Select Committee on Environment, Food and Rural Affairs Minutes of Evidence


Examination of Witnesses (Questions 300-319)

MR JON PRICHARD, MR SEAMUS HEFFERNAN, MR LOUIS ARMSTRONG AND MR MARK GRIFFITHS

22 NOVEMBER 2006

  Q300  Chairman: Where do you think we have the technology which is under-utilised?

  Mr Prichard: I think I would have to come back to you in a written answer because that is not necessarily my expert area or field.

  Q301  Chairman: Okay. Have you done any work at all in looking at the R&D input into this area, whether it be from government or private sources? Are we spending what we should be spending?

  Mr Prichard: Our view on R&D is that more could be spent and I think we have stated in the past that if you were to, say, commit 1% of the overall worth of the sector into R&D then you would look at increasing R&D. We are encouraged by the expenditure on things like the knowledge transfer networks, although they are fairly young and are being established and some of them have yet to prove how effective they can be. So there is encouragement and we note that there has been a gradual move away from the discipline-led research and development, central funding research and development, particularly in construction, and a move toward the thematic research and development. Where that is leading us, certainly within the civil engineering construction area, is that it is possibly leading to a shortfall in what we call the near market-type research, which is the actual research which takes the technology to the deliverable through the development of standards.

  Q302  Chairman: I want to bring you back to your evidence, paragraph 8, and I have to say I found just a hint of tentativeness in what you were saying. There is a sentence which I discovered where you said, "However, the skills-base necessary to maintain and install a high number of small-scale CHP schemes may be lacking." Well, it either is there or it is not there, and that is just an example. I wanted engineers to be a bit more forceful, so let us go to the area where again you are a little bit tentative, paragraph 14, where you say, "Low-carbon options that could be considered for the local level," which sounds as if you were saying, "I'm not prepared to back a winner here, but we are in this business." You say, "Ground heat recovery, solar heating and photovoltaics." Those all exist, but the big barriers, as you heard from our previous evidence session, is the cost of it. I want to hear from the engineers what is going to be done to lower the cost, to make these things more acceptable as investments by the citizen for the purpose of reducing their energy throughput. What can you tell us engineers are going to do to achieve that objective in a relatively short timescale?

  Mr Prichard: Like any other sector in the UK, the engineers will be market-led, unless there are inducements to drive down the unit cost—and that either comes from market take-up or it comes from a scheme such as the Renewable Obligations Certificate—then you are not going to get market inducement for that to happen. We cannot force the market. Picking up on that point on skills, I think that is a significant issue and when you look at the engineering skills base which is out there, there are undoubtedly current shortages.

  Q303  Chairman: I hear what you say, but let me go back to your paragraph 14, the mouth-watering little sentence in parenthesis which says, "Any technology options should be considered in terms of their lifetime cost and global carbon emissions." Yes, I do not disagree with that, but what I do not see here is you saying that engineers in the United Kingdom are working on this, this and this, which could have the effect of dramatically changing the affordability of these things. For example, on photovoltaics, we went to Leicester to see the reality and the reality is £9,500 or a 46½ year pay-back period for the ordinary person to install this equipment on their house.[9] Does engineering have anything to tell us that that bill could come down in a meaningful timescale to encourage the punters to save up and put photovoltaics on their houses?



  Mr Prichard: There is nothing that I am aware of in the offing at the moment that will say that will come down. As I said earlier, you need to have the market conditions that will drive the price down. You cannot just expect the industry to commit to this at this stage because it has not yet broken into that virtuous circle that reduces price.

  Q304  Chairman: This is a bit like the argument on computers or mobile telephones. People started off but the penny always drops with technology that if you start off with selling—my first computer when I arrived in the House of Commons 19 years ago was £1,800. It had a 20 megabyte hard disk and an eight megahertz processor and that was state of the art IBM PS2. Now, you would be an idiot if you paid that kind of money. You would get that in a games machine, and infinitely more. So what has happened is that people know by example that if you reduce the price of hi-tech it rapidly becomes acceptable technology and lots of people buy it, but I do not see the thing happening in an area which is currently the number one priority for goodness knows what body.

  Mr Prichard: If you look at being the number one priority, I would question that because if you look at the amount of money which is going into the research budget in universities where you create these spin-off companies that start developing these technologies, then actually because the university budget has been spread so thinly across the board—and EPSRC[10] I think are struggling in this respect—there perhaps is not enough funding going on to generate the innovation that you require.



