Select Committee on Innovation, Universities, Science and Skills Minutes of Evidence

Examination of Witnesses (Questions 220 - 239)



  Q220  Chairman: This has got all the similarities of what happened with the mobile phone industry and the actual roll-out of that technology. In meeting Government targets there in terms of coverage, companies were then faced with the problem of actually getting the maths up in order to deliver what were their contractual obligations. I wonder whether there is an opportunity of actually having a pre-application process which deals with the very issue you have talked about of actually getting rid of, let us call them, frivolous applications or ill-considered applications which simply clog up the system, and who would be best to deal with that, in other words to have quality assurance before it goes to the planners?

  Mr McCullough: I think one of the things that would be a welcome introduction to the sector, if you like, is some kind of means-testing qualification.

  Q221  Chairman: Who would do it?

  Mr McCullough: There is one area that is not actually related to planning but related to the grid and it is an area where you see quite a lot of gamesmanship taking place. To take an example, when a wind park is in the early stages of development with a known track of at least two or three years to go, a grid application is made to a National Grid company and they have to respond within 90 days. Quite often that means that the grid allocation of spare capacity, which is a rare resource, is allocated to a project very, very early in the process so you have two queues happening in parallel. You have the planning queue happening in parallel and then access to the grid. Many projects are actually working their way through the consenting process but because many of these businesses are small, individual developers that do not have the backing of large utility funding, they cannot afford the exposure to a grid application and the commitment that that makes to the investment in grid connection prior to having consent of their project, but by the time they get consent for the project and make the application for grid, the grid capacity is booked by people who are far further back in the food chain of bringing their project forward and there is a mismatch there. To be fair, there is a transmission access reform already taking place and that has representation from RAB (Renewables Advisory Board), it has representation from the Electricity Supply Group which is co-chaired by Ofgem and BERR currently, so it is actually being addressed but it is another hurdle that has to be overcome and is a means testing in its own right.

  Q222  Mr Cawsey: I wanted to talk about the reality of all this and that is, Kevin, you will know in my area there has been a big issue about—

  Mr McCullough: Yes, my area too.

  Q223  Mr Cawsey: What strikes me from that is that the companies themselves have made matters worse because what happens is a company comes in; they get permission to do a test to see what it is like for wind capacity and all the rest; they put a plan in; other companies start saying, "Oh yes, this looks like a good area," and before you know it one relatively small part of the country gets a lot of big applications in. That strengthens the case for a public inquiry because it is such a blight for that area. It is almost that the companies are not planning together the roll-out of the technologies which leads to the situation where the delays are almost more justified.

  Mr McCullough: Please do not misinterpret what I was saying earlier; there are and will always be very valid cases for public inquiry. Where there are numerous applications that have come in for a timescale that is close, one application over the other, as indeed in your own constituency, then it may well be that some form of determination has to take place beyond the local authority just to approve one scheme or another. In the second point in your question where you made the comment about—and I will paraphrase it—would it not be great if we all got our heads together first, we are all competing businesses and we are competing in not only a local supply market here in the UK but an international market for access to turbines and the technology to support those turbines. We all have, certainly at utility level, and even those players who are smaller than utility level, a desire to sell that power competitively into the various receptors of that power, so there is a fine line. We do as much as we can within the constraints of moral and ethical business to try and predict when applications will go in together so that we avoid this accumulative effect which is a real nightmare in some cases for local authorities, and I accept that completely.

  Q224  Dr Blackman-Woods: There is already scope in the planning system to have informal discussions with local planners in terms of this pre-application stage, but would the system benefit from some sort of independent panel—I think that is perhaps what we are asking—or people who were able to make a judgment about the applications in terms of its use for renewable energy? Could that be done through PPS22 or is that a fundamental change, do you think? It is quite important.

  Mr McCullough: I do not think there is a fundamental stumbling block there at all. If such a panel was constructed so that it could give genuine impartial advice to local authorities and in so doing try and aid the equality that is necessary of the various authorities, then that can only be a good thing. The challenge is—and again this came up in the previous session—there are so many bodies already involved in the same space that the clarity of purpose of a new body being introduced like that would have to be very, very clearly spelt out, but I see no problem with the principle.

  Chairman: Thank you very much indeed for that. Tim?

