Examination of Witnesses (Questions 220-239)
ENERGY SAVING
TRUST
31 OCTOBER 2006
Q220 Chairman: Mr Samuel, Ms Wiltshire,
I am very sorry. We have messed you around rather badly: you have
been postponed twice. I apologise. The House of Commons is sometimes
a curious taskmaster. With a statement on the Stern review and
the debate on energy policy on the floor of the House, it was
not possible to have you in as witnesses yesterday afternoon.
I am very grateful for your flexibility. I also apologise publicly
to Woking Council. We should be there this morning, looking at
their microgeneration in practice. We are not, and we may not
be able to find a place and time in which to do it instead—which
I am sorry about. I extend an apology now to our next witnesses
who are in the room from the Energy Networks Association, who
have been similarly discombobulated by our parliamentary procedures.
So, as I always do, can I ask you to begin by introducing yourselves
for the record, and what your function is but, as you do so, perhaps
also to explain a little more about what the Energy Saving Trust
is, what your role is, and how you are funded?
Mr Samuel: Good morning. I am
Brian Samuel. I am the Head of Policy Research, at the Energy
Saving Trust.
Ms Wiltshire: I am Victoria Wiltshire.
I am the Strategy Manager for Renewables at EST.
Mr Samuel: The Energy Saving Trust
was formed after the 1992 Rio Earth Summit. Our primary objective
is to reduce carbon emissions and to improve energy efficiency
in the household sector. We very much target our activities on
consumers in microgeneration renewables and energy efficiency.
We are a private, not-for-profit organisation. However, we receive
the majority of our funding under the Environmental Protection
Act through DEFRA. We also secure competitively tendered business
through other government departments, such as the DTI, the Department
for Transport and the devolved administrations. We also receive
a small amount of income from our private members, who include
the energy suppliers and other organisations such as BP and Johnson
Matthey, who have an interest in energy efficiency and carbon
reduction activities.
Q221 Chairman: How seriously do the
Government take you?
Mr Samuel: Seriously enough to
provide us with significant funding to help tackle energy efficiency
in the domestic sector. Obviously we work quite closely with government
and also with other like-minded organisations to try and increase
the uptake, primarily of energy efficiency but, increasingly,
of microgeneration as well.
Q222 Chairman: So it is primarily
DEFRA, DTI, DCLG.
Mr Samuel: We do not receive any
funding from DCLG.
Q223 Chairman: But in terms of your
relationship . . . ?
Mr Samuel: We do work closely
with them, yes.
Q224 Chairman: Transport?
Mr Samuel: Yes, and we also work
closely with DCLG on the Code for Sustainable Homes and Building
Regulations, for example.
Q225 Chairman: You have made some
quite ambitious claims for what microgeneration can achieve in
terms of electricity generation—30 to 40% of the market
by 2050—and a cut in carbon emissions by 15%. That does
refer specifically to electricity. We will ask you some questions
about heat later on, which is also important. Can I ask you what
forms of generation you think will make that contribution?
Ms Wiltshire: Based on the modelling
we did, the biggest contributions would come from micro-CHP, Stirling
engines—so a type of CHP—and fuel cells; also, photovoltaics,
micro-wind, and a niche market for micro-hydro as well, which
has quite a limited applicability. Those would be the main contributions
on the electricity side.
Q226 Mr Weir: You mentioned in your
answer micro-CHP and micro-wind. Recently, some environmentalists,
particularly George Monbiot, raised some concerns about the efficacy
of micro-wind, and one of our previous witnesses did suggest at
least that there was some doubt about whether the technology for
domestic CHP was yet available and suitable for most homes. Do
you have any comment on that?
Mr Samuel: I think the first point
in response to that is, yes, the technology is available and it
is suitable for homes. It is more suitable in certain instances;
for example, with wind turbines on the west coast and in more
rural areas than perhaps on the east coast and in built-up towns.
One of the issues is about the fact that it is a developing technology.
It is not yet cost-effective, hence we have a grant programme—the
Low Carbon Buildings Programme. However, part of that is an accreditation
scheme and that therefore provides sufficient reliability and
safeguard to consumers who purchase these technologies. So there
is an accreditation scheme out there for microgeneration technologies,
which therefore allows people to have confidence in choice. The
other point is that there is also a scheme run by the Renewable
Energy Association with their members. It is a self-certification
scheme to build confidence on installers as well. So it is a developing
technology; it will improve; the costs will come down, provided
it is given the right level of support; but it is new.