  Q305  Chairman: So you are saying that if we are going to make these tools more popular and more affordable, the ICE is saying that there needs to be more basic research done at universities to achieve those technological breakthroughs? Is that right?

  Mr Prichard: We would encourage a review of how the EPSRC funding is committed.

  Chairman: A review. All right.

  Q306  Lynne Jones: Can I ask something on photovoltaics, because the argument has always been that if there is a commercial market—and I note your point about basic research but generally on these technologies there is a technology which exists, just as there was with computers, and it is a question of improving and refining, and largely these are commercial decisions based on demand. I have been reading recently that the demand for polycrystalline silica for use in photovoltaics is actually increasing the price because there is a shortage of this material. I thought, well, silica just comes from sand, so why is there such a shortage of this basic material?

  Mr Prichard: I am afraid I am not a materials engineer, so I cannot really comment on that.

  Q307  Lynne Jones: I have heard that there is some new technology being developed?

  Mr Prichard: I am aware that there is new technology, but I am not in a position to say what is the best—

  Q308  Lynne Jones: Is there anybody in your Institution who might be able to answer that question?

  Mr Prichard: I think you are talking about manufacturing and electrical engineering, and we are civil engineering. Therefore, we can find out for you, but I do not have that answer here.

  Q309  Chairman: You are good at finding out. Mr Griffiths wants to give us an answer.

  Mr Griffiths: I hesitate to tread on somebody else's territory—

  Q310  Chairman: Do not hesitate, no, leap in, Mr Griffiths!

  Mr Griffiths: —but I do try to read around this subject and you are quite right, there are some interesting developments taking place which may increase the efficiency of solar panels by a factor of five, using nano-technology and film technology. Clearly, if that happened it would have a very significant effect on the way we are able to generate electricity, but I think what the general discussion illustrates is that as far as the commercial sector is concerned it will be driven by the immediate cost of other sources of electricity or energy and broadly speaking fossil fuels are relatively cheap. I think where, as a society, Government can play a role is to say, "Okay, we are not at that point where these things are competitive and therefore we can't expect the private sector necessarily to deliver the goods immediately, but we can actually pump prime the research, in other words to encourage some risk taking which perhaps the private sector would not take," because the private sector tends to be relatively short-term in its outlook, returns to shareholders, and so on. So I think that is where we have to look at getting a move on and I think that is where Government can take a very strong role.

  Q311  Mrs Moon: I am hearing some very interesting stuff about risk taking and pump priming, but at the same time the previous representation we heard talked about the subsidy which the existing energy companies are getting from their customers to roll out things such as the energy coming down from northern Scotland. If you are new and you want to get into this ballgame, if you are a new technology company, a new green technology company, the sort of company which people are looking for to sign up to to buy their energy from, there seems to be a huge, high level of risk. There does not seem to be an awful lot of subsidy from the consumer to them. So you have got to put the money up front to create the technology, you have to put the money up front to go through the planning system to get all of the different certificates you have to get before you can even put in your planning application, and then you do not know what you are going to get in terms of sale when you sell on your electricity to the grid. What can we do, what are the barriers which need to be removed to facilitate those green energy companies coming into the system and allowing us to get the technology, getting the plants on the ground so that we can actually buy the electricity they are seeking to generate? How are we going to move that along so that we actually get the market operating in a way which is effective for the new technology to operate? I am sorry, there is a lot there.

  Mr Armstrong: Might I start, Chairman? One point strikes me here, and I think it is a bit of a chicken and egg because it seems to me if the Government says it is genuinely committed to forcing both companies and, if necessary, individuals to meet the climate challenge and deal with the issues of supply and demand of energy as two aspects of meeting that climate challenge, and if you can then get this bandwagon going which makes the companies, the venture capitalists, those investors who are investing in green technologies (some quite big names from Richard Branson to Robert Cambridge), take big slices of their investment money and put it into these technologies, it seems tome that the climate of risk which you rightly articulate will gradually evaporate. It is 30 years since Greenpeace was regarded as the al-Qaeda of eco-terrorism and beyond the pale. Every company worth its salt had anti-Greenpeace units within them, every oil company certainly did. I think now that seems like two hundred years ago. Now we are so different in our mindsets that I think the market forces will need to have it made clear, and Ofgem will clearly play a part here in saying, "This is going to happen. We are going to diversify. There will be incentives, whether they are different sorts of fiscal incentives within the Corporation Tax regime, VAT, whatever it takes." There will be ways, one hopes, where this will progressively, and quickly I hope, come to pass, but I think it is the chicken and the egg. You have to create the impression that this will be mainstream, that we will have cheap photovoltaic cells all over our roofs (except in conservation areas perhaps) within 10 years, and that we will be doing things completely differently from what we do now. We will have to do that. Then I think you will find those assessing the risk in their investment in new technology and their willingness to put money up front would have a different sum at the end of their calculations in a year or two's time than they would today. That would be my assessment.

