Select Committee on Science and Technology Minutes of Evidence

Examination of Witness (Questions 120 - 127)



  120. So you think that any electricity that has been generated by renewables, we should just work our way through it? What is a realistic figure, if we want to use renewables, to set up as a target, or should we not set a figure for that?
  (Dr Martin) No. I think we should be playing a leadership role in the world to develop new renewables technologies and the success criterion for our CO2 considerations should be how much CO2 we can save by other techniques, for example, energy efficiency, fuel conversion, CO2 sequestration. Renewables per se is merely a sub-set of CO2 saving, so I do not think there is a good, bad or indifferent number for a renewables percentage. CO2 is actually the target. It is very beguiling to get off down the renewables course but we must look at the fundamental objective which is CO2 saving in this context.

Dr Turner

  121. Leaving aside the philosophical points which you are raising, I would still like to know what you think is the achievable contribution of wave and tide to just, for example, the United Kingdom, if you leave aside the economic restraints for a moment and look at it purely as a technological challenge.
  (Dr Martin) There is good published documentation. I refer you to the report by Tom Thorpe, published in 1999, where he demonstrated that about 30 terrawatt hours per annum, which is about ten per cent of the United Kingdom's electricity, could in theory (and that was the nature of your question, I believe) be produced from wave and tide.

Dr Iddon

  122. Can I ask you whether you think the renewables obligation, both north and south of the border, is doing the trick in encouraging greater use of renewables and what changes would you make to the obligations, if any?
  (Dr Martin) The renewables obligation is certainly engendering in my company—I start there—a view that it would be economic to build on-shore wind. As I have already said, we have actually done a calculation and put our money where our calculation is. Yes, there is a stimulant as a result of adding £30 per megawatt hour to a company that has a large customer base as ours does. We have a five million customer base. We can make that investment because we can see that the 2010 commitment to renewables we will have to fulfil. Whether it is sufficiently attractive to encourage somebody without that customer base to invest I think is questionable, because a new investment must be bankable and hence the market must be clear. If, for example, all the companies who had an electricity customer base self-supplied with renewable energy by building plants, there would actually be no market for a third party developer to sell his renewable electricity into. It will be interesting to see how the business develops and whether people are prepared to take the risk of investing in what is effectively a merchant renewable generation plant which does not start life with a tied demand.

  123. Some forms of renewables are more advanced in their technological development and even producing, like wind power. Do you think there is an argument for banding the developing technologies and giving them preferential subsidies?
  (Dr Martin) Yes, I do. For the plant manufacturing and UK equipment export reasons I have said, I think the United Kingdom's main contribution to the global position is in technological advancement. Therefore, by banding one can actually encourage new technologies to emerge, so I think there is a potential to encourage those that are further back down the development curve and I think the NFFO mechanism has actually been a good case in point. It has brought down the unit cost of wind energy.

  124. So you would want to see wave and tidal receive more subsidy at the moment than, for example, wind?
  (Dr Martin) Yes, because I believe that the effect of the present system, which is basically a least cost process, will be on-shore wind and that ultimately the amount of that which is built will be controlled by public acceptability issues, not technological ones.

Dr Jones

  125. I take your point, Dr Martin, about the global obligation and the leadership role, but to develop those technologies, to see the investment, do we not need demonstrators here? I get the impression that the companies say: "We have got these ten per cent renewables. How can we provide that obligation?" Is that enough or is it even counter productive where you have just got a situation where the companies are reacting to this Government's exhortation? How can we make companies more proactive in terms of developing these technologies which you think are so important?
  (Dr Martin) Companies develop things because there is potential and because there are economic rewards in so doing. It is as simple as that. At the moment those rewards are not manifest by any other means in the market place apart from a Government obligation. I will give you an example. We have a green electricity tariff. In fact, we have two green electricity tariffs. One is at zero surcharge in conjunction with the Royal Society for the Protection of Birds. The take-up on that tariff is extremely small, presumably because the market interest is not there. That is the only conclusion one can draw. It is very well advertised. There is not even a cost penalty in this particular case. It is the only green electricity product in the market place that does not have a cost penalty, and yet it is not being taken up. Commercial companies react to customer value and at the moment the customer is not seeing it, so regulation in this case through the renewable obligation is being substituted for market forces and that is a legitimate way of encouraging things to happen, as long as it is targeted at the real problem, which is CO2, not an arbitrary renewables number.

  126. You seem to be implying that it is not enough just to have this ten per cent renewables obligation and more needs to be done if we are going to have the potential both in terms of developing the world capability to provide renewable energy, but also for our own economic wellbeing. Potentially there is of course a lot of advantage if we can develop these technologies. What needs to be done to move forward?
  (Dr Martin) Yesterday's announcement of the Carbon Trust was an interesting example. That I hope will produce a carbon trading mechanism in which companies can apply their creativity to the most cost effective and economically advantageous way of meeting a carbon decline requirement. That removes the question of whether it is renewable, energy efficiency, carbon sequestration. All of that gamut of technologies is then available and we actually address the primary objective function, which is climate change, not some construct, which is renewables.


  127. We have overrun by only three or four minutes. I think we have done extremely well. Dr Martin, you have given us an enormous amount of information. Some of it has raised our eyebrows, only because we probably had not thought of one or two things. Your point that we should be concentrating more on providing equipment properly proved and tried for China and India than we should be using it ourselves is something we shall take note of. Thank you very much indeed. I do not know where you have travelled from today.
  (Dr Martin) From Perth in Scotland.

  Chairman: Thank you for coming so far and for helping us this afternoon on this Committee. We wish you a safe journey home.

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