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

Examination of Witnesses (Questions 320 - 339)



  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 arrangements.

  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 voltage transmission.

  Chairman: We cannot put them next to each other?

  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 that question.

  Chairman: You should be a politician, Paul.

  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 for micro-generation?

  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 technical solutions.

  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 expert.

  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 judge.

  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 the percentage?

  Mr Whittaker: The IFI incentive that Ofgem referred to—

  Q336  Dr Turner: What is the actual percentage?

  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, yes.

  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 about that?

  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.

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