Examination of Witnesses (Questions 67-79)
RENEWABLE ENERGY
ASSOCIATION
17 OCTOBER 2006
Q67 Chairman: Gentlemen, thank you very
much indeed for coming to this second part of our first evidence
session on local energy generation. At least that is the title
we are flying under at present. As you are one more than I expected
it is all the more important that I give you the opportunity,
after welcoming you and thanking you for coming, to introduce
yourselves.
Mr Wolfe: Thank you. I am Philip
Wolfe, I am the Chief Executive of the Renewable Energy Association.
We represent some 500 companies in the renewables field across
the full range of technologies: renewable power generation, renewable
heat and renewable transport fuels. As normal when asked to appear
before you, what we try and do is bring together people who are
active in the sector, so I am joined by three of our member companies,
people with expertise in different parts of the renewables sector.
I will just ask them each to introduce themselves and say a couple
of words about what their interests are.
Mr Miles: I am Chris Miles.
I am the Managing Director of Econergy. We are one of the leading
environmental heating companies in the country. We supply turn-key
wood and energy crop heating installations to council buildings,
rural estates, larger commercial developments. We also sell heat
as part of energy service contracts. A key example—perhaps
we will come back to this—is the biomass cluster we have
in South Yorkshire where we have six boilers heating large buildings
in Barnsley, two in Sheffield and really one is starting to build
an economy of scale not dissimilar to what we have heard from
Woking.
Mr Lee: My name is Andrew Lee.
I am the General Manager for Sharp Solar, Sharp Corporation. I
represent both the subsidiary here in the UK and the factory facility
that we have in Wrexham. We manufacture solar photovoltaics for
use in electricity generation. We currently have a 110 megawatt
manufacturing capacity based in Wrexham employing 386 people.
We plan an expansion over the next few years. Obviously our interest
here is to look at planning regulations, make sure you understand
the purpose of manufacturing investing in the UK, people in the
UK and your interest and your plans in the future.
Mr Paine: My name is Andy Paine
and I am head of onshore wind farm development in Great Britain
for Renewable Energy Systems UK Limited. Renewable Energy Systems
is a wholly-owned subsidiary of Robert McAlpine and we have been
active in the research and development area of wind farms for
25 years. We developed the second project in the UK back in the
early 1990s. Altogether, both in the UK and overseas, Renewable
Energy Systems, otherwise known as RES, have developed something
like 1,300 megawatts of wind capacity. My interest in being here
is really to talk through some of the barriers to development
that we are seeing in our business.
Chairman: Thank you, gentlemen. As I
said to you privately, and I will repeat it publicly, it is tremendously
helpful in answering questions if one of you could where possible
answer each question otherwise we will not get through what we
want to get through before 12.30. You have answered my first question
so I will go straight to Mike Weir.
Q68 Mr Weir: Your submission differentiates
between the theoretical, practical and economic potential of renewable
energy. Can you define these terms for us?
Mr Wolfe: The theoretical potential
is linked to the amount of resource available and a large number
of the various renewables could generate pretty much all of the
energy that we need in this country if you look at it on an annualised
basis. For example, a study in the early 1990s showed that if
we covered the facades and roof spaces of our existing buildings
in the UK with photovoltaic panels we would on an annual basis
generate all of the electricity that we use as a country. Similar
studies show that wind can produce a very large proportion of
our energy. If you add all those together we have the resource,
the potential, to generate far more energy in total than we in
this country use. The theoretical potential is just related to
the amount of resource. The practical potential then looks at
issues like connectability and what have you and the economic
potential further factors that down in relation to what one could
afford to pay for the energy.
Q69 Mr Weir: We have heard from previous
witnesses that much of this technology is perhaps not quite there
yet and is some years away. We are trying to get some idea of
the practicality of, say, microgeneration from wind to domestic
CHP. What is your view on that?
Mr Wolfe: We believe the vast
majority of the decentralised renewables are already proven technologies.
I think one should not be hoodwinked into believing a lot of these
have a long way to go and perhaps Andrew and Chris might want
to comment on that. All the technologies represented here I think
would argue that these are fairly mature technologies.
Mr Lee: We have been manufacturing
solar PVs for 59 years now. You will notice in your own calculators,
let alone on houses, our first installations have been operations
both in Japan since 1963 and are still performing to date with
the original manufacture performance warranties. That is a history
we can go on, 59 years of actual installations. Our technology
has come on leaps and bounds since then and as an industry, just
the Sharp operation alone, we are turning over £2.5 billion
a year in solar panels. It is our third core technology as a corporation.
Mr Miles: On biomass heating it
is now the major source of new heating in Austria, it is the leading
one. Our largest supplier in Austria, Froeling, plans to ship
something like 20,000 boilers this year. In the UK its technology
is proven, the fuel supply is relatively new and installation
expertise is growing quickly. The market is very rapidly growing.
Mr Wolfe: Small scale wind is
a bit earlier in the chain.
Mr Paine: Small scale wind is
earlier in the chain. Certainly larger scale wind has delivered
successfully in the last few years. It took the industry 14 years
to get to its first 1,000 megawatts installed in the UK and 14
months to get to its second 1,000 megawatts, so certainly economically
it is fine and small scale wind is following.
