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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 876-vi House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE WELSH AFFAIRS COMMITTEE
ENERGY IN WALES
TUESday 28 MARCH 2006 DR IAN MASTERS, MR JAMES ORME, MR PETER ULLMAN and MR JOE VERDI Evidence heard in Public Questions 572 - 661
USE OF THE TRANSCRIPT
Oral Evidence Taken before the Welsh Affairs Committee on Tuesday 28 March 2006 Members present Dr Hywel Francis, in the Chair Nia Griffith Mrs Siān C. James Mr David Jones Mark Williams ________________ Memoranda submitted by University of Wales, Swansea, Swanturbines Ltd., Tidal Electric, Marine Current Turbines Limited
Examination of Witnesses
Witnesses: Dr Ian Masters, Welsh Energy Research Centre, University of Wales, Swansea, Mr James Orme, Director, Swanturbines Ltd., Mr Peter Ullman, Chairman, Tidal Electric, and Mr Joe Verdi, Commercial Director, Marine Current Turbines Ltd., gave evidence. Q572 Chairman: Good morning. Can I begin by asking you to introduce yourselves and to explain something about your organisations or your institutions. Mr Verdi: Good morning. I am Joe Verdi, the Commercial Director from Marine Current Turbines. We are based in Bristol. We have about 15 employees. Marine Current Turbines was formed in 2000. We have a 300 kilowatt prototype machine that has been installed in the Bristol Channel since May 2003. We will be installing our commercial demonstrator, which is a 1.2 megawatt tidal current turbine, in Strangford Narrows in Northern Ireland in September this year. Mr Ullman: I am Peter Ullman. I am with Tidal Electric and we are the company that is keen to install a tidal lagoon in Swansea Bay. The reason that we are interested in Swansea and in Wales in general is that Wales has the second largest tidal range in the world and it has admirable geo-technical aspects to it that make it an ideal site for this technology. Dr Masters: Dr Ian Masters from the School of Engineering at the University of Wales in Swansea. I am also a member of the Welsh Energy Research Centre responsible for marine renewable energy and co-ordinating research in and around marine areas for Wales. Mr Orme: My name is James Orme. I am a director of Swanturbines Ltd., which is a device developer. I have six years' experience in the industry. We are based in Swansea, leading a consortium of nine industrial partners. We are developing a Welsh tidal stream turbine system to reduce the cost of tidal energy and we have done testing on the River Towy, and we intend to install a demonstration device next year. Q573 Mrs James: This question is to Dr Ian Masters in the first instance. You open your written evidence by stating: "The UK Government should invest the value of one fossil fuel power station (£500m) over the next five years to build a marine energy industry in the UK." Apart from the financial support, what could be done by Governments both in Wales and the UK to further promote this technology? Dr Masters: There are a number of things which could be done, and I am sure everybody else at the table would agree with me that the main issue is the development of sites offshore where these devices can be put in the water, both at test stage and pre-commercial stage, to prove the technology. The technology exists. We just need to show that it can and will work. Something the universities can help with is looking at the environmental impact studies because there is very little time in the water and very little evidence about environmental impact - but that is expensive to gather and takes time and resources; and to put the onus on gathering that data on developers is a high overhead at this early stage in the industry. They are therefore looking at environmental issues. Also, it needs clear planning, clear management of the sea environment and the spaces, and the conflict with other users, and having some very clear lead from government about those things. There are financial incentives of ROCs, and perhaps the premium above ROCs as well, that should come from government. Remember that we are talking about power plants and we are talking about investment in power systems with a 20-year life cycle, so any policy with less than a 20-year timespan to it is a question to investors. Q574 Mrs James: Would you say there is a level playing field in terms of government funding for marine and other renewable technologies? Dr Masters: Between marine energy and other technologies there is a level playing field because they all attract the same subsidy, so buying tidal plant attracts the same level of renewable obligation and there is an exactly level playing field. Where it is not level is in the area of things like planning. Onshore planning is very well advanced and organised; offshore, there is a lot more ambiguity about the way planning is done. Q575 Nia Griffith: Can I welcome the fact that we have so many different groups represented here today. What we really want to explore is the opportunities for all types of devices to be developed. I am sure there is room for more than one player. The sea is obviously an immense, huge resource for us. Can you give us an overview in terms of the contribution marine technologies could make to the energy needs of Wales? Dr Masters: The Welsh Assembly's target for 2020 is 7 tera-watt hours of renewable energy. You can probably achieve three of those seven tera-watts from wind onshore; there is just under 1.5 tera-watt hours per annum from tidal if fully employed, and of the same order of magnitude for wave. There is more uncertainty about wave resources. That leaves a gap of about 1.5 tera-watt hours from other sources like offshore wind, biomass and energy from waste; so it can make a significant contribution. Q576 Nia Griffith: It does not sound that much compared, say, with wind. Could it be increased? Presumably, once the technology is known there must be huge numbers of sites that could be used. It seems to be quite a conservative estimate. Dr Masters: It is realistic. The evidence from the Carbon Trust and Black & Veitch their consultants, is that they looked at some resourcing and tried to look at sites that are both technically feasible now and economically viable in the short to medium term, that is development which is economically and technically feasible now. In ten or fifteen years' time we could revise those estimates up, but tidal could deliver significantly and wave could deliver significantly - but that order of magnitude with the technology we have today. Q577 Mrs James: Obviously there is a range of different technologies now being developed. Can you give us a brief overview of what these different technologies encompass? Dr Masters: There are a lot of different technologies. There are the tidal stream technologies from Marine Current Turbines. There are different wave devices, which either float on the surface or are anchored to the bottom: the Pelamis device from Scotland, the power buoy being tested in Hawaii, and WaveDragon to be deployed in Pembrokeshire. There is the lagoon project as well. There are lots of different devices. What is common between them is that the only thing that is meaningful to measure is the energy output, the kilowatt hours per annum. Peak figures are very difficult to compare between technologies so it is the annual total output that is the measure. We are working offshore, so the significant cost is the maintenance cost. The technology must be reliable and have good-quality engineering, and those are the common factors between them. The other issue for devices that are on the surface and the wave devices is storm damage and the ability to weather extreme conditions. There are a number of devices that I have just mentioned that fit into those criteria: good engineering, reliable and reasonable costs. Q578 Nia Griffith: How far offshore do you have to go? Can we not use estuaries? Where you have the rivers and the technologies, can we not bring some of these technologies quite close in? Dr Masters: The wave regime is better if you go slightly further offshore, so one or two miles - although the WaveDragon device is quite close to the shore at Dale in Pembrokeshire. The tidal stream device is economically - the more water depth you use, the larger the device, so a depth of 20 metres is the minimum economically viable depth. You have to go a reasonable distance, not too far offshore, to get to 20 metres. Q579 Mark Williams: You mentioned some of the different technologies that are now available. I suspect we are talking to the converted in terms of the generality of these forms of energy, but can