funding from different departments within the Welsh Assembly Government, and I think some sort of overall co-ordination of that effort would be beneficial. The energy agencies do a very good job in that they tend to support local initiatives, but I think certainly I reflect the views of the Director of the Mid Wales Energy Agency that a bit more co-ordination of the initiatives throughout Wales would help deliver services better.

Q180 Nia Griffith: You talked about the fact that the Welsh Assembly Government has not adopted the PPS22 guidance that has been adopted by local planning authorities in England for supporting small-scale renewable energy. Could you explain to us the difference then between that PPS22 and the TAN8 and what impact those different procedures have for increasing the role of renewable energy?

Mr Edwards: PPS22 was a lot stronger on energy in the built environment and the smaller micro renewables in that it did suggest in fairly strong terms a 10% target for any new build within the local authority area. It did put the onus on the local authorities to develop supplementary planning guidance to bring that in. TAN8 alluded to it but it did not have that suggested 10% target. What we are seeing at the moment amongst house developers in England is they can see that this is something they have to implement because the local authorities are demanding it. We have not yet seen that driver in Wales. Although TAN8 does allude to it, it is not as strong and it is not as clear as PPS22. I think therefore it is not providing the driver that PPS22 is providing.

Q181 Nia Griffith: So you think there would be a good case for including it in its entirety?

Mr Edwards: I do because at the moment it is providing quite a strong driver. We are seeing it. We are having to respond to the larger housing developers, for instance Gallagher's, in areas where there is large-scale housing development and the local authorities are requiring them to consider energy and local generation of energy in the built environment. Quite frankly, they do not know what to do. Developers are not familiar with the market, they are not familiar with the technologies, and they are coming to companies such as ours for specific advice. We are not seeing that happening from Welsh housing developers at the moment. It may well happen. I know of at least one local authority in Wales that commissioned us to look at the small renewables and make recommendations to them of things that they should be putting in their supplementary planning guidance and they were very receptive to the idea of having a local target. Whether that does eventually become embodied in their supplementary planning guidance I do not know but at least there was the willingness to do it.

Q182 Nia Griffith: Can I carry on on renewable heat. You tell us that the National Assembly of Wales chose to adopt the renewables target for electrical production for 2010 but they did not take up the linked recommendation for renewable heat. Have you got any explanation as to why that may not have been taken up and what the implications of that are?

Mr Edwards: My opinion as to why it was not taken up is that there is not a requirement and obligation for renewable heat production in UK national energy policy and therefore the Welsh Assembly did not include it, the EDC did not include it. However, they are fully behind the prospect of using particularly biomass for heat production and have supported major initiatives. I understand that it is under consideration on a UK-wide basis in which case I sincerely hope the Welsh Assembly will reflect that policy because I think it will give an added driver to the renewable heat market which is a very important market.

Q183 Mr Jones: Mr Edwards, if I can quote from your written submission: "We share the view of the Welsh and UK government that onshore wind will be by far the most important renewable technology in relation to the 2010 targets." Upon what evidence do you base this view?

Mr Edwards: At the moment it is the only economically viable, readily deployable renewable energy technology. I think this is reflected in the interim planning policy statement, the ministerial policy statement, and I think it is widely accepted that it is the only large-scale renewable technology that can be implemented fairly quickly. It is very difficult to justify biomass for electrical generation on economic grounds at the moment, although with changes in fossil fuel prices it is becoming more attractive. The technology in the UK is not as mature, it is not as well-known, although in some parts of northern Europe it is very well-known, and I think if the economic conditions were better biomass could become a lot more significant. There are problems in the planning system with biomass. The planning system will have to accommodate certain changes, but the reason I made that statement is that at the moment it is the only technology that can be deployed at any scale, certainly within the 2010 time horizon.

Q184 Mr Jones: That is specifically onshore wind of course.

Mr Edwards: Yes.

Q185 Mr Jones: This is not coloured by the fact that you are not now independent consultants but you have actually signed up with an Irish ---

Mr Edwards: --- No, absolutely not.

Q186 Mr Jones: --- just let me finish. You know what I am going to say but I might as well say it. Because you have signed up to a three-year deal with an onshore wind power company?