  Q312  Mrs Moon: When you started your presentation you talked about planning regulations, and one of the big barriers that you have to get over is the planning application and you have to take the risk of developing your new technology, getting your investors to back you, do all the planning applications and getting your certification. What can we do? What do you think are the important things to simplify the planning application process, bearing in mind that if Government actually says, "We are going to take away the power from local people to make their local decisions," there will be uproar. How do we simplify it while at the same time not removing local democracy and local decision-making?

  Mr Armstrong: I think coming up with a national strategic framework for what is essential for the nation and where individual committees will have perhaps less of a say in the holding up of what is deemed to be strategically necessary is going to be part of the political debate, I expect, after Kate Barker's review and others have reported. I think you could do a number of things at local level to start with. Outside conservation areas you could remove the need to have individual planning permission for things on your roof, the micro-generation points you were talking about earlier with Ofgem. I think there will be a simple chain. It could be done under a general permitted development order. It would not need to be individually applied for. You would have issues with historic buildings in some sensitive conservation areas, but I think they could be dealt with under that legislation quite adequately. I think you could have presumptions in favour of certain things happening and make sure the Secretary of State is involved in supervising the power lines, the visual impact of offshore wind farms in your own constituency. I think you could have various presumptions. So we are having a presumption in favour of this, and the planning policy guidance could be quite clear, and we would need considerable persuasion that the local interests and the individual interests should prevail over this national war on climate change, because you will all be the losers if you are too NIMBY-ish or too selfish. So again it is part of this attitudinal and educational shifting of the mindset of the population. It is easier said than done, but I think we have to try. Mark has some ideas on specific issues. He is an expert on the countryside planning areas as to what might need to be done on power lines or other things.

  Mr Griffiths: I think the question you have raised raises two contexts. One is the micro side, which relates to individual households. Then there are the major infrastructure schemes, such as offshore wind farms, or onshore, which are really two different kinds of question. I think the latter is going to be much harder to deal with because people support green energy but they do not want to see the wind farms, and so on, and some of them are extremely large. Technically it is less of a problem with offshore. There is less impact on the landscape, but then you have got to cable it a long distance. We heard some interesting figures before about the potential for micro-generation and these types of apparatus are much smaller in scale. We have around the country even one or two industrial estates which have their own wind turbines and actually people have come to quite like them. So I think probably the micro end of things is easier to deal with than the very large infrastructure projects, but offshore wind is clearly a better bet than onshore, where there are some very contentious battles which take place.

  Q313  David Lepper: Can we just concentrate for a little while on household energy efficiency? I am not sure, Mr Armstrong, I agree with you in leaving conservation areas out of the résumé you were giving us about changes in planning regulations. I represent a constituency which has conservation areas with some of the oldest, least energy efficient houses in them which might well benefit from some of the things we have been talking about. There was mention by Mr Prichard, I think, of a change in the Building Regulations for new homes and I think thermal efficiency, heat loss measurement, was one of the important aspects there. There is a bit of research which I think we were made aware of which showed it is likely that sixteenth century buildings leaked less air than many modern day ones. I am not sure how anyone made the comparison, but there we are. What do you think will be the effect of the revised Building Regulations and the introduction of energy performance certificates in helping to deal with issues of thermal performance in new housing? Will they both have a real impact?

  Mr Prichard: I think in terms of our initial response to the Building Regulations, we felt they could have been harsher than they were, or more onerous than they were, and I think there was a little bit of disappointment that they missed one or two opportunities. At the end of the day they are an instrument which will start improving the levels of insulation in housing. The concern which we have comes back to the skills agenda in terms of the ability of Building Control to assess the performance of the quality of the construction, because it is all very well building and complying with the regulations, but if the building then subsequently does not meet high performance standards, if you leave cold bridges in the structure then actually you have wasted your time, and at the moment there is perhaps a lack of competence in some areas and a shortage of suitably qualified people within Building Control to sign off to say that this is being done. So that leads us, I think, to that next stage, which is where the energy performance certification comes in, because that is an opportunity to have proper assessment of the performance of the building to see whether or not it is performing as it was designed to. Of course, energy performance certification can also be applied at the point of sale to existing housing stock, so you can start influencing the market. So I think we are genuinely supportive of valid certification.

