Examination of Witnesses (Questions 320
WEDNESDAY 12 MARCH 2008
Q320 Dr Turner: Can you give any
timescale on this?
Mr Steve Smith: I think it is
an excellent question. As Paul was saying, some of the commercial
responses from wind farm developers, particularly looking at,
say, the Scottish Islands or the north of Scotland, is looking
at exactly that. If it is going to take us nine years to get the
transmission lines built onshore, then can we move offshore and
come in and connect at other points on the system? It is certainly
something on our radar screen. The mechanism that we have been
developing with BERR to create licences for offshore transmission
was borne in an era when we were thinking about offshore wind
farms and connections there. Obviously we need to make sure that
if people want to do that because it may be eminently sensible
and even if it is a bit more expensive, if it gets you there six
or seven years earlier, then there may be good reason for that.
We will need to make sure that the regulatory arrangements allow
for people to think about doing that. It is an issue we face in
the gas system where people have done exactly that; they have
looked at the cost of building gas pipelines from Scotland down
to the south onshore and then said, as the Norwegians did recently:
no, thanks very much, we will bring our pipe in closer to where
it is actually used. We will definitely do what we can to make
sure that if people want to do that, they can within the existing
Q321 Dr Turner: Do you feel that
there is a prospect of an offshore grid network, which is more
flexible than the landward can possibly be?
Mr Steve Smith: I think if you
work back from the 2020 targets what that would mean potentially
in terms of the levels of renewable generation, then you start
to think that there may well be an offshore network because to
deliver 40% of our energy from renewables, there just probably
are not enough sites onshore and a lot of it is going to have
to be offshore. I think BERR are doing a big project at the moment
to look at the scenarios and what 2020 and delivering that might
mean. I would not be at all surprised if the outcome of that is
a lot of offshore renewables and something that looks more like
an offshore grid than a few single pieces of wire connecting in
from large offshore wind farms.
Q322 Dr Turner: So the electricity
proposal is not too far fetched?
Mr Steve Smith: I think there
is a lot more work to be done. With the 2020 targets, I think
it is probably less far fetched than perhaps it appeared at the
time it was first mooted.
Mr Rogers: To add a point to that,
I would agree with what Steve said there. I think it is an aspiration,
something that needs to happen, but I really caution against the
issues with offshore. They are very, very difficult. If you have
a cable fault offshore, as we have on one or two of our wind farms
at the moment, you have major problems to be resolved. If you
have a grid system like that, then security of supply becomes
a very much more pertinent issue than it does onshore.
Chairman: Could I ask both Steve and
Paul: when in fact you were bringing in North Sea gas and we were
distributing it all around the United Kingdom, why did we not
just simply put a power trench in at the same time so that we
would have a completely new grid everywhere? That is exactly what
I did in Harrogate when we the cable operators were coming in;
we put a cable in for CCTV across the whole town at the same time.
Did nobody ever think of that?
Dr Turner: It is the physics of high
Chairman: We cannot put them next to
Dr Turner: No, it is the reason why we
have very high voltage overhead grid lines; it is basic physics.
Q323 Chairman: Is that the answer,
Paul, so it is basic physics?
Mr Whittaker: I will defer to
the expert on that.
Q324 Dr Turner: I am not the expert.
Mr Whittaker: Neither Steve nor
I were around at the time. Perhaps that will absolve us from answering
Chairman: You should be a politician,
Q325 Mr Cawsey: In my constituency,
we have just gone through a very long and tortuous process to
get two large wind farms finally approved by the Minister a couple
of weeks ago, and so I have met people with all sorts of views
on renewable energy, both positive and negative. Over and over
again, I come to the point about it is only when the wind blows
and so you get intermittent supply. It strikes me that whilst
renewable energy is such a small overall percentage of the supply,
that is not a huge great problem, but it is what happens next
that matters. We have just been speaking about the 2020 targets
and perhaps 30 to 40% of electrical supply might come from renewable
energies. Is that going to cause a transmission and a grid network
problems when it is at that level? I will ask a second question
attached to it. Is there a threshold, which if you went over it,
you would start to have concerns that there is too much renewable
and therefore surety of supply is at risk?
Mr David Smith: The premise of
security of supply is having a balance; it is not putting all
your eggs into one basket. I was at an event last night when the
Energy Minister was speaking on this very subject. He was saying
that maybe there is nuclear, there is certainly some gas in there,
and we are looking again at carbon and clean coal as well as renewables.