  Mr Boswell: Can we change tack a bit and talk about another potential constraint which is skills.

  Chairman: We will give you a rest, Kevin!

  Q225  Mr Boswell: We could all spend time defining what skills are but I think for shorthand it is the use and application of knowledge. Clearly there are some specific areas which are likely to be required to bring in the renewable technologies. I would like to ask first, if I can, and I think also particularly with reference to the regional interests, what is the state of play? Have we currently got, in terms of the existing technology which is available, the skills that we require? Are there particular sectors where we are in deficit or is it a matter of general and generic pressures? Could we readily import those skills if we did not have them?

  Mr Alexander: I do not think this is an isolated issue in terms of renewables. I think there is a broader issue in terms of the skills we have, the full STEM—science, technology, engineering, technical-type skills—and this is one aspect of it. It is a key issue that we are pressing the Government to consider in the context of its current review of innovation with the plans to publish a report in spring. Unfortunately, I do not have an easy answer. The problem is very well rehearsed; answers seem very difficult to come up with because they are dependent on decisions by lots of people, so if you apply it for example to this particular sector, one issue we have is that there is not a single skills body responsible for this sector.

  Q226  Mr Boswell: No sector skills council?

  Mr Alexander: No, it is cut across three at least. I am not suggesting you could go on increasing the number of sector skills councils ad infinitum but a question I would leave is, and one that needs to be looked at maybe, is is there sufficient co-ordination across those three councils to take a particular cut of this sector seeing that it is so key in terms of our future.

  Q227  Mr Boswell: Just to be clear on that point, the issue that you have raised is the co-ordination between the SSCs with an interest and central government and the national interest in getting the adequate skills?

  Mr Alexander: Yes, I would not jump to the conclusion that what is needed is another body because whenever you set up another body you risk adding to the confusion rather than reducing it, so I would probably be for integration and co-ordination rather than a new body.

  Q228  Mr Boswell: Given that we are configured as regional development agencies at the moment, and that is the way the Government has set things up, is there also a regional role, and if there was how would you co-ordinate that with the national requirement that you have also mentioned?

  Mr Alexander: The role we play with skills and other issues is to try not to reinvent at the regional level national wheels. It is identifying particular needs, particular emphases, particular priorities within the region, so making sure therefore that we maximise in terms of local opportunities and challenges. I think that is a particular role that we bring and in terms of the RDAs often what we are bringing to the table there is our understanding of business within our regions, the sheer level of contact we have with business, which at a national level is very difficult to replicate.

  Q229  Mr Boswell: If I can turn then to Nick, in terms of recruitment for his project; is this actually constrained by the absence of skills in the South West? If it is, how do you remediate that? Is the answer to bring in the people from a different country who understand this or could we or do we need to be starting to build capacity? How do we set about it?

  Mr Harrington: Currently recruitment is not done regionally, it is done nationally and internationally for jobs in the renewables area and, yes, there are difficulties in recruitment at the moment and this is partly because the same engineering graduates could also enter a career in the oil and gas industry which is very stable.

  Q230  Mr Boswell: Might I interrupt you for just a second on that point. Are you talking primarily about graduates or technicians or is it more or less equal across the piece?

  Mr Harrington: It is probably more an issue of very highly skilled people. Technicians can adapt. A marine engineer from a ship could probably adapt to running an offshore renewables project but the very high level skills are certainly in short supply. This is possibly because it is a very new and emerging area and it has not necessarily been an identified career choice at teenage level. What we are doing is very much integrating the universities into relationships with the device developers and as such the universities are becoming very aware of the particular issues facing the industry. That will in turn inform their research which will in turn inform their under-graduate teaching, so we are hoping in, say, five years' time that the region will be producing a flow of graduates exactly suited to offshore renewables.

  Q231  Mr Boswell: But you can turn that round more quickly than perhaps you can turn round some of the other issues we were talking about in relation to the 2020 targets?

  Mr Harrington: Yes.

  Q232  Mr Boswell: It may be, Ravi, we can also talk about what you might call the network and delivery end as well. Are you running into these sorts of problems?