you outline some of the advantages and disadvantages between some of the different things you have mentioned? Dr Masters: It is a difficult question. The one metric is: how much energy does it produce in a year and what is the capital cost you need to achieve that energy? To say that one device is better at surviving a storm condition and another device gives a smooth power - it is the technicalities of the engineering. We have to have a very careful look at devices to see those differences. The other important factor is that different sites, particularly with tidal stream, may lend themselves to different solutions and different devices; and different wave climates may lend themselves to different wave devices. When somebody is putting a project together, when they want to deploy twenty devices, they will look at their particular sites and the site characteristics and find a device that works for those characteristics at the right price. It is an almost impossible question to answer unless you are talking about a specific site. Q580 Mark Williams: Which varies because - one has a vision of plonking down a wind farm on the uplands of Wales whereas you are looking at the uniqueness of a particular scheme and how it affects the locality issues and generation capacity. Dr Masters: Yes. The wind regime is pretty much the same wherever. The way that the wind blows is the same almost everywhere. If you go into deep water the wave regime is different, and around the coastlines you have lots of variations. Q581 Mark Williams: Which of the technologies you have outlined to my colleagues' questions is the most developed? Dr Masters: The devices that have had the most time in the water, so MCT's device on the tidal, Pelamis and the Ocean Power Technologies' device. WaveDragon has been in the water for two years as well, so all of those add time in the water and development. There are 50 device developers in existence, but about half a dozen have had time in the water. Q582 Mark Williams: What sort of timescale are we talking about, Mr Verdi? What is the timescale if you are working on research? When were these projects initiated? Mr Verdi: The concept was about ten years ago but it has taken three years to get to our 300 kilowatt prototype that has been installed in the Bristol Channel. It took about five years to take us to SeaGen, which is our commercial demonstrator machine that we will be installing in September this year. Mark Williams: I was going to ask you about the suitability of different schemes in parts of Wales but we have covered that. Q583 Chairman: Can I ask Dr Masters about the importance of the Welsh Energy Research Centre in your own research and in the interface between universities and the private sector: does it play that kind of role in bringing different partners together? Dr Masters: Since the Welsh Energy Research Centre has been formed I have put together a team of six different research groups around Wales that have a broad interest both in engineering and in the environmental aspects - oceanography at Cardiff and Swansea and engineering in Swansea and Cardiff, and also a group at Bangor - to look at bringing together a team to look at some of these wider environmental effects on a particular site. We have started the discussion since the formation of the Research Centre with that group, and we will be putting together a project. Q584 Chairman: It has made quite a significant change in the way you are developing your research. Dr Masters: Yes. Q585 Chairman: Then the interface with the private sector - does it play a facilitating role in that way? Dr Masters: We had a meeting of the marine sector in Wales at Pembroke Dock, which was quite successful in bringing people together and starting that engagement with the private sector. I am also working on a European project with Wylfa, so the links are there. Q586 Mark Williams: Turning to the practicalities of the schemes, how are the marine technologies you have mentioned connected to the National Grid? What problems do you envisage have to be overcome in that area? Dr Masters: Grid connection is a fairly straightforward and known technology, and these devices will connect in the same way as any other reasonably sized renewable technology. It is known technology. Q587 Mark Williams: Can you elaborate to the uninitiated like myself as to what that involves? Dr Masters: You would have farmer devices connected together to a local sub-station. You would perhaps transmit at a particular high voltage DC, depending how far offshore. You connect to a local sub-station and make sure your output was at grid quality and then connect into the grid at that point. Wales has a reasonably good grid close to the shore, because there are lots of population centres close to the shore and there are places you could tie into on the coast. It is a lot better, say, than the north of Scotland. There are a lot of resources in the north of Scotland but there is nobody there so there is no grid there. There is the possibility of connecting into good grids in Pembrokeshire, North Wales and South Wales where there are population centres. It is more straightforward than in other parts of the UK. Q588 Nia Griffith: Have you looked at any micro generation projects, for example the Land Registry having turbines tied to the road and rail bridges and linking that into a local factory, something on a much smaller scale? Dr Masters: It is technically possible but probably not economical. Q589 Mr Jones: Mr Verdi, can you briefly explain to the Committee how Marine Current Turbine's product works, and can you comment on the advantages and disadvantages of the technology? Mr Verdi: Marine Current Turbine works in a very similar fashion to a wind turbine. The only difference is that it is underwater. It harnesses this tremendous flow of water that goes through headlands and channels. In terms of energy capture, it is a lot more efficient than wind turbine because water is nearly 800 times denser than air. It also works on the very basic principle that it is an axiom flow machine and a horizontal axis at that, so very similar to a wind turbine. The difference where it comes between wind turbines and our technology is the tides are very, very predictable and actually produce energy to a programme. It does not produce it 24 hours a day because the tide changes every six and a quarter hours, but you know exactly what it is going to produce, and that has a tremendous value in the energy that we produce. Q590 Nia Griffith: Presumably you have a reverse device on it, and it works both ways? Mr Verdi: Yes. Our rotors are fully pitched so when the current changes direction they will turn 180 degrees. Q591 Nia Griffith: So you do get the in-tide and the out-tide. Mr Verdi: Yes. Q592 Mr Jones: What do you say are the disadvantages and advantages of this technology? Mr Verdi: The advantages are that we have a patented system on that where we raise the whole drive train up above water level, so there is no underwater intervention. It is easy to maintain. It is in essence a mono-pile installation so the footprint that it leaves is basically the size of the pile. It penetrates the waterline by seven or eight metres, which is about the same height as a channel marker. It has very little visual impact. There are concerns in terms of marine life, but, again, with our experiences at Lynmouth - and we are still doing a lot of studies - the rotors only turn at about ten revolutions a minute, which is actually very slow. In high tide places the marine life that lives there is used to living in very high tide streams and they are used to feeding themselves and are very agile. We do not believe there is a tremendous impact. The only disadvantage is that we do not run 24/7 because the tide changes, on the shoulders ----- Q593 Mr Jones: There is a hiatus when the tide changes. How long is that period for? Mr Verdi: It varies. It could be anything from twenty minutes to an hour. Q594 Mr Jones: That, presumably, is highly predictable. Mr Verdi: Yes. Q595 Mr Jones: Mr Orme, how does the technology we have just heard about compare with what you are developing in your company? Mr Orme: The Swanturbine device is similar in that it is like an underwater windmill. It is an active flow turbine. The main difference is the method we use to support the turbine underwater. We found that with the benefit of hindsight in looking at some of the instances that have been suggested as devices for tidal flow generation - we have worked out that this support structure that we have chosen to use is the most efficient method for getting it in and out. Studies