Mr Edwards: No, that was a purely commercial decision.

Q187 Mr Jones: Yes sure, but it does damage your independence somewhat, does it not?

Mr Edwards: Yes. I think it is fair to say that. I will acknowledge that, sir, yes.

Q188 Mr Jones: How is onshore wind superior to other forms of renewable energy, and you might as well add into that offshore wind as well?

Mr Edwards: Superior is a difficult concept, a difficult word. It is the most readily available, it is a technology that is understood, and t can be deployed at a fairly technically large scale. It is not necessarily a superior technology; it is the one that is most available in order to meet the 2010 target. Offshore wind has a number of technical problems and, quite frankly, the cost is significantly higher. In the longer term looking towards the 2020 target, yes, I believe that much larger scale deployment of offshore wind turbines will be possible. One of the technological barriers at the moment is depth of water. At the moment ten to 15 metres depth of water is about the most readily achievable technologically. However a lot of research and time is going into looking at much deeper areas.

Q189 Mr Jones: You can show us your remaining independence, Mr Edwards, by telling us the problems with wind power.

Mr Edwards: There are not any! No. The problem really is that the deployment of larger scale wind turbines does occupy quite a large area of land. Spatially although less than 1% of the total land area looking round the border of a wind farm is taken up by the turbines, they are big and some people do not like them. I think one of the major drawbacks is that they are big. Wind is not an urban technology. Other forms of generation - gas turbines and, by and large, large power stations - are urban technologies and they sit into an urban environment. Wind does not sit easily into an urban environment for a number of technical reasons. One is the turbulence caused by buildings and also because of the sheer size and scale of them. You can deploy them on a smaller scale in an urban environment but to get that large deployment you need large areas of uninterrupted wind flow and those naturally occur in a rural environment. They do have some effects on the ecology. They require careful planning. Most of the ecological impacts can be mitigated by careful siting. The other issue that is often cited is noise and again, inappropriately sited, they can produce a noise nuisance. However, if industry guidelines and proper noise assessment is carried out, noise is not the issue that it was in the early days of wind turbine development. Significant technological improvement has taken place to wind turbines specifically to make them quieter. I think that in a nutshell is the drawback.

Q190 Mr Jones: You missed a main one which is of course they are intermittent. You are not going to close down any traditional power stations at all.

Mr Edwards: According to the latest figures, for a 10% deployment of wind it would require something like 6% to 8% of the wind capacity as back-up. It is a very complex subject but the latest research that has been carried out I believe by Manchester Institute of Technology shows that up to 10% on a grid system would require something like 6% of the wind capacity as back up because it is highly unlikely that across the country you would get all the wind turbines shut down all at the same time.

Q191 Mr Jones: Right, but it is possible?

Mr Edwards: It is highly unlikely.

Q192 Mr Jones: That is what they said about the Titanic sinking, Mr Edwards! Can I just move on. I think we have established that industrial wind farms have a problem. You touched on the urban use of wind but you are still thinking industrially. What about smaller turbines on every household in Wales? I know you cannot put them on them all because some of them are blocked off from wind, but that would generate probably more than we are even envisaging at the moment in realistic terms.

Mr Edwards: But how acceptable would that be to the planning system because of the visual impact of it?

Q193 Mr Jones: Change the planning system. There is obviously a lot less visual impact than 200-foot high turbines in our most beautiful areas, if I might say so. If I can move on now. How much of Wales's electricity/heat is currently produced by wind technology?

Mr Edwards: As a percentage I am not sure. The most recent figure I could get was there are 235 megawatts of installed capacity across Wales.

Q194 Mr Jones: And how much would that need to increase to meet the 2010 renewables target?

Mr Edwards: The Welsh Assembly target is 800 megawatts by 2010, so it is an increase by 560 megawatts.

Q195 Mr Jones: Okay, do we have any figures? You mentioned 235 megawatts. Is that 2005? Do you know when that figure relates to?

Mr Edwards: That is the latest figure I got yesterday from the British Wind Energy Association who do keep good records.

