Select Committee on Innovation, Universities, Science and Skills Written Evidence

Memorandum 68

Submission from the Energy Research Partnership


    —  The work of the ERP has confirmed that the development, commercialisation and widespread deployment of any new energy technology, including those required for renewable electricity generation, needs an effective energy innovation chain to be operating in the UK.

    —  The current energy innovation landscape in the UK, whilst diverse, is also complex.

    —  ERP has developed a future vision for energy innovation in the UK, which suggests how the Energy Technologies Institute (ETI) and the Environmental Transformation Fund (ETF) could be used to simplify the UK's energy innovation process.

    —  The Research Councils the Carbon Trust and the Technology Strategy Board, also have central remits to accelerate low carbon technology innovation. These agencies are developing strategic partnerships with the ETI, for example, starting with a £40 million collaborative offshore wind programme between the Carbon Trust and the ETI.

    —  Other agencies including Ofgem, the Devolved Administrations, and the Regional Development Agencies also have a role to play in delivering an effective innovation process for the UK.

    —  ERP is currently steering further work with BERR, Carbon Trust, DIUS and the Royal Academy of Engineering on ensuring an effective energy innovation system for the UK.

    —  If the ambitions for UK energy innovation are to be realised, the setting up of the ETI and ETF should result in an increase in public funding for energy innovation compared to that provided through existing programmes. It is essential that the change to new mechanisms for funding is carried out in a managed way to prevent any loss of momentum during the transition.

    —  There is an international aspect to any energy innovation activity, creating opportunities for exploitation of the UK's strengths and more rapid development of appropriate solutions.

    —  Delivery of effective renewable electricity generation solutions will be dependent upon having a sufficient number of high calibre, committed and practising scientists and engineers in the sector. Against this background, the ERP has sought to understand the growing body of evidence that there is a progressive, long term decline in the numbers of "next generation" scientists and engineers available to support UK industry and academia.


  1.  The Energy Research Partnership (ERP) brings together senior individuals with roles from across the energy innovation spectrum, and from different sectors, who have the capability through their day-jobs to help the Partnership to achieve its aim of bringing step change improvements to the scale, coherence and impact of the UK's total energy research and innovation investments.

  2.  The Partnership is not a formal advisory or executive body, and its wide ranging membership[252] extending across government, industry and the research community will sometimes mean that the views of its members diverge. Consequently, the issues raised within this document are a distillation of views that have been expressed at ERP Meetings, and reflect an on-going debate between members as opposed to a final position to which the membership has signed up.

  3.  ERP plays an important role and is uniquely positioned to act as a forum for strategic dialogue and analysis, including to consider policy development issues and options where these set the context as drivers for technological innovation. Government has found it a valuable sounding board for policy ideas, alongside more formal bodies and processes.

  4.  The ERP, established in 2005 at the instigation of the Chancellor, is jointly chaired between public and private sectors. Dr Paul Golby is the current industry co-chair. Willy Rickett, Director General for Energy in BERR, has recently taken over from Sir David King as the public sector co-chair.


Energy Innovation Landscape

  5.  In discussion, the ERP has concluded that development, commercialisation and deployment of new electricity generation technologies, including those required to support the effective use of renewable resources, requires a co-ordinated programme of energy innovation in the UK (see Figure 1).

  6.  The existing landscape of organisations and programmes in the energy innovation area is complex (see Figure 2), and the government support in many of these schemes is needed because the market drivers are not strong or urgent enough to drive technologies through the innovation chain.[253]

  7.  Specific concerns have been raised about certain aspects of this innovation landscape:

    —  Support for the "demonstration" stage is inadequate in some sectors.

    —  EU State Aid rules may restrict support for large scale demonstration projects.

    —  Extended support is needed during the early commercial deployment phase when market incentives are insufficient.

    —  Not all sectors have a coherent technology road map.

    —  The focus of academic research needs to better directed towards sector priorities.

    —  In most sectors the extension and modernisation of existing R&D facilities would be more valuable than the creation of new facilities.

  8.  The ERP has discussed a vision for the future energy innovation landscape (Figure 3), centred on an innovation chain extending from the Research Councils' programmes of basic research, through applied R&D by the Energy Technologies Institute, to demonstration and early stage deployment support via the new Environmental Transformation Fund.

  9.  ERP Members have been pivotal in establishing the ground-breaking Energy Technologies Institute (ETI), with its key role to identify the most promising technologies from research and accelerate these towards market deployment.

  10.  The ERP is playing an important role in the development of the Environmental Transformation Fund (ETF). BERR and Defra are using ERP as a "Steering Group" to assist them in the development of a detailed strategy for this fund, the ERP is also steering work by BERR, Carbon Trust, DIUS and the Royal Academy of Engineering on the suitability of the innovation chain to bring low-carbon technologies to market and deliver UK benefit.

  11.  The key aspect of the vision identified in Figure 3 is delivery of a better co-ordinated energy innovation process for the UK, which supports the progress of technologies through all the necessary stages of research, development, demonstration and deployment. In doing this it seeks to address unnecessary duplication in the existing landscape whilst at the same time maintaining the diversity of activity that currently exists.

  12.  The complexity involved in moving any particular solution through the innovation chain needs to be recognised.

  13.  The Carbon Trust, and the Technology Strategy Board (TSB) also have central remits to accelerate low carbon technology innovation alongside the Research Councils, ETI and ETF. In particular, the TSB will have a key role in supporting innovation in the energy sector through funding technology developments both in that sector and in related technology areas, such as materials and construction.