Q227 Mr Weir: Many people are very
interested in microgeneration, particularly in the wind turbine
on the roof and the CHP boiler. There is a slight worry in my
mind that, if the technology is not suitable for all areas, people
are perhaps getting the wrong technology for their particular
area, which could lead to losing confidence in this aspect of
microgeneration.
Mr Samuel: I share your concerns,
in the sense that there is a gap in the market at the moment about
the provision of renewables advice. We have 47 energy efficiency
advice centres, which are funded by DEFRA to provide energy efficiency
advice, but they do not have any funding to provide renewables
advice to householders. So we certainly share your concerns that
more needs to be done to signpost consumers to the most efficient
and effective products on the market that are suitable for their
particular homes. Not all products are suitable for the same home.
Ultimately, we will learn much more about which products and which
combination of products are best suited. Initiatives such as the
Code for Sustainable Homes, which encourages low carbon applications,
above the Building Regulations, will help in that respect. Perhaps
I could add that the same sorts of things were said about condensing
boilers when they first came on the market. It is now sufficiently
proven that government can actually regulate their installation
in the vast majority of applications through Building Regulations.
So there are concerns out there; there is a gap in the information
and awareness provision; we hope that they can be resolved—but
the technology is there and it is ready.
Q228 Chairman: Before I bring in
Tony Wright, perhaps I could just ride my usual hobbyhorse. You
talked about a niche market in micro-hydro. Actually, hydro used
to be a very big provider of electricity to many rural communities
in England, with streams and rivers being tapped very efficiently.
You talk about it being a "niche market". Do you have
no more ambition for it beyond that?
Ms Wiltshire: We only looked at
it on a small scale—one or two householders. That is the
technology we looked at, and obviously there are not that many
people with fast-flowing streams at the bottom of their gardens.
Q229 Chairman: So medium and large-scale
provision is a bit outside your—
Mr Samuel: Yes.
Q230 Mr Wright: Within your report
it says demand for microgeneration could meet 30 to 40% up to
2050. What would be the cost of achieving such an expansion of
microgeneration? Would this be comparable to, say, going down
the nuclear power route?
Mr Samuel: That is a good question
and a very difficult one to answer. Obviously the costs on nuclear
power are subject to uncertainties, as well as on microgeneration.
We are not experts in nuclear, so I cannot really address that
side of things. As regards microgeneration, the most important
thing is to achieve fair reward for export. By "fair reward
for export", we are talking about export equivalence, so
the same sort of price for export as you would get for import.
Taking that assumption, if you then look at providing grants of
25% until a technology is cost-competitive in the marketplace,
then you would expect the total sum would be around £100
million, plus a further £250 million if you included photovoltaics.
That is for the household sector; but that also depends then on
having regulation in place for technologies once they become cost-effective;
to have mandatory requirements to install them in new build, et
cetera.
Q231 Mr Wright: Would your figures
take into account a reduction in electricity needs through energy
savings?
Mr Samuel: The starting point
for any investment in greening households is energy efficiency.
It is far more cost-effective than microgeneration. However, the
actual costs in the model solely depend on the uptake of microgeneration
technologies.
Q232 Mr Wright: Keeping on the nuclear
side of things, there was a report that came out suggesting that
if everybody switched off their televisions every night we could
probably save the equivalent of two nuclear power stations. Would
that be the type of thing you would be considering in terms of
the Energy Saving Trust?
Mr Samuel: Yes. The most cost-effective
by a long way is cavity wall insulation and loft insulation. Installing
those has a very quick payback time of one to two years. That
has to be the priority before you look at installing microgeneration.
Again, referring back to the Low Carbon Buildings Programme, in
the household sector it is a requirement to have had cavity wall
insulation and loft insulation installed to a certain limit, where
possible to do so, and also the installation of energy efficiency
light bulbs. But then behavioural measures, such as you describe—turning
TVs off, turning lights off—are also required. Further work
is definitely needed in order to change households' behaviour,
as well as investments in energy efficiency and microgeneration
products.