Mr Jones: That is fine, thank you.

Q196 Chairman: Could I follow up on one of these questions in relation to industrial or urban wind farms. You have not referred to the impact on leisure and tourism. I have a particular interest coming from where I come from in the South Wales Valleys where we are emerging after our industrial past the coalfields and in my county Aberavon it is envisaged through TAN8 that nearly 40% of all new wind farms would be in that area from the (?) Valley across to the Rhondda. It will have quite a significant impact on leisure. What is your observation on that?

Mr Edwards: I live in mid Wales and again we are quite dependent on tourism, particularly, for want of a better word, "green" tourism. People come to Mid Wales for leisure activities like mountain biking and walking. We have got a fairly high density of wind farms in the Mid Wales area and a lot of development in the 1990s/early 2000s. It certainly does not appear to have affected tourism. I think if you look at the mountain bike industry in Llanrwst (?) it has grown remarkably. It generates a lot of income for the town. That has started since the opening of the wind farms adjacent to Dffryn (?) Valley. I personally do not think from what I have observed in my own home town there has been any negative impact on tourism because of the construction of wind farms in the area.

Q197 Chairman: You are not suggesting that the mountain bikers are coming there because of the wind farms?

Mr Edwards: No.

Q198 Chairman: It sounded like that.

Mr Edwards: I apologise for that. What I am saying is that the mountain bike industry has grown up following the introduction of wind turbines and certainly research that has been done UK-wide into the impact on tourism does not indicate that wind farms, for instance in Cornwall, have substantially affected tourism or even at a local level there has been any discernable change in the number of visitors, for instance to the north Cornish coast, since wind farms were built in that area.

Q199 Chairman: So the logic of your argument is that we should not worry at all about them being in the Brecon Beacons National Park or on the Pembrokeshire coastline or in Snowdonia National Park?

Mr Edwards: No, I did not say that. I value the wild places of Wales as much as anybody. I am a very keen mountain walker. Wind turbines have no place in national parks. That is my personal opinion and I think the planning policy is correct there. They have got no place in national parks.

Q200 Chairman: So those of us who value the beauty of the South Wales Valleys should begin a campaign for a national park or an area of outstanding natural beauty then?

Mr Edwards: Yes, if you are opposed to wind turbines.

Chairman: I did not say that but it is a good idea, I will take that from you then!

Q201 Nia Griffith: Could I just pick that up. Supposing the planning things were sorted out, would you see a lot more potential for micro generation?

Mr Edwards: Yes. I think both businesses and individuals are becoming much more aware of the imperatives of climate change, and I think people are willing to put their hands in their pockets. The problem at the moment (because they are low-volume technologies) is that the costs of production are quite high. Small wind turbines, PV, is very, very expensive and you have to be a fairly rich householder. Even with a grant, you have to be in a fairly high income bracket to be able to afford it. I think if production could come down and with some subsidy, yes, I think people are willing to.

Q202 Nia Griffith: And put them on buildings and things?

Mr Edwards: Yes, it adds very little. For instance, the obvious technology, solar thermal/solar water heating, could provide more than half the domestic hot water requirement in the UK if there was some sort of imperative on developers, for instance as they have in the Netherlands where for new developments a lot of the local authorities have said x% of the houses will have to have a southerly aspect so that PV and solar thermal can be deployed either now or in the future. Those are very simple measures that do not cost very much which can have an effect.

Q203 Jessica Morden: You talk in your evidence about the poor history of planning consent between 1999 and 2003. Can you give us a sense of how many applications were made in Wales in comparison with how many were made in the UK and expand a bit on that?

Mr Edwards: Yes I can. I did a bit more research on that yesterday afternoon. I have got the figures now. The up-to-date figures are slightly different for 2000 to 2005. For Scotland there were 54 decisions and 71% were granted. For Wales there were 24 decisions and 42% were granted. In England there were 55 decisions and 67% were granted. In Northern Ireland there were five decisions and 100% were granted. I am quite happy to write that down and send it to the Committee Secretary.

Q204 Jessica Morden: And do you want to expand on this disparity?