undertaken by our industrial partner CB&I John Brown have indicated that the installation and maintenance costs are the primary drivers in the viability of the system over the lifetime. This cost is therefore reduced by a clever method of installation. Unfortunately I am not able to tell you the exact method that we are using because it is currently under patent - I am sorry about that. The other thing which is different about our device is that it does not use a gear box, so we have increased efficiency in the drive train. It means that we use a clever generator, which runs at low speed rather than the high-speed type which you might find elsewhere. It is similar in a sense to the Enercon wind turbines, which have the largest market share in Germany. We believe that has a number of advantages: reduced maintenance requirements and more reliability if you get rid of the gear box; and there is less noise underwater, which should prove less intrusive to marine life. Q596 Nia Griffith: Where on the River Towy is your experiment based? Mr Orme: We towed it from the university research vessel so it is not there any more. We tested it in front of the Technium, which is opposite the marina. Q597 Mark Williams: In relation to your prototype you mentioned the concerns. What was the public perception locally? Mr Verdi: At Lynmouth we have had tremendous support. They want to know when we are going back there to actually build an array. In fairness, and being cynical, it is better than onshore wind, I suppose! Q598 Nia Griffith: Can you tell us what the potential generation capacity of tidal stream generation is in Wales from Marine Current Turbines, and within what timescale this could be operational? Linked to that, can you identify any sites around Wales and what sort of feasibility studies have you done on the sites? Mr Verdi: We have got a grant from Wyfal and have conducted our study in terms of assessing the resources around the Welsh coast. We have completed that and part of the study is to take one of those sites to consent. In roll-out we see an array, subject to consents being given, in about 2008. We intend to have something like a 10 or 13 megawatt site, presumably off Anglesey. The resource around north Anglesey - again it is potential resource, subject to planning - is of the order of around 180 megawatt, so we see that rolling out starting off with 30 and then 50 and then going to 100 megawatt within five to eight years. Q599 Nia Griffith: So you could see yourselves supplying Anglesey Island with electricity. Mr Verdi: Well, 200 megawatts -I believe Wylfa is about 950, so we have got some way to go. But there is plenty of resource around. Wales is blessed with marine current and potentially we would feel there is about 8%; in fact there is 1 gigawatt potentially available. Mr Orme: I would agree that 8% is the figure with those areas in mind. There are some off Pembrokeshire, and off the south Barry coastline. At present we are looking for somewhere to put a demonstration device, so one single one, but we intend to be able to supply a range of devices in 2010 or 2011, at which time we intend to be supplying 30 to 50 devices in one of those regions. Q600 Mrs James: You sense no reluctance - no local reluctance - protest about sites or anything? Mr Orme: People are very keen and supportive. They say it is very interesting. The thing that occurs to me is that people think it makes sense - and it is out of the way, so they like the idea. Q601 Mrs James: I am particularly interested in commercial viability and the costs. The technology is hugely interesting. In the first instance, my question is to Marine Turbines. You do not have a commercially available product at present, I understand from your report, but you aim to achieve this by 2007 or 2008. Have you any strategies in place to achieve this, and are you on target to achieve that in 2007 or 2008? Mr Verdi: Our commercial demonstrator that we will be installing in September this year is to prove its commercial credentials. We believe firmly that we have got to be competitive to fossil-fuel generation. At the moment the machine that is going to Strangford is slightly more expensive than an offshore wind turbine. What has taken twenty years for the wind industry to get there, we have got there now, and with purchasing power and economies of scale; so the roll-up into arrays we see coming down quite steeply. We intend with the first array to be competitive with onshore wind, and with fuel prices going up we see that cost recovery coming quite quickly. As a guess, in 2010 we would be very competitive with fossil fuels. Q602 Mrs James: Are you finding it difficult to get these concepts over to government agencies that it is a very shifting market; that we do not know where we are going to be in five years' time with fuel generation et cetera? We are talking all the time about costs today and competitive costs with nuclear today, that it is making sense that the fuel crisis or whatever would affect us greatly in the future. Mr Verdi: It is. Ian mentioned it. In terms of commitment from Government, it is support and actual commitment. The Renewal Obligation Certificate goes out now to 2027, so you have only about 20 years left. If you start an array now, you will not build it, say, for two years; and you are reducing in terms of that support that the Government has committed to. So if you think of an array that starts in five or eight years' time, you reduce the support that you get from the Renewable Obligation Certificate. Government can help by extending that and giving more commitment. It gives a good signal to investors and also to the City because at the moment, in terms of project finance, all we can do is take it up to 2027. That is one of the reasons why it slows down development in terms of getting finance. I should think the majority would go up to 2027 and then just drop .... Q603 Mrs James: What positive practical steps do you think the industry needs to take and government needs to take to ensure that we will be able to operate commercially in Welsh waters? There is a lot of theory but how do we get these things off the ground in order to generate electricity? Mr Orme: We have found it is about investor confidence at the moment. I totally agree with what Joe has said about extending the ROCs further to give them the idea that the Government is supportive of this, 100% in support. Also, planning is a big issue. These areas are areas of outstanding natural beauty and other special areas. With this technology, tidal stream, it is most important that we are able to plan to use areas or near these areas for the good of the environment in general. The planning system must be streamlined to enable these developments to take place in the short to near term, or medium term. For us at the moment, which is an early stage of device development, we need permission to put in a trial device, which is a two-year thing. It is a temporary installation, but the rigmarole we have to go through to get that into the water is phenomenal, and to streamline that would be of great help to us. Q604 Mr Jones: Mr Verdi, you mentioned the difficulties with ROCs. Can you expand on that? What other obstacles do you see to the development of this technology on a commercial basis? Mr Verdi: It is investment. We have to be able to demonstrate to any investor that there is a firm revenue stream. It is very much a catch-22 situation: while our prototype or our first commercial demonstrator costs money, a lot of it is getting their confidence to say they will order. The bills, shall we say, for 20 machines - your purchasing power increases tremendously. You get economies of scale in installation as well. Your grid connection costs, whether you put one machine in or whether you put 20 machines in, is about the same. That supports the project finance. As James has said, and as we mentioned, if the Government could underpin - whether it is an in-feed or tap or even keep the ROC fixed for a longer period, that would give tremendous confidence to the investors, and that will kick-start it. Once you get the first array in, in terms of megawatts I firmly believe the utilities will then sit up and see that it is a viable technology and they will then be prepared to take more of a risk than they are taking now. Q605 Mr Jones: Is there any reason why this technology is so far behind wind technology both in terms of development and in terms of investment? Mr Verdi: In terms of development, no. We started in the early 80s, but that was when fossil fuel was very cheap, so it was shelved. Why people are taking an