  Mr Baga: I think there are lots of the parallels to be drawn between skills development and research and development. Post-privatisation in the early 1980s there was a significant downsizing within the industry and in that process a considerable amount of skills were lost. We are certainly facing an issue now in terms of the age profile of our workforce and we are putting a lot of investment into trying to bring new graduates and new apprenticeships through to try and have a transfer of skills. Within that we have got some work going on in a parallel company that we have set up. Apart from that, there is also this issue about some of the historic networks that existed between academic institutions and industry which were far more centralised and perhaps better co-ordinated, and now some of the customers of the academic institutions are much more disparate and diverse. There is not a critical mass. It is very difficult to establish a critical mass to present to an academic institution where certain specific skills are required. That is coming back to the point that Jeff made about co-ordination. I think we have got this huge need for talent now given that we have got to replace a large amount of infrastructure, and we need specialised skills, and to add to that we cannot really replace like-for-like so we are having to develop anew. I think the key point is to establish a critical mass, and that is where I think central authorities or bodies can play a role by drawing on all the requirements and trying to present them in a more co-ordinated fashion and helping re-establish those networks with academic institutions.

  Q233  Mr Boswell: That is helpful. I am trying to put this together. It seems to me that there is a need for greater monitoring and assessment of where we are and then beyond that the suggestion of some kind of co-ordinating body. Would, for example, a National Skills Academy be an appropriate focus for this or would one be located elsewhere? If we did achieve this and we could produce supply for the potential demand in a reasonable timescale, as Nick suggested, would that actually help significantly the overall roll-out of those technologies? Is this an area that is holding us back that we could remediate relatively straightforwardly if we produced the right co-ordinating machinery?

  Mr Baga: I think it is difficult to judge whether it is actually holding things back but it is certainly something that we need to address to take us forward.

  Mr Boswell: Right, that is helpful.

  Q234  Chairman: We are particularly interested whether you think a National Skills Academy would be useful.

  Mr McCullough: I agree wholeheartedly with the fact that there is probably a greater need to look deliberately at the merging of the various skills councils so that we could look at the particular needs of the renewable energy sector. I have to say—and this might be quite controversial—that I am not exactly sure that a National Skills Academy will help. There is a terrific pull already created, in the last two or three years in particular, by climate change and the need for diversity of energy supply. It is a very headline, sexy topic, frankly. I have been in the black fuel energy business since 1984 and I have never in all of that time seen such a real surge of interest through academia, with universities beginning to turn themselves to courses in environmental science and engineering degrees, particularly centred around doing more. I absolutely agree that there is a need for co-ordination of that. Whether incrementally we would see significant return on value for establishing a National Skills Academy—I doubt that that would be good value for taxpayers' money.

  Q235  Chairman: Thank you for that. Any comments from this side of the panel about that? If that is not the right approach, is there anyone else with another mechanism they have specifically in mind?

  Mr Alexander: We are addressing it at a number of levels. The RDAs are committed through the Energy White Paper of 2007 to work through the existing skills councils in terms of integration. That is work in hand and there is a good example of the network that has been established by my colleagues in the East of England Development Agency that you might like to look at. Our view on the National Academy is that it is worth looking at but I cannot be more definitive then that. We should not, as I said earlier, rush into setting new things up. We do think this is worth further consideration but I could not put it more strongly.

  Mr Harrington: I do not think there is anything I can add to that.

  Q236  Mr Cawsey: I would like to move on now to project development and environmental issues so I will be going back to Kevin and Ravi again, mainly anyway. We obviously like talking about green energies, although I suppose in the real world we accept that there is a tradeoff between the wider benefits of a project and the social and environmental impact it may have in the area or the regions in which they are based, so can you explain to us a bit about how environmental issues are considered during the development of technology deployment projects?

