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

Examination of Witnesses (Questions 250 - 259)



  Q250  Chairman: May I welcome our first panel of witnesses this morning to the renewable electricity-generation technologies inquiry: Mr David Sowden of the Micropower Council; Mr Allan Jones of the London Climate Change Agency; Professor Gordon MacKerron of the University of Sussex on behalf of ESRC; and Mr Brian Samuel of the Energy Saving Trust. Currently, microgeneration for heat and electricity accounts for less than 10% of the UK's supply. Is it likely to increase significantly in the next five to 10 years?

  Mr Sowden: First of all, thank you for inviting us to give evidence. The answer to your question is it is almost entirely dependent on the policy framework. There are significant regulatory barriers still remaining to the uptake of microgeneration both in the electricity and the heat sectors and those fuse together obviously in the CHP sector. In particular, tackling existing housing is a notable challenge. We have government policies, which as an industry we very much welcome, to move to zero carbon homes for new build from 2016 onwards, but we do feel there is a significant policy deficit in the existing built residential sector. The extent to which Government is prepared to introduce further policy making to boost the microgeneration industry will have a very significant bearing on whether or not we see a substantial increase from today's numbers.

  Q251  Chairman: The DTI produced a report which was looking at microgeneration and concluded that by 2050 some 30-40% of the UK's electricity supplies could be produced in that way. Do you think that is a realistic target and, if not, what do we need to do to get to that target?

  Mr Jones: I think that is a potentially realistic target, particularly if policies that have been implemented in London are replicated elsewhere in the UK. As I am sure members are aware, we have particular policies in London that do not relate to elsewhere in the UK. That is driving the CHP market, it is driving the renewable energy market and it is beginning to drive the microgeneration market. It is quite right to say that existing owner-occupier is the most difficult area to treat from larger decentralised energy systems and so, providing the regulatory barriers are removed, we are certainly in a position where ESCOs (and I am also a Director of the London ESCO) would be interested in providing such technologies on long-term contracts. The regulatory system at the moment is really geared around centralised energy and not geared around decentralised energy or microgeneration, and the potential is huge. There are over 20-odd million homes in the UK. Most of the owner-occupier market is going to need to replace their boilers over the coming years. Therefore, the prospect of domestic CHP, the increasing scale of microrenewables and the potential is quite significant. I know ministers have said about the eight core cities and other RDAs. I think there is a mechanism for Government to use to replicate what has been done in London in other parts of the UK.

  Q252  Chairman: Given that, do you feel that the 30-40% target by 2050 is achievable?

  Mr Jones: Providing the regulatory barriers are removed.

  Q253  Chairman: Professor MacKerron, do you agree with that?

  Professor MacKerron: It is certainly possible in such a long timescale. There are a number of things that could be done at a national as well as at a local level. The report that we did at Sussex, published about 18 months ago, on microgeneration made two main points about national level changes. One was a change in the fiscal system to allow capital allowances for householders; in other words, for investment on the demand side to be treated equivalently to investment on the supply-side and that would be a major improvement to the economics. Other people here are more qualified to talk about this than me, but there is the issue of whether or not householders with excess electricity can sell their power back into the system at a fair rate. That in itself depends upon better metering technology, which is currently under trial. If those sorts of measures and the things that Allan has just mentioned were put in place then it is certainly feasible, but far from certain, that one could reach such a level.

  Q254  Chairman: The Renewable Energy Association told us that the Government's promotion of microgeneration technologies to date has been largely "unhelpful". Do you think that is a fair assessment?

  Mr Samuel: It is an interesting opinion. Historically it is clear that microgeneration has lacked the investment that other technologies have actually received, so in that respect there has not been sufficient support. There are a number of barriers that need to be tackled. There is the upfront cost barrier that still needs further work on. You need to look at the regulatory issues around planning which are currently being progressed. We are optimistic about a positive announcement soon. There is also a lack of long-term incentives for heat in particular. I know this focus is on electricity, but heat is crucial for microgeneration technologies. There is a lack of investment in the supply chain, training installers and providing that long-term framework required for people to invest in new technologies. It is also about raising awareness and providing information to consumers and making sure that consumers understand the full benefits. The Government has not been supportive in the past of microgeneration. However, there are opportunities to be taken now that can move the microgeneration agenda forward so that we can realise the targets that are potentially achievable.

  Q255  Dr Gibson: There is an opportunity coming up in 2012 that you will know about, Allan. What are you going to do with the Olympics in terms of microgeneration?

  Mr Jones: The Olympics is not really a microgeneration project as such.

  Q256  Dr Gibson: Why not?

  Mr Jones: It depends what you regard as microgeneration. I am using the technical definition here. You are talking about a system that will have probably 50 or 60 megawatts of a trigeneration system, which is currently being procured by ODA, overlaid with at least 20% renewables, much of which will be large scale, but there will also be photovoltaics. Yes, individually those technologies are micro but collectively they will be streamed together, so they will be in quite big systems.

  Q257  Dr Gibson: How do you make the decision about which source you use?

  Mr Jones: In London we have the London Plan. So whether the ODA wanted to do it or not, they were caught by the London Plan. They will have had to have put in decentralised energy. They will have had to have put in at least 20% renewables. We are seeing other major developments that are also going down that route. Just looking at CHP, for example, with the current batch of large developments there is well over 100 megawatts.

  Q258  Dr Gibson: So if we were going to boast to the world that the Olympics are going to be the best, what is the best that you are going to provide?

  Mr Jones: I think there might be projects that might happen before the Olympics that will be better than the Olympics in terms of renewable energies.

  Q259  Dr Gibson: Such as?

  Mr Jones: Some of the projects that are currently happening at the moment in Elephant and Castle, King's Cross, the Greenwich Peninsula. The Greenwich Peninsula is interesting. It is just across the river from the Lower Lea Valley—

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