interest now is that it is inevitable - the decline in fossil fuel and the rising costs of fossil fuels. We have to look at alternate forms of energy, and generally the public are aware of that now. Q606 Mr Jones: Is there any reason why development and investment is so far behind wind, for example, because there seems to be a high concentration on wind as a renewable energy source in this country? Dr Masters: I started my evidence saying that we should invest 500 million in this technology. If we went back thirty years to 1976 rather than 2006, and if we had the foresight to invest in the UK wind industry then, we would now have a viable wind industry. We currently import all our turbines from Denmark, Germany and Spain. To say that 500 million is not very much when you consider that 3.2 billion people live within 100 kilometres of the sea, all those people need energy, and a lot of those people do not have energy at the moment. They are moving to industrialisation. There is a huge world demand for energy and for devices to generate energy, and if half the world populations live on the coast, then 500 million to develop an industry to export to that industry is peanuts. But that is a serious amount of money to get the technology to where wind is now. Q607 Mr Jones: How receptive do you find the Government to your representations? Dr Masters: The DTI has made a start; there is the 50 million wave tidal demonstration scheme, and support through the technology programme, but it is not of that order of magnitude. Q608 Nia Griffith: You are saying the wind technology has come about because other countries have taken the lead. Dr Masters: Yes. Nia Griffith: Perhaps because we have the best tidal resources we should be taking the lead and getting in the market while the market is good. Q609 Mrs James: Basically, we could be in danger of missing the boat again if we do not invest in these technologies now. Dr Masters: Yes. Q610 Mrs James: And in twenty years' time we will be getting this technology from other countries ... Dr Masters: Yes. Q611 Mr Jones: Reverting again to the obstacles you touched on in your submission on onerous planning consents and other procedures, can you expand on that and give some examples of the concerns you have raised? Mr Verdi: One of the main concerns we have had to go through is the precautionary principle; this thing that "it has never been done here yet, so do not even try". We had tremendous problems getting consent for our machine that is going at Strangford Loch. There are lots of people that just say, "you do not know what it is going to do to the environment, so don't install it." The reality is that you have to install it somewhere and accept that it may or may not have an effect, but the only way you are going to find out is to get it into the water. That took a lot of convincing, and technology developers like us do not have the time or the balance sheet to sit down for years and conduct these debates and surveys. We have done a lot of best studies and proved it in terms of the speed, the density of water, the number of strikes one would expect. We are getting there, but it is very much the precautionary principle. The other one is what happens if a species gets displaced. It could get displaced because of global warming, or because the food cycle moves somewhere else. All those things we do not really know until we get there. The other parts that we find very difficult is a lot to do, again, with whether it is grid connection or - it is very romantic to have these generators, but when you start talking about commercial farms, you will always cause some disruption, and while the public say, "it is nice to be green", the moment you say - renewable energy is very localised. Unlike fossil fuels, it is not usually transportable, so you have to export that energy, which means either an overhead line or you put a cable in the ground. When you come to do that you find that the public get quite objectionable about it, and that is what we are finding now. Those are the objections we are seeing. Q612 Mr Jones: This is in the context of the planning procedure. Mr Verdi: Yes. Q613 Mr Jones: You have experience of such objections? Mr Verdi: Yes. Q614 Mr Jones: Presumably, you have to make application for Town & Country Planning permission. Mr Verdi: Yes. Q615 Mr Jones: Do you also have to make an application to the DTI for consent under the Electricity Act? Mr Verdi: If it is over 50 megawatt, we have to go for section 36. Q616 Mr Jones: So both of those procedures would apply to your industry just as they do to offshore wind for example? Mr Verdi: Yes. Q617 Mrs James: A little earlier, Mr Verdi, you talked about the WEFO funding and various funding streams. Can you tell us how much you have received from various environmental agencies so far, like the Assembly, the European Commission and the DTI? How have you spent this money? Mr Verdi: For SeaFlow, our prototype, we got a very small sum of money from the European Commission. The rest of it we got from the DTI, and that grant was in total about 2.1 million. Marine Current Turbines and its shareholders funded the rest, which was something like 1.4 million. SeaFlow cost us 3.5 million. SeaGen, which we are building at the moment, is 50% funded by the DTI; the other 50% is match-funded by ourselves, so that is 4.8 million each. The WEFO grant we have to do the assessment of the resources around the Welsh coast is £704,000, and that is about 38% of the actual budget cost. We have funded the rest ourselves. Q618 Mrs James: They are quite significant sums from WEFO. Mr Verdi: Yes. Mr Orme: To date we have been granted from the Knowledge Expectation Fund about £400,000, which has been the development and testing of a 1 metre diameter prototype as was tested in the River Towy. Also, then there has been a desk exercise in which - it is a collaborative industrial research project with eight partners who have come together to design the 350 kilowatt demonstration device, which we are planning to install shortly. That has been over a period of about four years. It is about half a million in total. Q619 Mrs James: Never enough, I should imagine! Mr Orme: No. Q620 Mark Williams: Mr Verdi, in your submission you have expressed confidence that this technology would be competitive with other forms of fossil fuel generation. Have you any financial back-up to that statement? How long do you think it will take for the technology to be competitive in that way? Mr Verdi: We have got back-up in the sense that we have just under three years' experience of SeaFlow. We know how much it costs to generate electricity and the operation and maintenance costs. Our SeaGen installation in Strangford Loch will be our commercial demonstrator, so that will say what it says on the label - the costs to generate. With the economies of scale and building up the array, I would have thought that by 2010 we would be very comparable to fossil fuels. It is very difficult to say because fuel costs are rising and that cross-over may come sooner. Q621 Chairman: Can we now turn to Mr Peter Ullman and begin to talk about Tidal Electric and tidal lagoons. Can you explain briefly how tidal lagoons work? Mr Ullman: Tidal lagoons are a form of low-head hydro-electricity, which has been around for about 130 years. It uses equipment that is conventional; and it is manufactured by large companies like General Electric, Siemens, Kvaerner, Voith and so on, and comes performance-guaranteed - that is the technology risk is taken up by insurance. The way it functions is that the low-head hydro-electric turbine is installed in an impoundment structure. It has come to be called a lagoon because it is a much more descriptive term, but it is a structure built out of rock, sand, gravel, in a conventional marine construction fashion. It sits a mile or so offshore, and is self-contained. It is sometimes called ring-dyking but it will not be round. The water at high tide, when the impoundment is empty - there is a difference in water level. So the power source is the difference in water level as in a conventional dam. This is different than a tidal stream in which the power source is essentially the horizontal movement of the water. The horizontal movement of the water is irrelevant to this particular technology. What you create with the impoundment structure is a difference in water level, and then the difference in water level is harvested - the energy is harvested by allowing the water from the high pool to go into the low one. Then what you have is a full situation where the tide drops away to do the opposite; so it is a