Examination of Witnesses (Questions 260-279)
ENERGY SAVING
TRUST
31 OCTOBER 2006
Q260 Chairman: The £50 million
for the Low Carbon Buildings Programme is really money to give
ministers a headline to prove they are doing something about it,
rather than a carefully thought-through strategy to support microgeneration.
Mr Samuel: Your words, not mine!
Q261 Mr Clapham: Could I pick up
again from Brian's "shovel"? There appears to be very
little government support for R&D in microgeneration. Do you
feel that there is the potential there to require government support
for R&D or are most of the technologies so sufficiently near
to the market not to require R&D?
Mr Samuel: I think it would be
helpful in certain technologies to have further research and development
in particular aspects, such as—perhaps it is a bit too technical—in
inverters or fuel cell micro-CHP research, as two examples. We
will have the environmental transformation programme, which has
the potential to fund research into low carbon technologies. That
may include microgeneration, but we do not know the detail of
that fund yet. Research and development is certainly key; but
also you need demonstration of the technologies and how they can
become mainstreamed by builders, for example. Again, the Code
for Sustainable Homes can actually help that. It is also about
packaging the technologies together, so that you get the best
overall solution and combination for a particular household. So
demonstration is also important, as well as R&D.
Q262 Mr Clapham: Is this something
that you will be raising with the DTI when you meet with them?
Mr Samuel: It is something we
have been raising both with DTI and with DEFRA.
Q263 Mr Clapham: What kind of response
have you been receiving from them?
Mr Samuel: I think the response
is that there is a recognition of the need for research and development
and demonstration. That applies equally to DCLG in respect of
the Code for Sustainable Homes, as we move on to Building Regulations.
Q264 Mr Clapham: So really what we
are saying, certainly in the aftermath of Nick Stern's report,
is that we require R&D on the one hand and on the other, we
will see the market act as the driver as well. You say yourselves
that there is great potential in that market. Nevertheless, you
would like to see R&D running at the side of that growing
market potential.
Mr Samuel: Without a doubt. Also,
Nick Stern's report identified three essential policy mechanisms:
carbon pricing; technology; and policies to remove the barriers
to behavioural change. I think we have touched upon all three
of these by various means today, and all three are equally valid
and important for microgeneration.
Q265 Mr Clapham: Given there is that
potential in the market, of course, that means installation; that
means skills in installing. It may mean that we require an accreditation
scheme. How would that accreditation scheme work? Would it be
similar to the Corgi gas fitters?
Ms Wiltshire: DTI are already
developing an accreditation scheme, which is looking at product
standards and installer standards. One of the key things we think
here is that consumers need to be aware of those standards. It
is all very well having them but, again, it is a question of information
and advice on what people need to look for. It is underway, and
the DTI are developing it.
Q266 Mr Clapham: So the DTI are looking
at implementing an accreditation scheme, but yet we need to ensure
that people down the line—the customer—are really
aware of that.
Mr Samuel: Yes.
Q267 Mr Clapham: What more needs
to be done to make sure that the customer is aware that there
is an accreditation scheme?
Mr Samuel: There is a marketing-type
activity in getting the information out into the marketplace that
those schemes do exist, and that it is identified and signposts
customers to the best products and the best installers. Certainly
what we do not want to see are products being installed incorrectly
by untrained people—and nor does the industry.
Q268 Mr Bone: I want to ask you questions
about heat. It seems to me that at the moment space and water
heating are dominated by gas. What serious scope is there for
moving away from that?
Mr Samuel: Micro-CHP is fuelled
by gas, so the scope to move away from it through to technologies
such as ground source heat pumps, biomass and solar water heating;
solar water heating is already pretty much state of the art technology
and has been installed without problems in numerous installations,
but it is not yet cost-effective—
Q269 Chairman: Solar water heating
not cost-effective?
Mr Samuel: Generally not yet cost-effective.
Q270 Chairman: I will come back on
that because I do not agree with it. I just wanted to make sure
I heard that correctly.
Mr Samuel: Certainly the overall
potential we are looking at is fairly small in that respect. The
majority of potential for heat through microgeneration is from
fuel cell micro-CHP and from gas-fired Stirling engine micro-CHP.
