Examination of Witnesses (Questions 100-105)
Ms Juliet Davenport
31 MARCH 2008
Q100 Lord Rowe-Beddoe: Thank you.
Referring then or coming back to the micro end of the market which
you described yourself to be involved with, and obviously I am
interested in, first of all, two things: could we do more to ensure
that the public at large is made aware of microgeneration? And
two, if we are going to drive it, I heard you mention the word
grant, I prefer to use the word incentive perhaps, but I mean,
what are we doing? We hear horrendous stories about how much some
solar panels cost to put on a roof, and therefore, unless there
is some, I suppose, incentive to do it, relatively few of the
percentage of the population will either be interested financially
to do it—well, financially, largely, to do it. So what can
we do, to publicise it, drive a programme, and let everybody see
that the Government is going to put some economic clout behind
your end of the renewable business.
Ms Davenport: From my point of view,
I think publicising it would come off the back of doing something
properly in the area, because it is actually very easy to publicise,
in the sense it grasps people's imagination: my house is my castle,
I generate my own power, it is a thing that people move towards
quite easily, in terms of communications. I think if you were
to do anything on communication, it would be around explaining
how it can be a risk offsetter rather than just a payback period
in terms of energy, because that is how it is generally pitched
from an engineering point of view.
Q101 Lord Rowe-Beddoe: A risk offsetter,
excuse me?
Ms Davenport: In the sense that you are
buying an insurance policy for the future against future energy
prices, and I think that could be quite a significant pitch into
the—we like insurance policies generally, so I think that
is an important point. In terms of incentives, I think you have
to create an incentive that works on a micro level, and one of
the issues for us is it is very difficult to put the metering
in, it is very difficult to get these things accredited; there
has to be a streamlined process in all of this, because it is
incredibly hard to do, unless you are really committed, you have
got several degrees probably in law, it is very hard to get accredited
in terms of getting ROCs for these sites. We do it for our customers,
but it is not a straightforward process, so you have to get rid
of some of the red tape for the smaller generators, and you also
have to look at what other issues affect it from the wider energy
sector; the metering, the regulation side. So I think from those
points of view, in terms of incentives, our incentives at the
moment are a form of grant, they are an upfront capital grant.
Q102 Lord Rowe-Beddoe: Is the public
generally aware?
Ms Davenport: Well, they are sold out
every time, because there is a certain amount allowed each month
and they are just completely oversubscribed. So I think you really
have to look very carefully, from an economic point of view, what
is the best way to do this? My view would be if you wanted to
incentivise microgeneration, there is a proposal to give it two
ROCs per megawatt hour; put three or four ROCs on per megawatt
hour, make sure there is a decent incentive to do it. Finally,
one of the things we have seen in other countries that have been
successful is government has underwritten loans initially, so
that banks will actually loan against this technology. There are
green mortgages being offered, but people do not necessarily want
to remortgage their house, again, it is more red tape. What they
want to do is go and sign up to a normal payback loan where they
can just get some form of non-backed up loan—I am trying
to avoid mentioning any particular names of companies. Just like
you would if you bought a boiler in your house.
Q103 Lord Rowe-Beddoe: A finance
company?
Ms Davenport: Yes. It is very difficult
to persuade them to do this right now. So there needs to be some
unlocking, there is small unlocking all the way through the process
basically.
Q104 Lord Rowe-Beddoe: Forgive me,
My Lord Chairman, last question from me anyway: if you were to
set an industry objective for microgeneration, what would you
think? You are writing the business plan for the industry: what
would you say your five and then ten-year objective would be for
microgeneration in the United Kingdom?
Ms Davenport: Well, I think the first
thing would be to get a standardised test technology that is proven
across the UK where you should implement it, so we do not have
these stories of trying to put micro wind turbines in Central
London where they do not work; you do put them in the appropriate
technology places. That is number one, because you get bad news
stories, it is like the double glazing market, you have to be
really careful about this, public perception is very, very important.
So you make sure that these things are accredited properly, and
then in terms of trading standards and all these types of things,
very, very well policed, that is number one. Number two, you put
in a long-term incentive programme; as I said, my view is you
use an existing system, I know there are talks about new systems
to be used, but I do not think you should throw away the existing
ones, I think it works perfectly well if you just increase it.
So you say three to four ROCs per megawatt hour for those, you
look at the banking system, you say the Government will support
this in terms of some kind of interest-reduced loan for individuals,
they will underpin this process. So, I think those three would
be significant movement forwards. I think if you are going to
look at any other areas, you look at R&D into solar, you look
at basically giving incentives for companies to come into the
UK, invest in renewable research and development in these technologies,
taking them to the next stage of efficiencies, because we have
the basic technology, we just need to move it forward now, as
against more changes.
Q105 Lord Rowe-Beddoe: So with this
clean sheet of paper, we now know the building blocks, what would
be your objective in terms of the percentage of the current electricity
take-off in the United Kingdom you think you could or would want
to generate from microprocessors in ten years, let us say?
Ms Davenport: I think it would be 5%,
but I think what you would also get from that would be a reduced
energy usage in those places, so there is a double whammy almost.
I think you would start looking at intelligent technology that
would switch your washing machine on when it is windy.
Chairman: I think we are going to have
to stop there, but I would like your co-operation and help in
a slight innovation in how we produce reports. I think the Committee
would like you each to suggest a microgeneration installation
where we could visit, hopefully not too far from London, so that
we could, for the benefit of our colleagues, take photographs,
perhaps, with diagrams of where the installation is sited, what
it is supplying, and also, as and when, if it is possible, when
we come to visit you, to explore further some of the incentives,
the feed-in tariffs, the subsidy for the loans, the renewables
obligation multiples, et cetera, et cetera. The reason I say that
is that although both of your pieces of evidence have been extremely
clear, if I might say so, and very helpful, I think for the benefit
of all our colleagues in the House of Lords when we report, I
think to demonstrate what a microgeneration example is, or two
or three examples, would be very helpful. I think we can all visualise
what the Severn Barrage will look like, all 15 kilometres of it,
but I think it would help us if you could, in consultation with
the clerk and our specialist advisor, pick examples, and we will
come and visit, if we may. It is bang on 6.00, thank you very
much indeed for coming, the session is closed.
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