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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