Q271 Mr Bone: How can you meet our
carbon reduction targets without greater effort to reduce fossil
fuels for heating? I do not see how we can achieve it if we do
not do that.
Mr Samuel: We also need to do
that. However, micro renewable technologies are more suitable
for electricity generation, or have a wider potential penetration
for electricity generation than for heat. But at the moment there
are not any incentives for renewables heat. There is not a Renewable
Heat Obligation. I am not saying we would want one, because it
would be very difficult to administer. However, there are not
any incentives, other than through the Low Carbon Buildings Programme.
Q272 Mr Bone: You said there is not
a Renewable Heat Obligation, and I understand your organisation
does not think that it is really feasible.
Mr Samuel: No, I think it would
be difficult to determine who you would actually put the obligation
on. With electricity it is easier, because you have suppliers;
with the heat side you have a much bigger, wider group of companies—coal
merchants still, and you have the oil merchants and LPG as well—so
it is a much bigger and wider marketplace. It is difficult to
see who you would actually put the obligation on. That is why
we prefer grants for renewable heat.
Q273 Mr Bone: You have to have something
in its place then.
Mr Samuel: Yes.
Q274 Mr Bone: You are saying that
capital grants up-front is the way to do it.
Mr Samuel: Yes, because you are
not exporting either.
Q275 Mr Bone: Why does my roof not
have solar panels on it then? Why is that not happening? If there
are grants available—and I go to America a lot and see lots
of solar panels doing lots of heating and doing all sorts of things—why
is it not happening more often? Why is not anybody building that?
Mr Samuel: I can send you the
details of the Low Carbon Buildings Programme, if that would help!
The schemes have only just been implemented. Previously, you have
had smaller schemes for specific technologies. The technology
is still developing in some instances, and it is becoming more
mainstream. It is also becoming desirable and aspirational to
have these technologies. Unlike energy efficiency, where you cannot
actually see your cavity wall insulation, there is much more debate
and discussion around microgeneration technologies; it is much
more visible. That is also quite helpful to engage people on energy
efficiency.
Q276 Mr Bone: It is the sort of thing
I would expect people to want to take up. I am not quite clear
whether what is holding them back is the lack of grant or the
lack of marketing by the companies that are manufacturing these
technologies.
Mr Samuel: It is difficulties
around planning as well. Most local authorities do not have a
planning policy for microgeneration. Depending on who you may
speak to in the local planning department, you will get a different
answer. That is why you need the general permitted development
status, to make it much easier and smoother for microgeneration
technologies to be installed.
Ms Wiltshire: More fundamentally
as well, at the moment most of them are not cost-effective. So
you have to want to do it for a reason other than saving money.
Q277 Mr Bone: Even after the capital
grant?
Ms Wiltshire: It brings it down
to somewhere close to cost-effective. It does depend on location
and what you have at the moment; but, yes, it is there or thereabouts,
after the grant. However, for the majority of people that is not
the driver. The driver is about self-sufficiency; it is about
environmental concerns at the moment.
Mr Samuel: And individuals have
to get out there and do something. They have to be proactive.
That is why we are still very much in the innovation stage of
the microgeneration development trade.
Q278 Chairman: I want to challenge
this bit about solar water heating briefly. I appreciate that
it is a very lumpy, up-front capital cost. However, I have seen
evidence that suggests that, although there is a very long line
to the capital, once the equipment is installed you will actually
be getting paybacks after about 17 years—which is long,
I agree, but, in terms of a lifespan of 40, 50, 60 years for the
kit, it means that you are getting free water then for the remainder
of the life of the product. So why do you say that it is not viable?
Mr Samuel: We have taken cautious
solutions in the modelling. We are not saying it is not viable;
we are saying that in general it is not yet cost-effective.
Q279 Chairman: It is not cost-effective
because you pay the whole bill up-front, but actually you get
very good value later in the life of the installation.
Mr Samuel: Again, it depends on
the installation itself; the heat demand of the individual property;
the correct sizing of it as well. In certain instances, it can
be cost-effective.
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