  Mr McCullough: The very short answer that will lead to a longer answer is from the outset—and I think this is very fair of UK plc in general and not specific to any one business—there is a responsible group of development businesses in the UK that recognise their environmental footprint very, very clearly, and increasingly so in recent years. A typical renewable energy development will start with the relationship at landowner level and very, very quickly move into a pre-briefing of stakeholders like the local authorities (despite the fact there is no formal route to do that and it is an unnecessary step to do that but it is good management practice to involve stakeholders very quickly). You will then typically enter a period of maybe two to three years of doing environmental impact assessment studies of the type that we now know are those required prior to any application being deemed a good application when it enters the system, so everything from, in the case of offshore, marine biology, ornithology, the full gamut of issues, are deeply assessed by professional bodies in association with the developer prior to the applications being made. In that point of your question where you say okay, how much of that is looking at the overall impact and the alternatives, certainly we do look at the cradle-to-grave impact. In that assessment we have to look at all of the through-life impact of the project, including taking it away if somebody does come up with a whizzy idea and we do not need it any more. We do consider that completely. What is probably not transparent is the part that those schemes have to play in the overall energy mix, bearing in mind that we have the Large Combustion Plant Directive—and the clock is running as of 1 January this year—for eight to ten gigawatts of plant in the UK, we have the nuclear fleet closing, so it is about getting the right balance of energy from different sources. In the individual application for a renewable project, it is not normal practice that we take over that one versus the other, but certainly from a very early stage we do very detailed environmental assessment.

  Q237  Mr Cawsey: Can you think from your experiences of any examples where the deployment of renewable electricity-generation technologies have had a positive social and environmental impact on the local area?

  Mr McCullough: Virtually every scheme we do.

  Q238  Mr Cawsey: In which way?

  Mr McCullough: What we always do from a public perspective is educate them about what the benefits of a wind farm would bring to the national picture. We do that in our very early stages in the various public meetings that we hold. In all cases—and you will find that this is common practice throughout the whole sector—we have an element of the money to be raised from that commercial scheme returned to the community via various bodies, so everything from assisting in schools and colleges locally in education programmes, through to refurbishment of village halls, or the sponsoring of a lifeboat with new Land Rovers and the like. All of that is wrapped into the overall community package and that is part of the business, but perhaps the most commercially important issue is that it does create real jobs, and it creates jobs now. Very often in very rural areas the difference of ten or 20 jobs makes a huge difference to the local economy, for people in regular employment, in some of the remoter parts of Scotland and Wales in particular. In the Highlands and Islands in Scotland for instance bringing in a 90 megawatt wind farm project will generate of the order of 20 to 30 jobs. It does not sound a lot in one regard but it is a huge benefit. In all our cases where we survey before and after, the acceptance and understanding of what it brings to the community is always elevated. We can demonstrate some evidence if the panel is interested in seeing that from our projects.

  Q239  Chairman: I think we would very much appreciate having a written submission there just to indicate that and particularly again in terms of tidal where you are doing major pieces of engineering in fairly remote areas with different technologies, if there is anything you could let the Committee have to see where there has been real environmental and social benefit, that would be useful for us to include in our Report.

  Mr Harrington: There is quite a lot I could help the Committee with on this very point about impacts because, as the previous speaker said, the process involves very detailed environmental assessment and scrutiny of that by regulators, then subsequent monitoring required as a condition of consent, and eventually decommissioning. What we are hoping to do is a lot more than that, though, because we know because of what regulators and stakeholders have said during the consent process that there are some long-term issues that they are concerned to understand more fully, and our intention is that there should be an academic research programme continuing for as long as it takes to understand, perhaps ten years from the commencement of the project, what the impacts really are. It will certainly not be possible to determine this fully within three years or four years or even five years. That can only be done comprehensively. We are also encouraging the academics to work with the local stakeholders so that the stakeholders are informed, perhaps annually or six-monthly, of how the research is progressing and how the scope for the research might be changed to adapt to particular concerns. Another aspect is that for us by the time we submitted our application we had spent about £1.2 million so it is a very costly process. For a project in the sea, unlike a project on the land, there is no local plan that says you should be all right here and you might not be all right there, so you might not get consent, and I can see a situation arising quite soon where increasing competition for the use of the sea is going to become a huge issue. The sea is already used, of course, by merchant shipping, for fishing and military use and mineral extraction, and renewables are the "new boy" trying to muscle in and get a piece of the sea bed. It will be very difficult if we do that on an ad hoc basis because ships are only so manoeuvrable. Fishing has areas which they prefer to use and other areas that are less important to them. We have a risk that if we were to consent a substantial offshore wind farm somewhere around the coast, we might regret that in a few years' time because we realise we should have planned it differently. I am very hopeful that the Marine Bill will create this opportunity for a debate about how the sea areas can be used for the benefit of all sea users.

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