  Q314  David Lepper: Is that going to be a slow process in changing things?

  Mr Prichard: I think it probably is.

  Q315  David Lepper: It sounds as if you are saying the skills base to ensure it is done properly in the first place may not be there, or there may be a bit of corner cutting, therefore it is when you come to the level of certification that the kind of policing comes into operation and that might put the pressure on the builders, the developers, or whoever, to ensure that they do the job better in the first place. But we are talking years, are we not?

  Mr Armstrong: I think if you took the view that new housing is 0.2% of the existing housing stock each year, so you are only adding 1% of the housing stock every five years, it will have an effect, including the new Building Regulations, as the Minister for Housing and Planning has said, and I think the Home Builders Federation has agreed that they will meet the best European standards, or thereabouts, from January of next year. But the real challenge is the 22 million homes we have, and I agree, I think the sixteenth century homes with judicious use of all sorts of straw and various things have proved surprisingly effective in retaining heat. I think the real challenge is how you tackle that. As Jon has said, the energy performance certificates would affect perhaps 1.5 million homes a year, that sort of figure for the sale of homes. It would then be important to encourage everyone to have a performance assessment done, irrespective of whether energy costs rise much greater, so that they could see for themselves quite how inefficient their home was and be advised by the one-stop-shop advisory service you touched on with Ofgem, which I think is essential, the clear guidance which is going to be needed, to say, "Well, you could spend a certain amount and transform your energy performance." We should, I think, also look at council tax rebates. There is nothing like money to change behaviour, and the success of the scheme in Braintree with British Gas and offering up to £100 rebate on council tax should be extended elsewhere. I think it is something which would really capture the imagination of everybody if they could see a direct correlation between their taking energy efficiency in their homes seriously and the amount of council tax they paid, because otherwise the pay-back periods, 10, 14, 15 years, perhaps 20 years for some investments we have touched on, the cost of photovoltaic roofs and how long it takes to get that investment back in energy savings, people will not do it voluntarily and they will not do it quick enough. So it is much too slow on a voluntary basis. It needs some carrots, it needs some incentives, and the best way, we think, is to combine existing grants (which some local authorities still give for insulation) with a widespread use of council tax incentives. It need not be very great, symbolically is as much as anything, I think, with some reduced price technology and some very good special offers and deals to get people interested and think, "Oh, my neighbour's got this and that. What a good idea. It will save me a fortune and why don't I do the same?" It is speeding up the process.

  Q316  David Taylor: One of the objectives of the RICS is to catalyse the highest standards of education and training for those involved in land, property construction and environmental issues. That is right, is it not?

  Mr Armstrong: Yes.

  Q317  David Taylor: You were entirely supportive of the review of Part L which came in in April 2006, the various conclusions which were reached, were you?

  Mr Armstrong: That is not my special area. We were broadly supportive, but I think, as Jon said, you can always do more with Building Regulations. Our housing stock is some of the worst quality in Europe. Our Building Regulations are still not up to the best European standards, and I agree with Jon, there is a long way still to go, I think.

  Q318  David Taylor: Where professionally then lies the responsibility for things like healthy buildings and the aesthetics, the look of the finished product? Where does that lie between the two professions which are represented here?

  Mr Armstrong: I think you would have to start with the Commission for Architecture and the Built Environment to put pressure on all the developers and the architects to have better quality design. On the planning committees of local authorities and the planning officers, the professionals, to raise their game in what they are prepared to accept aesthetically, and I think to accept that the home builders—and I think they would probably now admit this—have got away with some pretty tacky and unappetising designs because of the supply and demand where people are prepared to buy them. I think now they are improving, but the countryside is covered with things I do not personally—

  Q319  David Taylor: I am sorry, Mr Prichard, do you want to say something?

  Mr Prichard: In larger structures there are a number of schemes available for assessing the quality and the Construction Industry Council has a sponsored an initiative called Design Quality Indicators and that has been rolled out in the building skills programme and the Department for Education has signed up to that, and in fact it has been so successful in the UK that it has been exported to the United States. There are also building and performance certificate regimes, such as BREAM. So I think there are a number of performance regimes for larger buildings but there has not been one at the bottom end of the scale in domestic housing.


9   The Committee visited Leicester on 18 September 2006. They visited the EcoHouse, Braunstone "Solar Streets" and Eyres Monsell Primary School. Back

10   Engineering and Physical Sciences Research Council. Back


 
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