two-way generation using conventional low-head hydro-electric. Q622 Chairman: Can you give us some examples in the United Kingdom of tidal lagoons? Mr Ullman: No, there is no tidal lagoon that has been built in the United Kingdom, or anywhere else. Tidal power of this sort is most similar to a barrage style tidal power. Barrages have been around for several thousand years. The largest tidal barrage is in France; it is a 240 megawatt unit that was put in service in 1965. It uses similar turbines to the ones we plan on using. It has functioned since 1965. There have been some difficulties here and there but it has essentially been working for 47 years. There is also another one in Canada, a 16 megawatt unit that was installed in 1982 in order to demonstrate a Swiss turbine. It is a familiar power source, but it has never been done in the offshore manner that we are planning on doing. Q623 Chairman: Can you outline some of the advantages and disadvantages of tidal lagoons? Mr Ullman: One of the advantages is similar to the other forms of tidal power, which is that it produces predictable power. This is key of course because that is the way the grid functions. It functions on a predictable set of contracts, and you have to know what you are going to be able to send when, otherwise you have to be able to back it up. The second is that it uses conventional equipment. I do not need to tell you that these other folks have been working on climbing the technology curve and proving their technology. It is very important: electricity has to be provided in a reliable and consistent manner. Quite a lot of money goes into building a power plant and therefore the risks need to be carefully assessed. This particular technology, with the advantages that - there is no technology risk. I personally have seen a low-head hydro-turbine that has been functioning for 120 years in Sweden. It was built 120 years ago and construction of this equipment has advanced. The equipment is reliable; its output is known and the risks are ones that can be offset. This is important in convincing investors to invest in a project. It uses no fuel. This is, opposed to some of the tidal stream devices, a big part of the estuary. There is no getting around that. In Swansea Bay we are proposing a project that will be 60 megawatts, and it is 5 square kilometres, which is a significant part of the area of the Bay. It is by no means the whole area of the Bay because the Bay itself is many times that, but whenever you do that, you change things. One of the advantages as well as the disadvantages is the size. It is a rock structure; it is natural and will look just like the shoreline. If you have ever been there at the Mumbles you can see it - not very plainly but the rocks form the shoreline, and it will look just like that physically. What happens almost immediately is that small creatures take up the habitat in there; larger creatures come to dine on them and so on. It is a new habitat. It is expected that this will enhance the biodiversity of the area. The inner shore tidal zone and the near-shore tidal zone is famously barren; not that there is nothing that lives there, but there are precious few creatures there that take up habitat there. Because of the size and the natural structure of this, it will create a wildlife habitat. The flip side of that advantage is that because it is big it is going to change things in the Bay in terms of currents, sediment transport, and the general flow of traffic in Swansea Bay. That is why we have Associated British Ports as part of our team, to assess the sediment and transport issues to make sure that we are not causing difficulties; one to put sand where it should not be, or to take sand away from where it should be. It is complex. Sediment transport is an issue in Swansea Bay as it is. ADP for example dredges almost every month, and two months do not go by without them dredging their shipping channel. There are already complexities therefore. As you probably are aware there is an area threatened by coastal erosion, and so this is a very careful issue that one needs to go into in great detail. Another advantage is that in its building we are not doing anything that has not been done before many times. There are secondary applications that have been proposed. People have asked us, "if you put a wind turbine on top of it, could you grow mussels inside of it or lobsters, fish - marina fishing and so on. Even a bicycle path was proposed in a project that we are looking at in North Wales. All of those are things that I feel would enhance the interactivity with the community. However, none of those are our business. We are marine developers; we are not lobster men or any of those things. Nevertheless, there are people who live in those areas that do those things and are interested in the business opportunity of working with us. We are keen to do that and have those discussions frequently. The next advantage is the tourists. Strangely enough, the tidal power plant that I mentioned in France gets 600,000 visitors a year. I do not know what they come to see. I have gone to see it myself, and it is not a terribly exciting trip! Q624 Chairman: Is that at St Malo? Mr Ullman: Yes, St Malo, right. As I see it, there is not a lot of excitement. I was there when the lock was working and you could see a boat go through. Nevertheless, when I was visiting the tidal power plant in Canada there was a group of 20 engineers from China. Some amount of people are going to come to look at this because it is unusual, it is new, it is different. If it goes in first, it will be the first in the world. Some amount of tourism will occur. In terms of disadvantages, it is similar to marine currents, which is that it is not always available. It is predictable but not always available. Q625 Nia Griffith: The size of it is what is putting some people off. Is there any possibility that there could be smaller ones developed? The other issue is where all the material is to come from to build it. Again, people have talked about tonnes and tonnes that are going to be needed. Can you address those issues? Mr Ullman: The size determines the output. Well, there are two factors - the size, that is the area covered, and the tidal range. The output is a function of the square of the tidal range, so the larger the tidal range the larger the output per unit area. That is a given, by the tides. Then the size will determine what the multiplier is. It could be done smaller; however the point of building the first project is not to prove that low-head hydro-electricity works - we are not demonstrating that of course because it has been working for more than a century - but the point of building the first one is to prove the economics of the technology. The economies of scale will work in both directions so the smaller you make it the more expensive the output; and the larger you make it the less expensive the output. In terms of materials, they will be acquired from a variety of sites. It is unlikely they will come from one site. They will all be transported to the site by barge; none of it will be coming by road or by rail. The contractors that we are dealing with own their own quarries. Some are in Norway, some in Spain, and in a variety of locations; but nothing is coming through Swansea Docks or over rail. Even if one were so insensitive as to want to do that, the economics of shipping that amount of material in that fashion are unthinkable and unfavourable. Q626 Mark Williams: Can you give us more detail on the tidal lagoon and its potential as a pump storage facility, and the technology behind that; and then more generally you spoke a great deal about the technology, but the extent to which that is commercially available currently. Mr Ullman: In terms of pump storage, it is an interesting component of the potential revenue stream of this project. The way pump storage works is that you use electricity to pump water up during a time of the day in which electricity is cheap, like in the middle of the night; but then you generate during a time when the revenue from electricity is greater. This is a common practice in North Wales and it is used around the world to deal with a variety of situations. That is the basic economics of it. With a tidal lagoon, as I said earlier, the output is a function of the square of the tidal range. If you had a condition in which you had just finished generating and it is high tide, and you pump water into the lagoon, you raise the level by a certain amount. Let us say, for demonstration purposes, the tidal range is ten and you pump one, and make the tidal range