RECOMMENDATIONS AND CONCLUSIONS
1. We agree with the value of a target for renewable
electricity generation but we must not lose sight of the principal
objective, which is to introduce non-polluting, sustainable forms
of energy on a large scale (paragraph 15).
The Government endorses and takes note of this recommendation.
Diverse forms of sustainable energy will not only help to meet
our low carbon targets but will strengthen our security of supply.
2. The EPSRC has a large area of science to fund
but it is hard to accept that energy research, given its economic
and environmental importance to the UK, should receive such a
small slice of the cake (paragraph 22).
In addition to the £9M spend on low and non-carbon
technology research in 2002/03 the Engineering & Physical
Sciences Research Council (EPSRC) supported £68M in blue
skies research with potential relevance to low or zero-carbon
energy technology. The importance of the sustainable energy agenda
is recognised in the recent launch of the SUPERGEN (Sustainable
Power Generation and Supply) programme (in conjunction with Biotechnology
& Biological Sciences Research Council—BBSRC, Economic
& Social Research Council—ESRC, Natural Environment
Research Council—NERC), which will invest £25 Million
over 5 years and the Carbon Vision programme which is jointly
supported between Research Councils and the Carbon Trust.
3. Half the membership of the EPSRC's council
is from industry and we fear that this may lead to conservatism.
We regret that technologies with the potential of wave and tidal
or hydrogen are given so little funding. The EPSRC should be given
a stronger lead by Government to ensure that investment is consistent
with wider energy policy (paragraph 23).
EPSRC experience of industrial representatives on
both the User Panel (UP) and Council are that they are visionary
and well aware of the importance of funding high risk/high return
research. The industrialist representatives come from a diverse
range of backgrounds and bring excellent complementary expertise
to Panel and Council members from university backgrounds. Industrial
representatives on UP and Council have been strongly supportive
of the need for long term visionary research.
As part of the first tranche of funding under the
SUPERGEN Programme two major research consortia in the areas of
hydrogen (£3M) and wave and tidal energy (£2M) have
recently been approved.
4. We appreciate that striking the right balance
between funding applied and blue-skies research is difficult but
we urge EPSRC to ensure that researchers with innovative, if risky,
projects get the funding they need (paragraph 26).
EPSRC has for a number of years been actively encouraging
its research community to submit high risk/high return research
projects and has been actively briefing its peer review community
to take due account of highly adventurous proposals as part of
the assessment process. To further promote adventurous research
the EPSRC recently issued a £4.5M adventure fund aimed specifically
at supporting multidisciplinary adventurous research.
5. We agree with the Government that there are
merits in placing fusion research under the auspices of the EPSRC
but we have reservations about its commitment to the technology.
To maintain the UK's position in this field, we believe it should
remain a special case for funding with a ring-fenced budget. We
will be watching the operation of the new funding arrangement
for nuclear fusion research at Culham with great interest (paragraph
28).
EPSRC formally took budgetary responsibility for
the Fusion Programme on 1 April 2003. EPSRC recognises the importance
of active engagement between Culham and the broader UK academic
community and initial steps have been taken to facilitate this
including providing Culham with access to High Performance Computing,
funding for research networks and CASE studentships. An external
Fusion Advisory Board has been established to advise all the stakeholders
(including EPSRC, UKAEA, DTI and OST) and is currently looking
at the developing vision for the UK Fusion programme and the funding
arrangements required to achieve this vision.
6. It is pleasing to see that the Research Councils
are beginning to improve the way they are working together and
in particular that they put in a successful joint bid to the Spending
Review on sustainable energy (paragraph 29).
The new £28 million cross-Council 'Towards a
Sustainable Energy Economy' (TSEC) programme should more than
double Research Council investment in sustainable energy research
by 2005-06. In their SR2002 bid, the Research Councils recognized
the importance of adopting a cross-Council, multidisciplinary
approach to tackling the research issues of sustainable energy.
The TSEC programme will build on new programmes such as SUPERGEN
and the Carbon Vision Programme, both of which involve EPSRC,
ESRC and NERC.
7. We urge the Research Councils to make an early
decision on the continuation of funding of the Tyndall Centre
to avoid any interruptions in the Centre's research programme,
and to increase its resources (paragraph 32).