Mr Edwards: I think Scotland had a very robust planning policy towards renewables. It was the first of the national governments across the UK to come out with planning guidance and it was very, very strongly in favour of renewable energy. England came next. PPS22 pre-dated TAN8 and I think because it was out in the consultation phase it then became material to the planning, not as material as obviously when it had been adopted but right from the consultation phase it was material and therefore planning committees were taking cognisance particularly of the greater weighting given the need for the development over the local impacts and I think that is part of the reason. I think part of the reason goes back to the apparent public opposition to wind farms in Wales which is still not borne out by public opinion surveys and it is a bit of paradox still. I think those are the two reasons for that period 2002-05.

Q205 Mr Crabb: In your written submission you mention "the unfavourable economics of biomass in electricity production". Can you explain that a bit more, please?

Mr Edwards: Because of the capital costs of plants, the cost of fuel, it is very difficult to generate electricity that can compete. Even with the support of the Renewables Obligation Certificate it is very difficult to produce electricity that is able to compete in an open market for electricity. I think it is as simple as that. However, things are changing. The market price of electricity over the past couple of years has been very low. In response to rising fossil fuel costs, that is changing. The bulk price of electricity has gone up. I am not sure of the percentage but it has gone up dramatically over the last 12 months. I wrote this in December and that was basically on last year's perceived wisdom. I would hesitate to say it, but at the moment if you had a look at it you would find it was converging to the market price for electricity and hence making biomass more attractive.

Q206 Mr Crabb: Do you see much else on the horizon other than electricity price, including perhaps technology, that might make biomass more economically viable in the future?

Mr Edwards: Yes, the big trick with getting biomass to work is to find a use for the heat. Basically, as in any thermal generation system, you are throwing away about two-thirds of the energy you have got. For instance, in biomass you are throwing two-thirds of the energy in the wood away as heat. If you can find an economical use, ideally for all of that but even part of it, it becomes a lot more viable. District heating up until now has not really been viable because of the relatively low cost of oil and gas. However, we heard in the last couple of days that British Gas are probably going to be putting their prices up by 25% in 2006. That will certainly make the biomass industry go back to its sums again and see how viable district heat networks are becoming. I think that is probably the biggest breakthrough, and not in technology. I think the biggest breakthrough is going to be in the use of the heat and examining where the biomass power plants are situated. If you can situate them adjacent or very close to a large industrial heat user, as indeed has happened in one example in Wales and I am aware of two others that are being looked at quite seriously where there is a big heat load adjacent to a potential biomass scheme, I think that will be the first breakthrough.

Q207 Mr Crabb: Do you know how much of Wales's electricity and heat is currently produced by biomass technology?

Mr Edwards: No. Electricity - very little, if any. As far as I know at the moment, there are no electricity generating plants. It is very, very difficult to quantify what Wales's heat needs are. All I will say on this is from other own observations within our biomass business we are getting a huge increase in very, very serious interest in biomass heating technology.

Q208 Mr Crabb: Is there a difference, do you think, between biomass for electricity and biomass for heat? Is there a risk that the emphasis on electricity rather than heat has closed the eyes of the policy-makers to the local economic benefits of wood fuelled biomass in particular?

Mr Edwards: Unequivocally, yes.

Q209 Nia Griffith: Can we move on to hydro. Have you got any ideas of, first of all, the percentage level of energy that is currently produced by hydro and how much is it envisaged this might be able to increase perhaps under the Renewables Obligation?

Mr Edwards: I am sorry I do not have the figures at my fingertips on the percentage of energy that is produced but I did have a think about this last night and I think you have got differentiate between things like the Dinorwig scheme, which is effectively pump storage therefore it is using more energy than it is producing. It is a balancing mechanism to secure, if you like, greenfield generation. There are very few large-scale pure generation plants in Wales. Npower have one in Dalgarrog and a number of satellite stations in Snowdonia and there is the tidal scheme run by E.ON. I guess those amount to about 50 megawatts together. There are a number of smaller schemes and I think the opportunity for Wales here is with the smaller schemes. There are very few schemes of greater than one megawatt available in Wales that are technologically possible to engineer and environmentally acceptable. However, there are a large number of schemes certainly in the 100 to 300 and possibly the 200 to 500 range, in that medium range. The estimate that was put in the study carried out in 2001 at about 20 megawatts I think is probably a reasonable estimate of the new exploitable hydro. There is another scale which is very interesting and again almost unquantifiable and that is the small, domestic, single on-farm hydro schemes in the ten to 100 kilowatt range. Wales has a long history of using water power in rural areas. It is something that I know in my area farmers are very keen on doing.