into eleven. Then, when you generate you do not have ten, you have eleven; so you get 121, 11 squared, as opposed to 120. The gain is 21% minus the energy that you use to pump. The energy that you use to pump tends to be somewhere in the 2-3% range. What you wind up with is the ability to use pump storage with an efficiency that is potentially greater than one - there may be some circumstances in which it is not greater than one - so you make a mechanism gain; and then when you dispatch it or send it to the grid you do so at a time in which the revenue is favourable. Therefore, you can then realise the gain of giving the grid power when it wants it during tea-time or peak days, and also sending in more power than you would have available. The second potential for using pump storage in this fashion is that you can take less predictable renewables, like wind or wave, and use that as the source to pump, because you can pump any time. Then, when you dispatch it, because the tides are so predictable, you can take unpredictable power and dispatch it as predictable power. Unpredictable power is considerably less valuable both in terms of revenue and usefulness to the grid than is predictable power; so in a way you are helping the wind and wave folks and the grid by pumping in this fashion. It is commercially available now. We are in the process for applying for consents for a 60 megawatt unit in Swansea Bay. We have consulted with 55 different consultees relating to this, and we are on a pathway to developing this 60 megawatt unit. Q627 Mark Williams: Do you share the frustration that your colleagues expressed about the potential for this? We heard earlier that had the investment been put into wind power thirty years ago we would have been much more advanced along that route; but now we are beginning to turn our sights to schemes you have spoken to us about. Do you share the frustrations that had research investment gone into these schemes earlier on we would be that much more advanced now? Mr Ullman: Let me put my feelings in context. First, I would like to say that the UK has done a tremendous amount to support renewable energy in terms of research and development programmes and so on. I come from a country in which such an effort has not been made by the federal government. I will say that 21 of the states of the United States have copied the UK's renewable obligation, so there is some leadership there. Then there has been a fairly sizeable amount of money that has been distributed to renewable source technologies. Tidal Stream has had £50 million. The offshore wind folks have got £100 million. Money has been given to biomass, poultry litter, a number of studies and so on. I get very expensive brochures in the mail about surveys and so on. A fair amount of money has been put into tackling this problem. I will note that no money has been dedicated to tidal lagoons; they have been supported exclusively privately. Q628 Mark Williams: In that sense you do see yourselves as the junior partners. Mr Ullman: Well, I like the term "partner", but "junior" is definitely - we have had no support from the UK Government in terms of that. In terms of frustration, it just means you are doing things that are new and it has not been easy to work on this project here in the UK in terms of dealing more with DTI than with the rest of government. The local folks have been tremendously supportive and enthusiastic and so on. Most of the political world has been very supportive too. I will say we have had no support from the DTI. Q629 Nia Griffith: Do you see a particular reason why that has been the case? What is the difference between yourself and the others? Is it that it is long-term; is it that it is too big? Is there a reason? Mr Ullman: There may be a reason, but I do not know what it is. At various times we have been told that this is a mature technology that does not need support. At other times we have been told that we have dramatically under-estimated the cost of the installations - which one would think would therefore qualify it for getting support. Neither of those is true. We are doing something that is new. It is difficult to do new things. The first project is projected to cost £79 million. I do not have £79 million to convince various private entities to fund that. We have had success with that, but it is not easy to do things that are new. Q630 Nia Griffith: Do you see it as somewhere where other countries might step in, Spain for example? Mr Ullman: I have been at this a long time, seven years, and after being all over the world, in Panama, India, China, Canada and all over looking at various sites, I decided on the UK about seven years ago. Five years went by and frankly it looked like we were never going to get permission to proceed and I did start looking at other countries. We are now active in China, Canada, Mexico and Panama. That said, if anybody in Wales would like to participate in the manufacturing process, there are a number of parts and elements that need to be made for these projects and there is a significant amount of money involved in these orders, and then we would be glad to work with somebody who wanted to step forward. Q631 Mrs James: You have obviously approached the DTI under section 36 because it is generating over 50 megawatts. You see the key partners you want to be working with on development as the DTI. You have gone or permission to the DTI and you are saying that the log jam seems to be the DTI. Are there any other options that you have - the Assembly, WEFO? Mr Ullman: In terms of consents, do you mean, or in terms of funding? Q632 Mrs James: Funding. Mr Ullman: No, we have given up looking for public funding. It has been discussed a number of times and it just does not appear to be available to us. We have had success in raising the money privately and appear to be on a positive course to handling this on a commercial basis. This is not to say that we would turn it down if it were to come our way, but we do not expect it. Q633 Mrs James: Dr Masters' written submission to the Committee stated that there were three questions that remained unanswered about the technology: the operational life of the turbines in a flow regime with significant suspended solids; the effect of silt build-up within the lagoon; neighbourhood you have touched a little bit on the environmental impact of the scheme. Can you give us more information on the turbines and the flow regime? Mr Ullman: The turbines come performance-guaranteed. There are roughly 450,000 of them in the world today of different sizes and different settings. Suspended solids is a common issue; every river has a certain amount of silt. Some have tremendous amounts of silt, and some have smaller amounts of silt. It is an issue, and one designs the turbine for that. It is an important question and it is a problem if somehow somebody would not think about that; but of course it is a problem that has been resolved many times in materials. For example, in France, where they have the 240 megawatt unit, there are 24 of these turbines that have been functioning for over 40 years in a similar kind of environment. Every environment is different, and the environment changes from day to day, year to year, but in the broad range of this type of installation that is a good example. As I mentioned, in fresh water I personally have seen a unit that has lasted for 120 years. They are pretty durable. They take major maintenance about every 20 years. In regard to silt, as I mentioned, we have hired Associated British Ports to help us to sort that out because this is a key issue. I think Dr Masters was probably referring to the siltation inside the structure. Dr Masters: Yes. Mr Ullman: This is a question I first raised back in the early 1990s at the US School of Geology and Geophysics with Dr Edward Halton, and we talked about this at great length. His off-the-cuff response was that with a six-hour time period in which you are flowing in and then flowing out there is not enough time for a significant amount of silt to drop out and therefore it is likely - not a sure thing - that this will not be an issue. He also advised us on a number of design elements. Siltation occurs in inverse proportions to the depth so if you have a very shallow area you will get more siltation than if you have a deeper area; so we have designed the inside of the structure to be deep, that is a metre or more of depth at all times, which would reduce the siltation. Given that the general calculus is that it is unlikely to be a great amount in either direction, it still leaves you with the possibility that you