I think a sensible approach is to say that you cannot just have
one, that there is intermittency, you are absolutely right, and
you have to make sure. The Grid has the difficult job at times
of making sure the system is well balanced and from their perspective
I guess, without putting words into their mouth, they need to
make sure that the generation is balanced to meet their needs.
Mr Whittaker: I would agree that
large-scale renewable on the network is likely to mean that the
way that we control it is different from the way that we have
in the past. We are in a number of joint research projects with
our European transmission colleagues, other transmission companies,
trying to understand what the impacts of coping with that is.
We are confident that those challenges can be met. We have seen
them met in other European countries. We think we can learn from
their good practices and potentially some mistakes that they have
made along the way. We recognise it as an issue and we are working
hard to make sure that we have the control systems and the information
in place to cope with it as it arises. The intermittency question
is quite an interesting one. Although on a day-to-day timescale
wind is not particularly predictable, from hour to hour you get
quite good predictability by looking out of the window and seeing
whether the flags are flying. The characteristics are different.
Intermittency is a feature of wind, but there are mitigating factors
as well to take into account.
Mr Rogers: On the general diversity
question here, it is not only wind; biomass can run 24/7; photovoltaics
obviously will produce power when the sun is shining. Even with
wind, if it is across different parts of the country, there is
a degree of diversity from that. It is not all bad news with renewables.
Q326 Mr Cawsey: David, from your
answer, you have implied that basically there is a threshold and
so you have got to have a mix.
Mr David Smith: No, I was suggesting
that there still needs to be a mix however and wherever you are.
There is an energy mix and that energy mix needs to be there.
I do not know what the threshold would be.
Q327 Mr Cawsey: There is no percentage
for someone to say there is a problem?
Mr Steve Smith: You do need to
recognise that it will probably require profound changes elsewhere.
If you take the 40% to meet the 2020 target, for example, that
would mean at the various points of the year, and so, say, in
the summer at night if a significant proportion of that wind was
generating, they would be generating more than there is demand
for on the system. It does begin to point you towards looking
at measures downstream. It probably means for customers much more
variable electricity charges depending on when the wind is blowing
and encouraging customers to do things they do not do at the moment
through smart metering and those sorts of things; for example,
encouraging them to shift their demand into other periods of time.
I think anything is feasible and do-able and there is not a percentage,
but the consequence is that the more winds you have become more
profound in terms of the way we use electricity, both probably
as domestic users but also as industrial users as well.
Q328 Mr Cawsey: It is not always
the same in different parts of the country anyway. The combined
power plant in German network is 36 renewable installations to
give a steady power supply. Is that an approach we might adopt
in the UK?
Mr Whittaker: I am nervous about
predicting what this mix is going to look like in 15 years' time.
Steve talked about the potential for active decisions by consumers
around managing demand. There are other examples around the world
of consumers putting a black box in their homes and giving access
to their appliances directly and passively, requiring no effort
on their part. There is a range of technologies, some of which
we have not thought of yet, which are going to be deployed to
manage this situation. Inevitably, given the uncertainties associated
with a large wind generation fleet, you are going to have to have
back-up which might be provided by efficient carbon plant, might
be provided by energy storage, other means. When we get there,
we will have solved the problem and we will have deployed the
technologies that are appropriate at the time. I am reluctant
to predict specifically which technologies we will deploy. The
answer is that it will be a mixture of them.
Q329 Mr Cawsey: Earlier today, you
have all told us a bit about the challenges with the Grid management
for the large-scale wind farms. You spoke about Scotland and all
the rest. Are there similar challenges or different challenges
Mr David Smith: There are challenges
because obviously if you are generating your own electricity,
then there is the possibility if you over-generate to sell that
back into the networks, in effect. Moving to active networks has
challenges for us because at the moment it is a very passive network
that we are operating. The generators pass it through the system
and putting it back into the system has its own challenges, but
we are actively working to look at meeting those and working through
Q330 Dr Blackman-Woods: Can you briefly
outline how intelligent grid management technologies function?
Mr Whittaker: The idea of an intelligent
grid perhaps goes back to the point I made just now that the grid
can actively manage both the supply and the demand side and can
balance using a wider range of tools than the tools that we currently
have. At the moment, it tends to be turning up or down fossil
fuel plant to balance supply and demand instantaneously. In the
future, we might have a wider range of tools, perhaps involving
large consumers' plant and interrupting that on a periodic basis.
If you have access to people's individual fridge freezers, perhaps
turning those off a few seconds, but if you have access to 100,000
of them, that has the same effect as turning on or turning up
a coal plant for balancing purposes. What we are talking about
is deploying a wider range of control tools to enable us to deal
with the kinds of problems presented by moving toward a more renewable
generating base. That is obviously not an area on which I am an
Q331 Dr Blackman-Woods: EDF are saying
that there is not enough market "pull" to support the
adoption of these technologies. Do you agree with that?