Q233 Mr Hoyle: You say that we have
to try to educate people on household equipment. Do you think
we ought to educate the manufacturers? Because we will not have
to worry about the people who have them if the manufacturers made
the equipment in the right place at the beginning. Leaving TVs
on stand-by—maybe that is something we ought to look at.
I do not know what your views are on that.
Mr Samuel: Totally. Product standards
are very important. What we need to do is to remove the least
efficient products from the marketplace and incentivise the most
efficient. The ways of doing that are through product standards.
However—
Q234 Chairman: We must not go too
much down the energy efficiency route. We are looking at microgeneration
today.
Mr Samuel: The same applies to
microgeneration. We need to signpost consumers to the most efficient
microgeneration products as well.
Q235 Chairman: Before I bring in
Mike Weir, you raised a subject in answer to questions from Tony
Wright which I was going to ask of you later. I have always considered
the jargon in this area—the very word "microgeneration",
for instance—as not particularly helpful, not accurate,
and it sounds slightly strange, not a user-friendly word. "Energy
export equivalence" must rank as one of the ugliest phrases!
You referred to it in answer to a question. Can you achieve it?
You talked about it and you said "if", I think, in answer
to a question from Tony Wright. Can it be done?
Mr Samuel: In Germany you already
have a sort of equivalent mechanism for that, called the feed-in
tariff, whereby a fixed fee is paid by suppliers for the energy
exported. Powergen, or E.ON UK, offer that at the moment for photovoltaics.
Q236 Chairman: So the answer is yes,
and it is important?
Mr Samuel: Yes, and it is important.
Mr Binley: I just have a supplementary.
It was a bit of a throwaway phrase that you used when talking
about longer-term achievement of targets. You said, "Given
the right level of support". What did you mean by that?
Chairman: I am not going to take that,
because I think it does stray on to Mark Hunter's questions later
on. It is an important question and you are right, Mr Binley,
to ask the question, but Mark will have nothing left to ask!
Mark Hunter: You should have been here
at the start, Brian!
Q237 Mr Weir: In your submission,
you show that a large proportion of the microgeneration capacity
that forms part of the 30 to 40% estimate is in the form of micro-CHP.
You did say earlier that you were confident the technology was
available and would be adopted in most homes. However, I understand
the Carbon Trust have recently commented, casting some doubt on
the actual emissions savings of micro-CHP. Do you have any comment
to make on that?
Mr Samuel: Again, this is where
the technology plays a part as well, because there are two types
of micro-CHP: Stirling engine micro-CHP, which is the subject
of the Carbon Trust field trials, and a fuel cell micro-CHP. So
going on to the Stirling micro-CHP—and these are the ones
that are becoming available now and are part of the Carbon Trust
trial—I think the key there is in the word "trial".
It is a trial. These technologies are developing. Micro-CHP will
not give the same amount of carbon savings as micro-renewable
technologies, because they rely on gas to fuel them. That is the
first point. The second point is that some of the findings from
the trials have been very promising. They are preliminary findings
and they have identified that units in larger houses are producing
the levels of savings that are expected by the manufacturers,
of around 15%. Smaller installations, or installations in smaller
homes, do not produce as great a level of savings as those in
the larger homes. The purpose of the trials is to learn about
these things. Based upon our information and our report, we estimate
eight million homes will be suitable for micro-CHP. So the report
takes account of some of the preliminary findings of the Carbon
Trust's micro-CHP trial. In a sense, we do not anticipate and
do not model micro-CHP being suitable for all homes anyway.
Q238 Mr Weir: Does that not take
us back to the question of giving consumers advice?
Mr Samuel: It does.
Q239 Mr Weir: If you go into B&Q
and order your windmill for your roof now, they come and survey
it and tell you if it is suitable. Is there not a danger here
that, if we have competing CHP technology, we are into the Betamax-VHS
debacle as to which one will be the most efficient, given that
we need to get the policy going?
Mr Samuel: I do not think it is
quite the same as the Betamax example, because you will invariably
always have some technologies that will be more suitable in certain
households than others. For example, biomass and ground source
heat pumps—which we have not mentioned—in certain
installations are already cost-effective, because they are suitable
for off-gas-network homes and they are competing against higher-cost
electricity or oil installations. So in different homes you will
have different technical solutions. I share your concerns that
greater advice needs to be provided to consumers to allow them
to make the best choice. At the moment, there is not a mechanism
that allows us to do that.
| 
