Examination of Witnesses (Questions 356-359)|
TUESDAY 20 NOVEMBER 2001
356. Mr Byers, perhaps you would introduce your
colleagues and we will get started.
(Mr Byers) Certainly. If I can just announce that
the Renewable Power Association is a fairly new trade body, it
commenced to take members about the middle of this year. Its objective
is to represent all technologies on generic renewable power issues.
Membership includes generators, fuel suppliers, equipment suppliers,
technologies such as wind, solar, biogas, energy from waste, landfill
gas, biomass, wave, tidal, marine current and sewage gas together
with respected names from the service industry, such as accountants
and consultants. On my right is David Williams, Chief Executive
of a major biomass generator, EPRL, also the Deputy Chairman of
British Biogen and he is here representing the RPA as a member.
On my left is David Milborrow, who has been involved as a freelance
consultant for many years in renewables, 23 years. He is also
the Director of the British Wind Energy Association but represents
here the RPA as a member. Myself, I am the Chief Executive and
I have been involved in all aspects of energy for 25 years.
357. Thank you. This is a viewpoint here, this
is an attempt to create a federation, we have the British Association
for Biofuels and Oils and the British Hydropower and the Solar
Trade Associations, are you trying to get an umbrella organisation
for all of these other ones or are you in competition with them?
(Mr Byers) We are not a trade association of trade
associations, we are attempting to be some sort of integrating
force to represent our members and the general views of generators
who want to put renewable power on the ground. We do have many
of those companies directly, even those in first tier trade associations.
They can also become a member of this umbrella group, the RPA.
We specifically try and recommend the views of generators who
are actually putting their risk investments on the ground.
358. Mr Byers, you note in your submission that
the Non-Fossil Fuel Orders reduced the prices down from an average
of 5.5 pence per kilowatt-hour under the Non-Fossil Fuel Obligation
1 in 1990 to 2.71 kilowatt hour under NFFO-5 in 1998. Yet commissioning
success rates varied widely, and were particularly poor for wind
energy. Was there any particular reason for this?
(Mr Byers) I think the bulk of the NFFO contracts
are in four and five, the early ones were not too numerous in
terms of capacity. It was certainly the government's intention
to try within technology bands to force the price down, either
by encouraging competition or by using more modern technology
with lower costs. I think we would be fairly honest in saying
that some of the bids made were speculative; they did not have
connection costs; they were not sure what the planning difficulties
were going to be. I think the completion rates of NFFO-5s are
pretty miserably low to be honest. Why has that happened? Partly
there was some duplication where two NFFOs are held on same site.
Planning has been particularly difficult for certain technologies,
one might mention wind specifically, and also certain types of
biomass, energy from waste. Some of the bids made were actually
uneconomic when the connection costs, which have been mentioned
by David Porter earlier, are anything up to £1 million per
megawatt. If your present value is half a million and the connection
cost is £1 million, the arithmetic is very simple. There
are a lot of remaining NFFOs and SROs to be built, but planning
is a difficulty and some are uneconomic at the prices bid.
359. Can I just ask about the planning, this
is the second set of evidence this morning when it has come up
as a major issue on renewables, do you think it is because energy
generators have gone for what have been perceived as extremely
sensitive sites and if they concentrated on sites that were less
environmentally sensitive they might have had more success?
(Mr Byers) I think there is some truth in that, you
go for the top of the hill, where it is windy, if possible. Certain
restrictions do apply on biomass plants areas. We have made some
recommendations in the forthcoming consultation on what is called
PPG 22. It is a difficult problem. Local politics tends to get
in the way in terms of the number of areas where approval hasn't
been given. We would like to see a non-dictatorial approach and
actually some convergence between local implementation and what
is government policy to promote renewables. I know David on my
right has some particular examples of what it is like getting
through the planning cycle. Along with European Directives encouraging
it, unless we address and streamline the planning process it is
unlikely the government will get anywhere near its target.