Examination of Witnesses (Questions 250
WEDNESDAY 12 MARCH 2008
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