Select Committee on Trade and Industry Minutes of Evidence


Examination of Witnesses (Questions 356-359)

MR DAVID BYERS, MR DAVID WILLIAMS AND MR DAVID MILBORROW

TUESDAY 20 NOVEMBER 2001

Chairman

  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.

Mrs Lawrence

  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.


 
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