Examination of Witnesses (Questions 220
- 239)
WEDNESDAY 30 JANUARY 2008
MR NICK
HARRINGTON, MR
JEFF ALEXANDER,
MR RAVI
BAGA AND
MR KEVIN
MCCULLOUGH
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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