Select Committee on Trade and Industry Minutes of Evidence


Examination of Witness (Questions 200-219)

INSTITUTION OF ENGINEERING AND TECHNOLOGY

23 OCTOBER 2006

  Q200  Mr Wright: We understand that the Italian approach is that they have implemented a national roll-out of a particular technology. Do you think there should be standards to which the industry can work or do you consider that the Italian approach is correct?

  Prof Loughhead: If you are going to make any change to a critical infrastructure like our energy system, it makes enormous sense if you agree the standards you are going to adopt and that then allows you to give people the freedom to implement those standards in any way they see fit. The Italian approach which is simply an edict that you shall install this on a certain timescale works fine in a more centralised system than it appears we wish to pursue at present.

  Q201  Mr Wright: It is difficult to get people to convert to water meters without a degree of compulsion in terms of new properties. Would we face the same with smart metering?

  Prof Loughhead: It depends what you want to do. From a purely engineering viewpoint, our natural desire to make the systems work more flexibly, efficiently and with all kinds of possibilities would lead us to say, "Yes, smart meters would be great." If you ask me do we need smart meters to make the system work, it depends on the trading arrangements. Meters are simply a means by which you decide how much money person A is going to pay to organisation B or vice versa.

  Q202  Chairman: You were sitting in during our last witness session and you heard them talk about training, standards and those issues. I think we had a call from the Council for clearer standards in this sector. Do you think the industry is doing a good enough job of maintaining standards?

  Prof Loughhead: Could you clarify "standards" in what exactly?

  Q203  Chairman: Particularly the workforce, the installation, the engineers who are doing the job.

  Prof Loughhead: Our observation would be that in many of these systems industry as such does not control the workforce because the workforce consists of a spectrum from people employed by large organisations to individual traders. If you get somebody from, for example, Central Networks come to look at something in your fuse box, you probably have a higher likelihood that they will not blow up your house than if you get Eric, the electrician, from the local Yellow Pages or even worse from a sign in a local newsagent's window. In a number of areas evidence is starting to be found that there is cause for concern about the standard of installation. Recently, I was talking to an organisation that had started to look at the efficiency of condensing boilers in operation, as installed in houses. Their initial and as yet unpublished data suggests that the boilers have been installed safely but none of the other necessary changes to the heating systems to make them work efficiently had been made or attempted. Consequently, they were working at an efficiency much lower than they claimed to operate at. There are instances like that which make me believe that there are some problems. If you look at some of the other systems that you are looking at—for instance, solar thermal systems in houses—for those to work really effectively you need an internal water system which is arranged differently to our standard water system. Ideally you need to both install the panel and look at changes to the internal plumbing. Whether that is done by everybody who has installed systems I do not know. To what standard is it done? I do not think there is a standard; it is just assumed that somebody will advise you what to do.

  Q204  Chairman: I am not familiar with the current accreditation schemes. Do you think they meet the needs of the industry?

  Prof Loughhead: I am not aware personally of any accreditation for people to install a domestic wind turbine, solar PV systems or solar thermal systems or anything else so I do not really know. That is marginally outside the area with which I am fully familiar.

  Q205  Chairman: If we are to get the benefit of these systems that are installed and if people are to have confidence in them, it is clearly important they do the job they are intended to do. I am about to have a condensing boiler installed next week at home.

  Prof Loughhead: I hope they have done a consultation on the design of your heating system to ensure it is compatible. If they have not been measuring radiators and adjusting the temperatures, I would be very willing for a small fee—

  Q206  Chairman: He has been trained by Worcester Bosch, I know. What about the skills shortages in the sector? There is a great shortage of plumbers and electricians as it is generally. Do you think you have a problem with the skills?

  Prof Loughhead: I think the skills probably are currently slightly inadequate for the level of activity that we have. If there is any significant increase, I am sure that we will see a need to increase substantially the number of people that are competent to install and maintain systems of this form.

  Q207  Chairman: The answer is yes, there is a potential skills shortage?

  Prof Loughhead: I believe that there is a potential skills shortage, yes.

  Q208  Chairman: The degree of expertise required to install conventional systems is quite high and this is higher still.

  Prof Loughhead: Yes, correct.

  Q209  Chairman: Can the Government do anything about that? Should it?

  Prof Loughhead: That is almost a political question. Certainly if we are going to do things like this we should have some form of standards. Those standards inevitably will touch upon the competence of the persons who are going to do it. It would seem something that is natural to be done at a national level. I cannot see any reason why you would want to have regional differences and consequently it sounds like something that the Government should expect to be involved in.

  Q210  Chairman: We must look crucially not just at the safety of installations but their efficiency as well.