Q70 Mr Clapham: Just looking at your
papers, your estimate of the practicable potential of renewables
in the heat and transport areas seems to be less than the estimate
for electricity, well less, is there any reason for that?
Mr Wolfe: Yes, and it is perhaps
somewhat misleading in that the work only looked at the potential
in the context of the national availability of fuel. In terms
of biomass heating and biomass fuels it looked primarily at those
fuels and biomass heating fuels that will be available, produced
locally here in the UK. Of course that is really restricting it
down unnecessarily small. If we restrict it to our gas as produced
here in the UK of course we will be in trouble already. If one
looks at the global availability then the figures on heat and
fuel could also be very much higher than they are.
Q71 Mr Clapham: Could I just ask
Mr Miles to tell us more on the scheme that he referred to in
Barnsley?
Mr Miles: Yes. He is from Barnsley!
Yes, in Barnsley we now have up and running two biomass boilers
heating something like 150 units in three tower blocks. We also
have a new boiler that was commissioned two weeks ago in a new
Westgate Head development which is a top quality town centre development
where the council will be residing. There is also a big library
there. It will be a centrally distributed heating network. There
is also a boiler going into the distribution centre at Barnsley
Council. The Council is also using their local arboriculture arisings,
that is their tree-clipping co-product, to feed back into the
Barnsley buildings. We are also about to stick a boiler into Barnsley
digital media centre. Now effectively Barnsley has a policy within
the council of proactively using biomass heating wherever possible
and using local woody resources initially to feed that. That is
a summary. It is a glowing example of what can be done when you
have a champion, a council, who really say, "I am going to
do this". I think it is the biomass heat equivalent of Woking.
Q72 Mr Clapham: Perhaps we could
visit Barnsley, Chairman.
Mr Miles: Absolutely.
Mr Hoyle: Save us! Save us!
Chairman: I will put it to the Committee.
Q73 Judy Mallaber: I was struck by
the comment in your paper that " . . . any householder who
succeeds in installing a PV panel or a wind turbine on his/her
premises and manages to benefit from the Renewables Obligation
is likely to require the entire skill set found in a specialist
renewable project development company." I thought we maybe
ought to look at some of the barriers to uptake both for householders
and more generally. Firstly, I would be put off by the idea that
for some projects I would need planning permission for developing
things in my house. I just wondered whether there is a need for
reform to the planning regime for micro and decentralised renewables?
If so, what are the issues we should be looking at?
Q74 Mr Wolfe: Can I take it
one stage further back. I think what we have to appreciate here
is that we are needing to change the paradigm. Our energy system
historically has been built up for very good reasons on a large
scale centralised base and we really need to move from that to
a far more decentralised system and that requires a change to
infrastructure but also a change to mindset in that when you are
doing things on a large scale and centralised, basically you can
build up large teams of very expert people to do big projects.
What we are talking about is a movement towards a far higher number
of smaller scale projects and therefore you cannot define the
same sort of skill base to them and you cannot use the same mindset.
As you rightly say, at the moment the people who have done it
have shown massive commitment to wade through a plethora of red
tape and overcome a lot of barriers. Really we need to sweep that
away and realise that what we are trying to do is break the mould
here. In terms of the individual planning considerations, for
example, I think it is unrealistic to expect individual consumers
to gain that level of expertise one at a time. Therefore, government
actually needs to step in and help them and it is probably appropriate
on things like domestic renewables to move away from the situation
where you would expect to educate the entire populace as to what
is needed and then to do it themselves and then, when you move
into things like building regulations, you make it a requirement
to fit renewables in certain instances. This has proved to be
very successful with condensing boilers, for example. Condensing
boilers have been available for a very long period of time, but
individual householders did not understand the difference and
did not get round to fitting them and individual plumbers did
not necessarily understand the difference and get round to fitting
them. Once it was made a requirement of building regulations,
the whole thing changed and it changed very fast and we believe
that at the consumer level there is a need to move towards regulation
like that, building regulations, and things like positive planning
and the sort of approach that has been adopted by Merton, for
example, where they have required 10% renewables in new builds
and in Kirklees now 15% and those councils who are using positive
planning to do it because it is not realistic to expect this to
be done purely because the consumer gets genned up at the necessary
level of information.
Q75 Judy Mallaber: Do we need any
changes in the planning regime, in your view, for larger-scale
projects or is it just at the very micro level that we need that?
Mr Wolfe: We need it at both ends.