are wrong, and some unusual event happens and silt does get entrained on the inside. Under those circumstances there are two solutions, if there is a problem. I do not want to get too technical, but when you set up any sort of wall inside of this, what you do is change the flow, and you change the velocity of the flow in and out of the structure. When you increase the velocity in a particular direction you will create scouring; so if you have had too much siltation you aim the velocity at the build-up and you scour it, and then you can rotate this wall such that you self-scour the entire structure. That is the likely solution. In some sort of disaster scenario you can also dredge. The flip side of this, which people tend not to mention, is the opposite: what if you scour out too much and start to undermine the soils, and given that we have thought of that there will be a screen that is put in place so that that will not happen. Q634 Mrs James: You talked about the size being 5 square kilometres. Do you have any major environmental concerns or awareness of any particular problems you can draw to our attention? Mr Ullman: Let me tell you the problems that people question us about. One is what happens to a fish that goes through the turbine. Believe me, fish do not like going through turbines and adult fish are able to sense the pressure wave whenever you start a flow underwater. They simply avoid it if they can. If it happens to be an anatomous fish that has to go from fresh water to salt water, and there is a dam in the way, there is no avoiding it and therefore they go through. Of the fish that go through, they do so unhappily but 94% survive. Because our structure will not be in the way of an anatomous fish that wants to go from fresh water to the ocean or the ocean back to the fresh water to spawn, they will simply circumnavigate it. There is no reason for the sensible fish to go through. Therefore, if there are a thousand fish coming down the river, all thousand of them have to go through that turbine. If there are a thousand fish that encounter our structure, one, two or three might get suddenly pulled into that, and of those very few fish that get entrained, 94% of them will survive. In terms of biodiversity, there is no getting around the fact that this is a big structure and will create a habitat, but in general folks have been pretty upbeat about that - birds, fish; and fishermen and so on should enjoy this either as a restaurant or a recreational facility. Q635 Mrs James: One of the questions I have been asked about locally is angling o the surface, people fishing from boats. People have been very, very concerned about that. Can you set their minds to rest about that? Mr Ullman: There will be a lot more fish for them to catch. What is their concern? Q636 Mrs James: That they will hit it. Mr Ullman: Well, they might, and they will have to watch it for that. I do not know why they would hit it - if they were wanting to go out and stand on it and fish - is that it? Mrs James: No, on a boat. Perhaps you could write to me about that. Q637 Nia Griffith: People in small boats: presumably, this thing will be under the water. Mr Ullman: It will be quite visible. It will never be less than a metre visible and it will have navigational lighting, the same way anything else will have, and various warning systems. Q638 Nia Griffith: You are saying even at high tide it will be visible. Mr Ullman: Yes. Q639 Mrs James: Coming back to costs, how do tidal lagoons compare with other forms of power generation, particularly the cost of nuclear power stations? Mr Ullman: We had a number of studies done on costs. The first study was done in 2002 by ABA Technology and that was a broad-brush concept study. They came out with the cost. In 2004 we had this impressive book created by W.S. Atkins and Associated British Ports. This was a more specific study of a 60 megawatt unit installed in Swansea Bay. Their cost is £79 million for the Swansea Bay project. In terms of comparing it to other technologies, my expertise does not extend very far beyond tidal power. However, our financial advisers, N.M. Rothschild - a bank that I am sure you are familiar with - did a study of a variety of ways of looking at costs of power. I believe that that is in the packet I gave you. This, by the way, was done for the very severe rise in the cost of natural gas. Nuclear power - I am afraid I am not an expert, and when the Government owns plants one tends to not really ask about what the costs are. However, I can say that in the US where the nuclear power plants are not government-owned and they are owned by private entities, between 1950 and 1990, $492 billion was spent on nuclear power, of which $97 billion were subsidies. The cost of power - again in the US where the playing field is tilted in a slightly different direction - from that nuclear was 9 cents per kilowatt hour or about 5.1 pence. The best way to compare this is to compare it with more familiar other forms of power, and that is about three and a half times the cost of coal or natural gas. Q640 Mr Jones: You have identified two locations in Wales as potentially suitable for development of tidal lagoons, Swansea Bay and Rhyl. Can you bring the Committee up to date with the current status of both these projects? Mr Ullman: The Swansea Bay project has been studied by Atkins. We have a good sense of what the costing will be. We have done hydrology studies, which tell us the output. To do that you take British Admiralty data on tides and break it down into six-minute increments and take an equipment package and actually run it on a computer so you get the output. It is important to know what the output is so that you know what the cost per unit is to be able to compare that with the revenue stream that is potentially there. We are comfortable with that. We have at this point an agreement from DTI that we can go ahead and proceed to apply for consents. The consents people, by the way, have been lovely and good to work with and facilitative and so on. We are doing that work. We have talked now to 55 different consultees, everybody from the harbour master in Swansea Bay to RSPB and lots and lots of people. The north-west project is not as far advanced; it is a much larger project. When I went to North Wales a number of times I spoke at a variety of public meetings in a castle up there, and the people told me about their problem of constant erosion. You will probably remember the terrible floods in 1990, which were devastating to the folks in the area. They said: "We need this coastline to be defended against erosion." I took a tour of the coastline and saw the Christmas trees in Prestatyn and all of that business, to try and prevent the erosion. So I designed a structure that would stand in the way of the dominant fetch - that being the wind and the waves that hit the North Wales coastline. It is big because it is designed to defend that coastline. Q641 Mr Jones: What sort of acreage are you talking about? Mr Ullman: It is 23 square miles in area. It is almost nine miles in length, and the output is 432 megawatts. Q642 Mr Jones: A serious power station. Mr Ullman: A serious power station. Wallingfords had done a flood risk assessment completely independent of this and so I went to Wallingfords and asked them if this worked; does it defend the North Wales coastline. They said it does. Therefore, one needs to look at that as a potential asset of installing this - that you get the coastal defence for free. Q643 Mr Jones: Have you any estimate as to the cost of that Rhyl development? Mr Ullman: Yes, the cost estimate - which is not as extensive as this but was done with some rigour - is £375 million. Q644 Mr Jones: Are these schemes single, double or triple pool schemes in Rhyl and Swansea Bay? Mr Ullman: At the moment the design for Swansea Bay is as a single pool. The north-west project would need to be a multiple pool - whether three, four or ten pools remains to be seen for a further design stage. The point of single, double or triple, is that because the tides happen twice a day the optimal times for generating are high tide and low tide, and the transitional periods in between are less optimal. If you have a single pool you can get generate about 48% of the time. By dividing the pool into three you can pulse generation from each of the pools and increase the amount of time during the day. In Swansea Bay, for example, by going from a single pool to a triple pool you increase the time of day from 48% to 81%. This allows you to hit tea-time and times at which the grid is needing power a lot more often than not. Q645 