  Prof Loughhead: Yes. The efficiency is something tested on a bench in a laboratory, under ideal conditions. One used in a household, possibly full of teenagers, is something totally different.

  Q211  Chairman: Presumably typically better done with new build as well rather than retrofitted?

  Prof Loughhead: It is always easier to do these things with new build and it is always cheaper. If there is a serious desire to see things such as, for instance, solar thermal, one would have to ask the question: why does it not just become a requirement on new roofs, because the marginal cost is probably quite small. The advantage is you then also have the internal hot water system designed to be used in a case like that. Ensuring that new build is microgen-ready makes a lot of sense and it is difficult to see why we do not do that.

  Q212  Chairman: You talked about solar thermal. Most of our evidence session with you has been discussing electricity. Do you accept the view that has been expressed by some of our witnesses that some of the easiest things to do are on the heat front rather than the electricity front?

  Prof Loughhead: It is certainly easier to do things on the heat front generally, yes, as long as we overcome the problems to which I alluded earlier about making sure it is installed effectively. The difference however is, I would remind you, most parts of the UK use three to four times the amount of energy in heat that they do in electricity so you have to make a much bigger contribution with heat to have an impact. Electricity is, in the energy sector, the lowest efficiency at the moment with the current system.

  Q213  Chairman: We could make a big contribution with carbon saving if we increased the use of microgen for heat purposes?

  Prof Loughhead: I would advocate using it for both electricity and heat, yes.

  Q214  Chairman: One of the problems is that if the Government decides it wants to create a framework in which new nuclear power stations can be built, it can price carbon, adapt the planning regime, do various things to try and encourage the build of new nuclear power stations generating lots of electricity and that is fine; but this is an issue where millions of people must be incentivised to do something or at least hundreds of thousands of councils or local organisations must be incentivised. What is the role for government, if there is one, in encouraging these people to make all these great changes?

  Prof Loughhead: That is an enormously difficult and key question. I am afraid I do not have a simple answer for you. If you can find a way to incentivise people to make more use of microgeneration, you should have done that after you have incentivised them to do the simpler thing, which is to find more effective ways of using energy. There is a lot of scope to reduce our energy usage without impacting on our quality of life, probably at a very crude estimate by about 20%. That comes straight off our carbon emissions and straight off our energy bill.

  Q215  Chairman: Are we talking about the domestic environment with space heating or transport as well?

  Prof Loughhead: I am talking about energy use by individuals which represents half the total energy consumption of the UK, whether it is in space heating or electricity usage in the home, the use of cars, the use of transport or whatever. The other 50% of energy is used by people while they are at work and there is some flexibility there. If we assume that there is a 20% reduction—let us confine ourselves to the domestic sector which is what we are talking about for microgeneration in the first instance—to make a 20% reduction in our carbon emissions by substitution of conventional energy by microgeneration is quite a long term programme and it is quite capital intensive. A behavioural change to effect a reduction in demand is probably difficult to do but does not have a capital implication at all. That is what one should try first of all. To go back to the question about incentivising people to do it, I would repeat something I said earlier. To the individual consumer there has to be a benefit. I noted in the other evidence the fact that people who have microgeneration show signs of changed behaviour but I think we must be careful because mainly those that have it today are the ones who are already eager to change their behaviour and they are quite a small proportion of the population. The key must be to find some benefit. Whether that is fiscal, whether you get a green badge to stick in your window, whether you get free tickets to the local football match or whatever I do not know, but there has to be some benefit. It is unlikely with our current regime of low energy prices. Energy is not expensive for many of the population. It is a low item of cost. The savings that you can make on energy efficient technologies are almost irrelevant. There has to be an incentive and a benefit that is other than fiscal and other than just a "feel good" factor.

  Q216  Chairman: Your institution's view is that microgeneration has the potential to make quite a useful contribution to energy production and carbon saving in the medium to long term but in the short term energy efficiency is the single cost that should be gained?

  Prof Loughhead: Yes. It is a cheaper one and it is something that you can do more quickly but that is not an argument against microgeneration.

  Q217  Chairman: I understand that. Too much of the debate is either/or, is it not, in this area?

  Prof Loughhead: In this whole area it is everything. We will need to deploy a whole suite of methods if we are to meet our long term aims and it will involve everything from different large scale generation technologies, including carbon capture, all the way down to exploiting small scale systems. The simplest thing any engineer will tell you is, if you have a problem in meeting your needs for something, start by reducing your needs and then work on the difficult question of how you supply them.

  Q218  Chairman: There is no philosopher's stone.

  Prof Loughhead: I am afraid there is not.

  Q219  Chairman: Is there anything more you want to say, Prof Loughhead?

  Prof Loughhead: No, I think that is it. Thank you very much.

  Chairman: We are most grateful to you. Thank you very much indeed.





 
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