Annex B
Memorandum from the Economic and Social
Research Council (ESRC) to the House of Commons Science and Technology
Committee Inquiry
RENEWABLE ENERGY-GENERATION TECHNOLOGIES
1. The ESRC supports high quality social
science research across a broad range of energy issues, including
the economic, regulatory, business, social and public acceptability
aspects of renewable energy. Energy, Environment and Climate Change
is identified as one of seven key research challenges within ESRC's
2005-2010 Strategic Plan; energy is therefore a priority area
for creating new research opportunities. Much of the Council's
current research is funded in collaboration with RCUK partners,
for example through the Research Councils Energy Programme, including
the UK Energy Research Centre, and the Tyndall Centre for Climate
Change Research, as is detailed elsewhere in this submission,
and is undertaken in collaboration with a range of policy, business
and other stakeholders. Further details of ESRC research can be
obtained from ESRC society Today at http://www.esrc.ac.uk.
2. Research of particular relevance, includes
that being undertaken by the ESRC Sussex Energy Group (http://www.sussex.ac.uk/sussexenergygroup/),
as a part of the Research Councils Energy Programme. The group
is, for example, undertaking research on: the extent to which
control technologies can aid the transition to more active electricity
networks and aid the development of distributed generation from
renewables; the value of renewables in contributing to diversity
of UK electricity supply portfolios; and methods for evaluating
energy policy.
3. The Cambridge Electricity Policy Research
Group (http://www.electricitypolicy.org.uk/), also funded under
the Research Councils Energy Programme, is undertaking research
on better market design for delivering efficient, secure and diverse
energy supply and on appropriate mechanisms for supporting RD&D
in energy. For example a recent paper has discussed the potential
role of international collaboration, markets and competition in
mainstreaming new energy technologies (Mainstreaming New Energy
Technologies, K Neuhoff and R Sellers (2006)http://www.electricitypolicy.org.uk/TSEC/2/prog3.html
4. A research report on "Large scale
Deployment of Renewables for Electricity Generation"
Karsten Neuhoff (2004) (Cambridge Working Papers in Economics
CWPE 0460) (http://www.electricity policy.org.uk/pubs/wp/ep59.pdf)
is also relevant and concludes:
"Resource assessments suggest that renewables
could satisfy a much larger share of global energy demand. This
would enhance our security and environment. However, the market
share of renewables will not increase unless new energy and technology
policies address the following barriers:
— Traditional energy technologies are not
exposed to full security and environmental costs and offer energy
below the level of total social costs. Levelling the playing field
implies re-allocation of rent between stakeholders and is therefore
a slow process. In the meantime, subsidies for renewable technologies
might be required to ensure efficient investment decisions, and
subsidies for conventional technologies should be reduced.
— Markets and tariff structures are designed
and optimised for fossil generation technologies. They do not
address the specific requirements of renewables: flexible operation,
long-term contractual arrangements to reduce financing costs particularly
in an environment with high regulatory risk, and simple procedures
with low-transaction costs for their small-scale nature.
— Renewables are at different stages of
development, and fit into different markets. Therefore, policy
support needs to address the specific stage and market of each
renewable. For emerging and innovative technologies, this means
increasing substantially the collective investment in RD&D,
and for those entering the market, increasing the level of deployment
incentives. Several countries applying strategic deployment in
parallel will create industry confidence in continuous market
growth.
— The discovery of a new energy technology
that suddenly resolves all energy challenges would be great, but
has not happened in the past and is unlikely to occur in the future.
In contrast, we have consistently observed that technologies become
more cost effective with improvements through market experience.
However, this does not happen autonomously—most renewable
energy technologies are locked-out from large-scale market experience
because the playing field is uneven and various barriers and technology
spill-over prevent industry from financing the learning investment.
It is in the power of governments to unlock these Technologies".
5. Research under the Research Councils
Energy Programme, co-ordinated by the University of Manchester
(Dr P Devine-Wright—Beyond Nimbyism: a multidisciplinary
investigation of public engagement with renewable energy technologies)
is extending research on public acceptability to renewable energy
technologies (mostly related to onshore wind) by examining a range
of forms of technology which are expected to figure, to varying
degrees, in the UK renewable energy profile—offshore wind,
biomass of various forms, small scale HEP, large scale photovoltaics
and more speculatively the various ocean technologies currently
under development and by deepening understanding of the dynamics
of public engagement in renewable energy technological development:
http://www.sed.manchester.ac.uk/research/beyond—nimbyism/
6. New research recently commissioned by
the ESRC under its Targeted Initiative on Innovation is comparing
approaches in the use of demonstrations and trials in North America,
Europe and Japan in respect to fuel cells, wind and photo-voltaic
and evaluating their impacts on accelerating innovation and the
impact of external policy factors on success (City University).
Another project is comparing experience in Brazil, USA and Europe
in supporting innovation in the transition from a petrochemicals
based to a bio-economy-based technology platform, with a particular
focus on bioethanol.
7. Research under ESRC's recently completed
Sustainable Technologies Programme, has tracked the progress of
a range of renewable technologies, including microgeneration,
community energy initiatives, marine and wind energy, and the
impact of, and interaction between, innovation systems, markets,
regulation and incentives, and business and societal responses.
A summary report of findings can be found at: http://www.sustainabletechnologies.ac.uk/final%20pdf/online%20version.pdf.
For example, "Unlocking the Power House: policy and system
change for domestic micro-generation in the UK" (Watson,
J, Sauter, R, Bahaj, B, James, P, Myers, L, Wing, R, October 2006)
suggests that successful deployment of microgeneration on a large
scale will require policy makers to support a diversity of routes
deployment, with incentives for both householders and energy companies.
The report also focuses on two areas in which micro-generation
and household energy saving investments suffer from an `uneven
playing field'—the fiscal system and the market settlement
system for electricity and highlights a range of areas requiring
further attention such as development of a household energy service
market, design of buildings and infrastructure and smarter metering.
Further details can be found at: http://www.sustainabletechnologies.ac.uk/PDF/project%20reports/109%20Unlocking%20Report.pdf
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