Mr Jones: So a triple or multiple-pool design would have a significant impact in terms of output. Would it also have a significant cost implication? Mr Ullman: The cost would be somewhat higher for the impoundment structure because you have to build these internal walls, but lower for the equipment, because you do not need as much equipment. At the end of the day there is some improvement in the cost of the output, that is the unit cost of power, by going to a multi pool. You would also have the enhanced capacity to use it for pump storage. Q646 Mrs James: What is the unit cost? Mr Ullman: There are many answers to that. Let me tell you where we have been on that. When I first did the numbers the costs came out at about 3.1, 3.2 pence per kilowatt hour. In 2002 we had a study done by ABA Technology - and I am sure you are familiar with them - and their result was that it came out at about 2.5 pence per kilowatt hour. That is more optimistic than ours. In 2004 we did the Atkins study and the cost of power is about 3.3. In addition, OFGEM did a study comparing renewables as part of the submission, which you may have seen, and they put in a number of other contingencies and factors and brought that all up to a different level. OFGEM's result - they studied onshore wind, tidal lagoons, offshore wind and everything else - that is wave and tidal stream. Basically, the results were that onshore wind was the cheapest and tidal lagoon the second cheapest. Q647 Chairman: You talk about coastal defences; do you get public funding from the Environment Agency for that? Mr Ullman: No, we have had no public funding whatsoever. Q648 Nia Griffith: Talking about jobs, you mentioned about making some of the machinery that would be needed. Can you tell us what sort of jobs there might be in the construction phase and what sort of jobs there might be in an enduring industry to look after the lagoon, and in an industry which might export the technology? Mr Ullman: Let me start with things I am more certain about. In terms of operating the actual project there are very few jobs; it will be operated remotely. People will come to visit it frequently but it just does not need any care. In terms of secondary applications, tourism and so on, that is a multiplier that you would be more familiar with than I am. The construction period is roughly two years. Again, I cannot promise too many jobs in the construction because it is clearly a mechanical process. The materials come from some place else and are essentially just dumped on the site, so there is not a whole lot of hand work in there. The jobs created - there would be significant jobs created for those who make the generators and the turbines. At the moment there is nobody in Wales that does that, and if somebody in Wales wanted to do that of course we would be keen to work with them. Exporting jobs: we have hired W.S. Atkins to do our studies. In the process of doing the studies on the Swansea Bay project, they developed an expertise which we have already hired them for in Canada to use, so in that sense there are some jobs that have been exported. Q649 Nia Griffith: You mentioned about the technology lasting 120 years and so forth, and a 20-year maintenance interval. Are there issues of corrosion? What are the main issues you are facing in terms of maintaining the technologies? Mr Ullman: Having a metal object in the ocean of course creates the potential for corrosion, and it is a very important maintenance issue. The solution for metal objects in the ocean is what is called cathotic protection, in which you place a small cathode on the object and you pass an electrical current through it. This is the way oil drilling platforms, ships and other items in the ocean protect themselves from corrosion, and it will be the same solution for our equipment. Q650 Chairman: Would any other witnesses wish to answer that question? Mr Orme: I agree. Q651 Mr Jones: I wanted to ask you earlier, Mr Ullman, about the question of costs. Presumably, in the case of Swansea Bay and the north-west project you would have to negotiate Crown leases. Mr Ullman: Yes. Q652 Mr Jones: Are you in negotiation with the Crown on that, and if so how advanced are the negotiations? Mr Ullman: We have had discussions with the Crown Estate and they have laid out their expectations. They would want a lease and on the other side of the lease they want a responsible counterparty, that is they want a big balance sheet. They also want a reasonable business plan and provision for decommissioning. The key about this decommissioning - they are concerned about what they are terming residual responsibility; that is, Tidal Electric goes bankrupt and for some reason leaves a functioning 16 megawatt power plant and abandons it; nobody else picks it up and they are stuck with it. Q653 Mr Jones: It presumably requires some sort of bond. Mr Ullman: Right. The initial stages would be a bond and then there would be a fund that puts funding for decommissioning in place. Q654 Mr Jones: How far advanced are the negotiations for that? Do you have a lot further to go? Mr Ullman: We do not have a lease agreement even on the table, so that is about where we are, which is that they have laid out their requirements and we feel completely in synch with those requirements and feel they are reasonable and intend to meet them. Q655 Mr Jones: There is nothing too intimidating about them. Mr Ullman: No. Q656 Mark Williams: Do you have any background information on the Severn Barrage scheme or the WaveDragon scheme in Pembrokeshire, Milford Haven, any gems that you would like to share with us? Dr Masters: I have some information on WaveDragon. They have funding in place from KP Renewables recently, funding from the European Framework Programme and from WEFO to build their first 7 megawatt device, which is going to be approximately 350 metres long and several thousand tonnes in weight. It is a significant piece of equipment. They want to roll that out from a single device to a farm of ten or eleven devices in two or three years' time. The issue that WaveDragon has is that there are no planning procedures for a multi-unit wave farm in existence, and they want to be applying for that now rather than waiting for the policy to work out, because they have got the funding and they have got the technology. They are in the early stages of building and deploying off Pembrokeshire. Q657 Mark Williams: The Severn Barrage has been mooted for so many years. You say it is no further ahead. What is your perspective on that? Mr Ullman: I have just had a discussion with the folks that have been pushing the barrage. I am sure you know that was studied from 1974 to 1987 and was eventually shelved because of costs. They are still looking at it. We are still hoping there is some financial reality to it. Q658 Nia Griffith: You included in your evidence the research by Friends of the Earth, the study saying lagoons are better than the barrage. Do you feel strongly that is the case, and can you see any potential for having a tidal lagoon in the Severn Barrage area? Mr Ullman: The Severn Barrage is potentially sited in the best tidal area in the UK, which is the second best in the world, and certainly tidal lagoons could be installed there. One would think that as this technology rolls out certainly it would be a potential site there. There are four basic problems with the barrage: it blocks navigation; it impedes fish migration; it changes the head pond in the area back a bit; and it changes the tidal regime downstream. Put those altogether and it creates an economic problem. When you bundle that all together it has been unrealistic to proceed with this. This is before you tackle the environmental issues involved. Q659 Chairman: Can I end by asking all of you this question. Of the schemes we have discussed today are they the only suitable sites in Wales, or are there potentially other sites for this kind of technology? Mr Ullman: The north-west Wales coastline; I have been asked to look at the Liverpool docks area, which is a potential site; all of the Severn estuary; and the Thames estuary: they are the sites for tidal lagoons. Q660 Mark Williams: Mr Verdi mentioned initially that there was a ranking procedure, particularly schemes around Wales had been ranked in terms of preference ----- Mr Verdi: Marine Current Turbines? Q661 Mark Williams: Yes. How extensive is that list? Mr Verdi: We have ranked it as the Skerrys first, then South Stack, Ramsey Sound, Bardsey, Bishop & Clerks and Pembroke. Chairman: Thank you very much for your evidence, including the written evidence you gave to us earlier. |