Mr Whittaker: I think that is
something that will evolve over time. We operate in America as
well. We are familiar with experiments that are being done within
distribution networks across the States to look at ways that you
can passively involve consumers in managing supply and demand.
It is too early to draw a line under that technology. I am sure
that that sort of technology will play a more active role (no
pun intended) in the future.
Q332 Dr Blackman-Woods: Would your
assessment be that the UK is leading in technological developments
in this area?
Mr Whittaker: That would probably
be too bold a claim but I am not really close enough to it to
Q333 Dr Blackman-Woods: What about
whether the research base is adequately supported? Do you have
a view on that?
Mr Whittaker: We are certainly
active in research in some of those areas and looking at how that
technology can be deployed, but it is on a relatively small scale.
It will be technology we are involved in deploying but it seems
to us at a reasonably early stage. We are involved in a few projects
looking at what can be done.
Q334 Dr Blackman-Woods: Why is it
too small a scale? Does it need further investment?
Mr Whittaker: No, I think its
time will come. In the early days of developments of a technology
the sums involved tend to be small as well.
Mr David Smith: If you look at
something like the Woking Borough Council's piece of work on energy
initiatives, what you are seeing is small scale that will look
at the technology, how it is done, and then replicate it out on
a big scale. I do not think you can simply impose a big scale
because that would be too difficult, but there are small-scale
projects around the UK.
Mr Steve Smith: We mentioned in
our written submission that we introduced explicit funding at
the last distribution price control reviews in innovation and
funding incentives and also something called the registered power
zones. That was recognising at that moment customer pull for this
is embryonic to give companies a positive incentive to say that
if they want to take part of their grid and experiment with some
of these technologies, then there is funding to do so. We have
now rolled that out to cover the electricity transmission systems
and the gas distribution systems. I think a big feature of the
distribution price control we are about to embark on will be exactly
that: what is the appropriate level of funding at this stage of
development to encourage the companies to experiment with some
of these technologies.
Q335 Dr Turner: To Paul, you may
disagree but I think it is probably fair to say that since the
demise of the old Stalinist CEGB, which invested quite heavily
in R&D and sadly most of it in nuclear, there has been very
little R&D in transmission technologies, energy storage technologies
or grid management technologies. How much of the National Grid's
turnover for instance at the present goes into R&D? What is
Mr Whittaker: The IFI incentive
that Ofgem referred to
Q336 Dr Turner: What is the actual
Mr Whittaker: It is 0.5% of turnover.
For the electricity transmission grid that amounts to something
like £5 million a year; for the gas transmission grid it
is about the same. We are talking about slightly above £10
million a year in aggregate, which we are deploying on research
into technology which will address exactly those issues. I would
agree with Steve's comments and with your comment that that research
did not carry on following the demise of the Stalinist CEGB, as
you described it. There has definitely been an upturn in research
as a result of the incentive. On top of that, we are able to deploy
funds that we can access from other sources as well. We are involved
in a couple of joint projects funded by the European Commission;
there is work funded by BERR on designs for future transmission
technologies. There has been a pick-up in the research area over
the last two or three years. On top of that of course we encourage
equipment manufacturers to engage in research in areas where we
think they should be deploying technology.
Q337 Dr Turner: Do you plan to step
up your R&D efforts because half a per cent of turnover is
pretty low, even by British standards, for UK manufacturing or
engineering businesses? There is now a very strong imperative
in that we have to completely transform our electrical generation.
There is a strong imperative for the outcomes of such R&D.
Do you plan to expand?
Mr Whittaker: I was going to say
that we will be deploying those funds fully and accessing other
funds that we can to meet the future challenges of the transmission
networks that we operate. If we do not think that that is enough
to meet those challenges, then we will have to look to spend more,
Q338 Dr Iddon: I used to work in
a university where they had an electrical engineering department
that trained people for high voltage work; that has all gone.
There was a suggestion earlier that one of the problems of connecting
people to the grid was a shortage of people. Somebody mentioned
that. I am not sure who it was. My question is: is there a dire
shortage of skills in your industry?
Mr Rogers: Yes, absolutely, in
all areas, and engineering and high voltage work in particular,
and I guess general offshore deployment is a general area where
we are lacking in skills.
Q339 Dr Iddon: Is anybody doing anything
Mr Rogers: E.ON is certainly taking
various initiatives with others to stimulate through universities,
schools and so on but it is a long-term process.