Q210 Nia Griffith: How would you see the way forward with that? What do we need to do to make it happen?

Mr Edwards: I think the conditions are quite favourable. I did mention in my submission that there have been problems in the past with the Environment Agency and the Precautionary Principle. However ourselves and the British Hydro Association have worked very productively with the Environment Agency and there has been quite a meeting of minds and it is now relatively easy to get an abstraction licence providing you understand the restrictions that the Environment Agency are going to put on that and you select a site where you still have an economic scheme with restrictions on the amount of water you can abstract. The planning policy and planning arena is generally favourable to small hydro. I think one area for the very small hydro schemes where there is a grant available is through the DTI Clear Skies programme, but it is quite small. On a personal note, I was offered £5,000 if I were to exploit a hydro for my own house and the commercial cost would have been about £60,000, so it is not a huge contribution. There are some interesting schemes coming along in North Wales under Objective 1 to support local landowners in the construction of hydro schemes with quite a large capital subsidy. I think there is evidence that that is kickstarting that market. I think the only thing is greater access of good quality, independent information to landowners on how they can develop their own hydro resources.

Q211 Mr Jones: Can we move on now to photovoltaics. We have not spoken about those yet. The DTI have brought out some funding support but it seems to be quite short term and aimed at larger projects. How do you think that is going to affect the use of photovoltaics on a wider basis in Wales?

Mr Edwards: The various PV support streams over the past three years have seen a dramatic increase. They have had a very profound effect to such an extent that at the moment it is quite difficult to buy PV panels. However, the last stream is coming on, I believe, in March 2006, so we are looking at the end of the support programme. It has increased the uptake and it has forced down the price of PV panels. However, the market has flipped other way and now there is a scarcity of PV panels which inevitably will push the price up. What happens next I am not sure. I understand that it is going to be subsumed into a micro generation support policy. The Welsh Assembly is looking at this independently at the moment. I do not know. We have done some work for OCTO in setting out, if you like, the roadmap of where the Welsh Assembly ought to be going, but I am not sure exactly where that support mechanism is going. I think if the support mechanism is taken away completely it will fall flat. I do not think the industry is strong enough to be competitive against other technologies without support, and that is not just in Wales, that is UK and Europe.

Q212 Mr Jones: But it is to be hoped that will improve as the price of photovoltaics comes down?

Mr Edwards: Yes.

Q213 Mr Jones: We have spoken about wind biomass, hydroelectricity and photovoltaics. What other areas have you looked at as a company? I am thinking particularly about deep-drill geo-thermal technology.

Mr Edwards: We have not looked at geo-thermal. The area we are looking at at the moment and trying to work out, to be blunt, where our commercial niche can be is in marine technologies - tidal and marine current turbines - and particularly the regulatory environmental impact of them, which as yet really is unknown. I think Wales is well-placed to become quite an authority. We have some very exciting schemes happening in South Wales. We also have two universities whose skills and experience in marine biology are world renowned. That is Aberystwyth and Bangor. We are already talking to Aberystwyth and Banger to see how we can link our expertise, and I think other Welsh companies are doing it as well. For Wales, I think marine technologies are the ones that will offer a future. I certainly hope the Welsh Assembly would support that. It is going to require support. They are technologies that are not commercially proven. There are a number of technical problems and no doubt there will be a number of environmental problems that nobody has realised.

Mr Jones: Thank you.

Q214 Chairman: Thank you very much for your evidence and for your memorandum. If you feel that there is additional information that you would like to share with us in a further memorandum we would be very pleased to receive it, particularly on the last point you were making.

Mr Edwards: Thank you very much.