Select Committee on Environmental Audit Minutes of Evidence


Examination of Witnesses (Questions 40-44)

MR DAVID GREEN AND MR GRAHAM MEEKS

WEDNESDAY 30 JANUARY 2002

  40. Do you think there are adequate links between that programme and another such as the quality strategy and the neighbourhood renewal, is it joined-up?
  (Mr Green) Not as much as one would hope. We were certainly frustrated that despite the excellent commitment there is to Community Energy it is not as strongly represented in the government's strategy as it might have been. I think when DEFRA come to develop that more we will want to make sure the links are stronger than they have been in the past. It is the case that energy efficiency is in a completely different department to housing, it is not entirely clear how those links are going to be developed in the future, it is separated now, you have the planning function in DTLR, you have energy efficiency in DEFRA and you have energy policy in DTI. All of us are going to wait with bated breath to see what the PIU recommend and whether we get some greater synergies between this. We would all like to see it, Chairman.
  (Mr Meeks) If I may, a further point, the programme as it stands at the moment is set to run for two years, £50 million over two years, it is a very welcome injection of capital to the sector which has suffered from problems over access to capital, and so forth, as being a constraint. I think it is important to put that in perspective, we are talking about a two year life span for the programme at the moment, which is very helpful, if you like, in bringing forward some schemes which have been there or thereabouts for the last few years and can see that that extra capital is sufficient to make them viable. I would question whether two years of funding is really sufficient to help develop a sustainable industry in the long run. I find it difficult to envisage that a large number of our members are now going to gear up with a massive level of investment when it may dry up in two years' time. It is a great opportunity for the sustainable industry in that it has a life but I think we need a longer time horizon than two years.

Chairman

  41. Obviously the Government would want to kick start something but not have it permanently there, what are you suggesting?
  (Mr Green) Ideally what we would like to see is you have a two, maybe three or four year programme to develop the technology. You do not put these schemes in quickly, they take a while to physically install. To develop the CHP system in Sheffield has taken 10 years. There was no state involvement in that, it was financed by the private sector. This scheme will help reduce the pay back period but it will probably take more than two years to get a new scheme up and running, that is why I think it will need a life beyond two years. In the longer term we are talking about bits of capital infrastructure where we either have to find creative ways of funding it through the private sector, as you do with other networks, be they railways, be they electricity infrastructure, or you need to find ways of integrating more directly into the more conventional ways of funding housing in the United Kingdom, either through the Local Authority or the Housing Corporation. If you begin to see that there are going to be some real benefits. At the end of the day, apart from the commercial loads that are connected, that is a straight commercial decision, when you are talking about local authority estates it is another form of housing improvement, basically all you are talking about in those areas is instead of putting in gas central housing or a gas boiler you are connecting to a pipe in the street. You still have the issue about how to get the energy in the first place, it depends on the situation, really.

Mrs Clark

  42. It has been most interesting. Finally, would it be fair to say, shoot me down if I am wrong, your feeling about all this is that the Government have been very swift to praise CHP in speeches, indeed when ministers have come to this Committee they have very much trumpeted the values of CHP, that is all good words, but in terms of action so far there has been precious little?
  (Mr Green) Yes would be the short answer, Chairman.

Mr Jones

  43. One question, when you spoke about giving incentives to housing associations, councils, and so on, in putting CHP schemes in my mind I went instantly to my constituency where I have two large council estates and they have an interesting community development in what are called the boiler houses, that is because when they were boiler houses the community heating projects were enormously expensive and enormously inefficient and we found a different use for them—that will be a fairly common experience of councils up and down the land, who may have had some reluctance to embark on the schemes. How are you going to dissuade them or persuade them that the new schemes are going to be successful, whereas the old schemes were disastrous?
  (Mr Green) We would like to persuade them by example. We have, with our members, on several occasions taken tenants and groups of councillors to visit new CHP schemes, Sheffield is an example, the first was 11 tower blocks connected by the city council to the system. There is London Electricity, they have done it under a PFI Pathfinder scheme, a CHP scheme, in Tower Hamlets and that has reduced the heating bills dramatically in the properties. We also want local authorities, if they are minded, to consider schemes such as the ones that we were closely involved in with St Pancreas and the Humanist Housing Association next door to Euston Station, they put a small CHP scheme in the old boiler house, this got rid of standing charges for tenants from local electricity and the overall energy bill came down within a year by 20 per cent. Those are people who would otherwise be on the streets, because they focus specifically on long-term homeless in St Pancreas and the Humanist Housing Association. There are other similar ones round the country that are good examples of the way you can get it without necessarily having to go for a large scheme with major pipe runs. That scheme is 100 flats in a relatively small area. We hope that by local tenants and customers talking to each other people will see the benefit of if. It is a challenge for the industry and we hope that by seeing good practice it will help people to see it can work and does deliver

Mr Francois

  44. Presumably you would argue that a lot of the schemes that have not worked—I can think of one estate where there have been similar problems, that they are based on 1960s and 1970s—you would acknowledge that you are over 30 years more advanced and lessons have been learned.
  (Mr Green) One of the key issues is it can detect where a leak occurs now as in other diagnostic technology and you can locate it within a matter of feet. They make things a lot more do-able with advances in heating control, you can control the heat in the building much more than you could in the past.

  Chairman: Thank you very much, indeed, that was an extremely interesting session.





 
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