  14.  Successful operation of an innovation chain involving all these key players will require the development of strong links between them to ensure that specific solutions are taken forward by the most appropriate partners. An example of the strategic partnerships that are being developing in response to this need is the recently launched £40 million collaborative offshore wind programme between the Carbon Trust and the ETI.

  15.  Other important aspects of energy innovation activity in the UK include those supported by Ofgem, the Scottish and Welsh Administrations and the Regional Development Agencies (RDAs). The Devolved Administration and RDA programmes are often focussed on development which takes advantage of specific local opportunities, delivering regional development objectives alongside broader climate change and security of supply goals.

  16.  With effective support, the ERP suggest that it should be possible to achieve the transition from the current R&D funding landscape to the proposed simplified vision within five years. It is essential that any change to new mechanisms for funding energy innovation is carried out in a managed way to prevent any loss of momentum during the transition.

International Strategy

  17.  The UK cannot operate in isolation from other international energy innovation activity. The current profile of climate change and security of energy supply issues has led to a wide range of international activity, creating opportunities for exploitation of the UK's strengths and more rapid development of appropriate solutions.

  18.  The setting up of the ETI provides an excellent opportunity to showcase the wealth of talent that exists in the UK, and to act as a catalyst for the development of relevant international collaborations. Crucially, it will also have the ability to assess, evaluate and prioritise these opportunities to ensure that those which are pursued will add the greatest value to activities in the UK.

  19.  In addition, many of the UK based beneficiaries of energy innovation activities either operate internationally or are themselves part of much larger multinationals, and will therefore play a key role in exporting technologies developed in the UK and importing relevant internationally developed solutions.


  20.  Through a survey of ERP Members and a review of published research, the ERP has sought to understand the high level skills shortages in the energy sector. "High-level skills" are taken to mean those required to contribute to the research and development chain that provides innovative new solutions to the challenges the UK energy industry faces—and to deploy them effectively.

  21.  This work has identified a growing body of evidence about the progressive, long term decline in the numbers of "next generation" scientists and engineers available to support UK industry and academia. At the same time it is evident that there are highly material challenges inherent in meeting national energy policy goals (supply, infrastructure and asset renewal, security of supplies, etc) which have particular relevance to the renewable electricity generation sector. Technology innovation and commercialisation are key to the success of this sector. These in turn are dependent upon having a sufficient number of high calibre, committed and practising scientists and engineers.

  22.  The key findings of the ERP study[254] were:

    —  Skills shortages are causing recruitment problems in the sector.

    —  It is specifically technical skills that are in short supply.

    —  The problem is only at its early stages—without intervention this situation is anticipated to worsen to a severe shortage, particularly when the extent of energy innovation and infrastructure replacement that is required is taken into account.

    —  It is the shrinking pool of graduates that is at issue rather than any concern that their quality is degrading.

    —  Organisations are looking abroad for skilled resource, in part a direct response to worsening problems in recruitment.

    —  The sector is seen to have a poor image among young people, however it is recognised that we are at a turning point in the sector with some very powerful tools to change this.

    —  A significant "outreach" initiative could influence future career choices among young people.

    —  When skilled labour leaves an organisation, it tends to remain within the energy sector.

    —  Energy sector pay compares favourably in engineering, but it is recognised this will never be a competitive advantage versus other areas such as financial services.

    —  There is no evidence of post-training attrition; retention rates in the sector compare very favourably with those in other sectors.

    —  The sector has strong competitive advantages, the projects going on are engaging and exciting and, once recruited, labour does not tend to leave the sector.

    —  A key recommendation of the report is that harnessing the above advantage by interacting with young people at a very early age could make a significant impact on the number of recruits coming through, and improve general public perceptions.

    —  It is recognised there are individual organisational efforts, but the scale of the problem is likely to require additional activity, the form of which will need careful design and implementation.


  23.  The ERP is unique both in the extent and level of its membership and in that it can concentrate on activities that:

    —  clearly add value;

    —  could not be done by a single member acting alone; and

    —  have the potential to advance energy research and innovation, development and demonstration in the UK and internationally.

  24.  It has become apparent that the ERP has the potential to significantly increase its impact and build on the good foundations now established. It can only fulfil its expectations if it succeeds in marshalling the full intellect and abilities of all its members to ensure that its outputs are greater than the sum of its parts. Consequently, the ERP is currently establishing a a dedicated team, to be hosted by UKERC, which will provide analytical and delivery support to inform ERP's work; ensure a robust analysis base for informed dialogue with industry, Government and other sectors; facilitate engagement with member organisations and externally; and strengthen the ability of the ERP to recommend and support solutions.

  25.  Through the development of this new operating model, the ERP will be better placed to provide leadership, develop a common vision and catalyse Government-industry partnerships to examine, create momentum and accelerate, for example, low carbon energy technology innovation and commercialisation.

  26.  By supporting and maintaining the highest levels of engagement and dialogue across the public and private sector, the ERP has a significant opportunity and ability to address the challenges being faced across the energy research and innovation chain.

January 2008


252   A full list of current ERP Members is provided as Annex 1 to this document. Back

253   The ERP has produced a report ("UK Energy Innovation") which provides a more detailed analysis of these issues. It is available on the ERP website: Back

254   A report giving full details of the outcome of this study is available on the ERP's website: 

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