The Tyndall Centre's continuation will be subject
to the outcomes of a review of its achievements during the first
funding phase (2000-2006). On behalf of the Research Councils
funding Tyndall, NERC will lead that review, which will take place
in spring 2004. The emphasis and scope of the review were considered
at the Tyndall Centre Supervisory Board meeting on 8 May 2003.
8. We welcome the cross-Council programme on sustainable
energy. The Research Councils' expenditure on energy research
has been pitiful and this investment is a step in the right direction.
But it only remains a step, which we hope will be followed up
vigorously in the future. If UK technologies are to succeed the
scale of investment must increase rapidly (paragraph 34).
Whilst the Research Councils spent an estimated £11
million in 2002-03 on low and non-carbon energy technology, they
also support blue skies research which could have possible energy
applications. For instance, EPSRC estimate they would support
£68 million in 2002-03 in blue skies research with potential
relevance to low or zero-carbon energy technology. However, as
the Committee acknowledges (Recommendation 72), investments in
RD&D must be complemented by policies to stimulate the market.
9. We will await the development of a UK Energy
Research Centre and a National Energy Research Network with great
interest but we are concerned that its remit is too narrow and
aims to modest to turn energy RD&D into deployed technologies
(paragraph 35).
The Research Councils are the funding facilitators
for the UK Energy Research Centre (UKERC). Within the context
of the 'Towards a Sustainable Energy Economy' programme the remit
and aims of the Centre will be decided by the academic and user
communities, and will reflect the broad expertise and opportunities
this Centre will need to address. Furthermore, the synergy of
such partnerships should result in outputs that are greater than
the sum of the individuals.
10. We understand that UKERC will provide "a
focal point for data and information on UK energy research funding".
If this means that the Centre will provide a one-stop shop for
those seeking energy-related RD&D funding then it is a proposal
that we warmly welcome (paragraph 36).
One of the key objectives of UKERC will be to provide
a 'one-stop shop' for a number of important functions, including
acting as a focal point for data and information on UK energy
research funding.
11. We have no doubt that the Research Councils
are funding world-class research into low carbon energy, but is
our impression that instead of driving these exciting new technologies
forward they have a passive, unadventurous approach. There will
be few sleepless nights in our competitor countries (paragraph
37).
Exciting new initiatives such as SUPERGEN (Sustainable
Power Generation and Supply) have been designed and realised by
EPSRC working with ESRC, NERC and BBSRC. These multi-million pound
programmes are building new partnerships between the research
communities and stakeholders to explore groundbreaking low carbon
technologies. Building research consortia which bring together
leading university research groups and industry with the aim of
creating national networks of excellence to address research challenges
in sustainable power generation.
12. We do not understand why the functions of
the Carbon Trust could not have been taken on by existing Government
bodies. We suspect that its formation was primarily a political
gesture to bolster the Government's green credentials (paragraph
41).
As the White Paper makes clear the Government cannot
deliver a low carbon economy on its own. One of the key pre-requisites
of a move to a low carbon economy is the need to leverage massive
private investment away from conventional technologies and into
low carbon technologies.
The Government, in consultation with business and
other stakeholders as part of the Climate Change Levy discussions,
decided that a new delivery vehicle, specifically designed to
work with business and the investment communities, would be the
best way to put UK business and the public sector on the path
to a low carbon economy. The Carbon Trust was therefore set up
as an independent company, business-led and Government backed
with funds from the Climate Change Levy, Defra and the Devolved
Administrations. Its business plan is agreed annually with its
funding providers but within this broad framework, its independence
gives it the freedom to deploy public funds according to the needs
of non-domestic energy users and investors in order to deliver
the public policy aim of reducing carbon emissions. Importantly,
its position as a private, business-led, not for profit company
has enabled the Carbon Trust to acquire and develop the skills
necessary to work effectively both with Government and the business/investor
communities.
The Carbon Trust has already shown the value of this
approach by making a number of investments in projects that would
have proved difficult for Government alone to deliver, such as
equity investments. As announced in February its projects to date
will total some £70M of public/private investments in a range
of low carbon technologies.
13. It is too soon to judge the effectiveness
of the Carbon Trust but we detect a lack of urgency. It must be
an active partner of the UK Energy Research Centre in its provision
of advice and information on funding (paragraph 42).
We would agree that it is too soon to judge the effectiveness
of the Carbon Trust. However, we reject the view that there is
a lack of urgency—either in Government or the Carbon Trust.