Mr Paine: I think that is a very
valid point and we certainly do. Our business is the development
of distribution-connected windfarms and we notice that there is
a lot of inconsistency in the planning process in a number of
ways, and the timing of the decision-making is perhaps the most
prolific in terms of risks to our business where there is an obligation
effectively to determine an application within 16 weeks or there
is a right of appeal. Often the decision is delayed and delayed
and in some cases we have experienced planning authorities where
it is considered too difficult to actually make a decision. It
is the first windfarm application they have ever had to deal with
and they do not understand some of the issues, so there is an
education issue, I think, in that as well. We have other examples
of really quite extended times. You may be aware that there are
two planning regimes or consenting regimes for generation projects,
one of which is Section 36 of the Electricity Act and the other
is the Town and Country Planning Act. We have an example of a
distribution-connected project of about 70 megawatts in north
Lincolnshire which was submitted to planning under Section 36
in October 2003 and is finally heading for public inquiry in January
of 2007. Now, we do not have a problem with the decision-making
process that has got it there, but the issue we have is with the
time it has taken and we need to look hard at the timing of decision-making
and speeding it up. If we are heading for a route to public inquiry,
then we need to look hard at the decision-making process there
and, for example, rather than reinvent the wheel in terms of issues
that are looked at, some of the wider acceptability issues around
wind power are taken as read and the sort of need statement that
came out in the Energy Review is helpful in that respect.
Q76 Judy Mallaber: Would that not
remove the right of local people to object?
Mr Paine: No, one thing we would
absolutely want to ensure is that local authority and local input
is retained and we would not in any way seek to change that. All
the industry is saying is that the decision-making process be
speeded up, but that the standards are not changed at all.
Mr Lee: I think on our side we
are in agreement that there does need to be a change to planning
permissions. It is almost ridiculous that you can put up a satellite
dish, but you cannot put up a solar system which lies flat against
your roof and it can hardly be seen from the road. We have actually
run trials over the last two and a half months with Currys, so
we are educating the consumer. The response has been absolutely
overwhelming, so the consumer's education is already there and
what we need to do is bring the education back to the people who
make the decisions going forward. Every single one of those consumers
is coming back to us, saying that where they are struggling is
when they are trying to get planning permission, so you have got
people who are willing to invest in the technology and willing
to go forward and they are actually getting stopped by the people
who make the decisions in the end.
Q77 Judy Mallaber: We had a discussion
with Sussex Energy Group at the end of the session about smart
metering and they were making a very strong case for higher percentages.
Is the technology for areas like smart metering moving us towards
a more decentralised energy structure?
Mr Wolfe: Certainly the technology
is there and, as you heard, the costs can be high, but that is
an issue primarily of volume. Again it seems to us that this is
a sort of prerequisite and that really whenever meters are being
changed, they should be being changed for smart meters so that
it will facilitate a whole range of new technologies to be fitted,
monitored and used, so I think we would completely endorse what
they were saying.
Q78 Judy Mallaber: What do you see
as the main barriers to a widespread extension of the technology?
Mr Wolfe: There are several. Of
course there are planning barriers that we have talked about,
there is the issue of metering, there is the need for connection
agreements under certain circumstances for connecting electricity
systems and as far as heat systems are concerned, which is the
largest untapped resource in the country at the moment, we have
very little background in terms of the adoption of local heat
networks and we would see that as being one of the main areas
where we really need to up the game in the UK. For example, where
a new development is going in, and Thames Gateway was mentioned
earlier on, we believe that it should be a requirement to install
a heat network, if you like, rather than a gas network. If you
connect all the buildings to a heat system, you can then heat
through gas if it makes sense to use gas, you can use a gas boiler
distributing heat out to the individual buildings, but if you
then want to change to using biomass, for example, you can change
the boiler to biomass and the heat network is still of use to
you. At the moment we build all our buildings primarily on a gas
network and we are then stuck to that one source of heat and if
we moved progressively towards heat networks, all of that could
change.
Chairman: We were actually seeking the
barriers to smart metering very broadly, but we got, I think,
a dissertation then!
Q79 Mr Wright: We have talked about
all the different barriers to people who take up microgeneration,
but one of the biggest issues is changing people's mindsets for
individual energy use in that particular respect. To what extent
do you think we are beginning to see this change and is there
any more the Government could do to try and hasten this along?
Mr Wolfe: As Andrew suggested,
I think this change is beginning, but I think people do look to
the Government really to get coherent messages out. At the moment
we are still dependent on a relatively small number of so-called
early adopters, people who are really enthused about this and
are prepared to take the time and effort to get themselves up
to speed with it, so we feel there is a substantial role for the
Government both in raising awareness of the issue and educating
about the issue, but also then enabling people who are inclined
to do something about it to actually get involved. This was the
intention, for example, of the Low-Carbon Buildings Programme
and I think we are very disappointed at the very limited scope
of that and at the management issues that have come out of the
Low-Carbon Buildings Programme. For example, the stream of the
Low-Carbon Buildings Programme that is devoted towards individual
householders is very small, in fact lower than used to be under
previous regimes, under Clear Skies and the PV Demonstration Programme,
so there is a total of only £3.5 million allocated this year
to consumers who want to install micro-renewables in their buildings.
That was largely allocated within the first few months and in
fact it is almost fully committed now and I would say little more
than halfway through the year we are already facing a stop on
that particular stream, so consumers who have got themselves interested
in this sector are now going to be told that they cannot get a
grant for it anymore, so we feel that a far higher degree of consistency
over those sorts of programmes is a prerequisite really to engaging
the public.
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