In a relatively short period, the Carbon Trust has established
itself as a key player in the development of long term policies
and programmes to help meet the Energy White Paper targets and
commitment to create a UK low carbon economy.
The Carbon Trust is a member of the Chief Scientific
Adviser's High Level Group on energy RD&D—and its predecessor,
the Energy Research Review Group at which the concept of a UK
energy research centre was first considered. Its RD&D activities
will be complementary to the Energy Research Centre and it will
share information on its RD&D funding and the specific technologies
supported under the Carbon Trust's programmes. The Carbon Trust's
investment programme is much broader in scope than just RD&D
and the Carbon Trust is also working closely with and is intended
to be complementary to other sources of public (and private) funding.
The Carbon Trust is also a member of the new Sustainable Energy
Policy Network.
Energy RD&D
14. The DTI seems to be looking for reasons not
to invest in RD&D. The Government must be doing more than
filling in the gaps left by the private sector and drive forward
important technologies (paragraph 47).
15. The Government has expressed its concern that
the UK does not derive sufficient commercial benefit from the
excellence of its science base. The DTI's inability to fund properly
energy RD&D projects is a clear case of its policies betraying
the fine words of its Ministers (paragraph 48).
16. The UK is spending much less than its competitors
on energy RD&D. The PIU money and the Research Councils' new
Sustainable Energy Programme provide a welcome and long-overdue
boost to energy RD&D in the UK. We are pleased to see the
Chief Scientific Adviser recommending further increases in the
future and strongly urge the Government to make a commitment to
this end over a defined period (paragraph 57).
The Government accepts that the absolute level of
UK Government expenditure on energy RD&D is currently lower
than its competitors. After a long period however, during which
expenditure was substantially reduced, the trend has begun to
be reversed in recent years.
DTI investment in new and renewable RD&D has
gone up very significantly over the last year. It is now investing
£19m per annum in industrially led RD&D and has launched
4 capital grants schemes worth £170m in total. The Research
Councils are also investing in university-led research through
the SUPERGEN programme, worth £25m.
DTI is carrying out a Review of Renewables Innovation
Spending in order to allocate the new budgets arising from SR2002
and the Energy White Paper and to consider the case for longer
term funding in preparation for SR2004. The Research Councils
are extending the SUPERGEN programme, working with the Carbon
Trust on a £14m Carbon Vision programme and taking forward
the new £28m "Towards a Sustainable Energy Economy"
programme. The latter exercise includes work on the new UK Energy
Research Centre.
The Renewables Advisory Board was established to
work with industry on driving forward the deployment of renewable
technologies. One of its working groups is carrying out a Review
of Renewables Innovation Spending as set out in the Energy White
Paper, paragraph 4.14,
'As well as making progress towards our 2010 target,
and paving the way for our 2020 strategy, we need to make sure
that we are planning for the longer term up to 2050. We are already
reviewing innovation spending, including that for renewable energy,
across government. With respect to renewable energy, we will review
the barriers to successful innovation across the range of renewable
technologies and will set out a programme for developing, with
industry, strategies for the successful application of those technologies
in their liberalised energy markets.'
The Renewables Advisory Board also has working groups
addressing the barriers of finance, planning, public perception
and the grid.
17. We support the idea of a single entry portal
for those seeking support for RD&D in fuel cells but believe
there is merit in extending the concept to embrace all new energy
technologies (paragraph 60).
The funding landscape for new energy technologies
is undoubtedly more complex now than it was even two years ago.
The Review of Renewables Innovation Spending is mapping that landscape
and expects to make recommendations about the co-ordination of
separate funds in order to make the funding as transparent and
accessible to industry as possible.
18. The coordination of public funding bodies
and research policy in the field of energy RD&D has been poor.
We shall be monitoring the progress of Government and the Research
Councils in improving coordination with great interest. The establishment
of a UK Energy Research Centre is a step forward but we have little
confidence that it has the remit to solve the problem (paragraph
61).
The UK Energy Research Centre (UKERC) is being set
up to improve the coherence of energy RD&D by enhancing co-ordination
of the UK energy research agenda. It will be an independent centre
within the framework of the Research Councils. It will not be
responsible for coordinating energy RD&D policy beyond that
funded by the Research Councils. That wider coordination is the
remit of the Chief Scientific Advisor's High Level Group on Energy
RD&D, which brings together the key public funders including
the Research Councils, as well as the DTI's energy group. (See
also the response to Recommendation 22 below).
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