The proceedings are
recorded in the language in which they were spoken in the
committee. In addition, a transcription of the simultaneous
interpretation is included.
Aelodau’r pwyllgor yn
bresennol Committee members in
attendance
|
Mick Antoniw
|
Llafur Labour
|
Jeff Cuthbert
|
Llafur
Labour
|
Russell George
|
Ceidwadwyr Cymreig Welsh
Conservatives
|
Llyr Gruffydd
|
Plaid Cymru The Party of Wales
|
Janet Haworth
|
Ceidwadwyr Cymreig Welsh
Conservatives
|
Alun Ffred Jones
|
Plaid Cymru (Cadeirydd y Pwyllgor) The
Party of Wales (Committee Chair)
|
Julie Morgan
|
Llafur Labour
|
William Powell
|
Democratiaid Rhyddfrydol Cymru
Welsh Liberal
Democrats
|
Jenny Rathbone
|
Llafur Labour
|
Eraill yn bresennol Others in
attendance
|
Chris Blake
|
Cyfarwyddwr y Cymoedd
Gwyrdd
Director, The Green Valleys
|
David Clubb
|
Cyfarwyddwr, Renewable UK
Director, Renewable UK
|
Yr Athro/Professor Malcolm Eames
|
Sefydliad Ymchwil Carbon Isel,
Prifysgol Caerdydd Low Carbon Research Institute, Cardiff
University
|
Stephen Stewart
|
Cyfarwyddwr, SP Manweb
Director, SP Manweb
|
Nigel Turvey
|
Rheolwr Dylunio a Datblygu, Western
Power Distribution
Design and Development Manager, Western Power Distribution
|
Swyddogion Cynulliad Cenedlaethol Cymru yn
bresennol National Assembly for Wales officials
in attendance
|
Martha Da Gama Howells
|
Clerc
Clerk
|
Alan Simpson
|
Cynghorydd Arbenigol
Expert Adviser
|
Adam Vaughan
|
Dirprwy Glerc
Deputy Clerk
|
Graham Winter
|
Y Gwasanaeth Ymchwil
Research Service
|
Dechreuodd y cyfarfod am 09:32.
The meeting began at 09:32.
|
Cyflwyniad, Ymddiheuriadau a Dirprwyon
Introductions, Apologies and Substitutions
|
[1]
Alun Ffred Jones:
A gaf i ddechrau’r pwyllgor a
chroesawu’r tystion sydd o’n blaenau ni? Gwnaf jest
rhestru rhai o’r manylion arferol: os bydd larwm tân,
dylai pawb adael drwy’r allanfeydd, wrth gwrs; pawb i
ddiffodd eu ffonau symudol neu eu rhoi nhw ar ‘tawel’.
Rydym yn gweithredu’n ddwyieithog, felly os oes rhywun eisiau
holi yn Gymraeg neu’n Saesneg, gwnewch
hynny—mae’r cyfieithiad ar gael.
|
Alun Ffred Jones: May I start
the committee and welcome the witnesses we have before us? I will
just run through some housekeeping matters: if there’s a fire
alarm, everybody should leave through the exits, of course;
everyone should switch their mobile phones off or put them on
‘silent’. We operate bilingually, so if anyone wants to
ask questions in English or Welsh, feel free to do so—there
is simultaneous translation available.
|
[2]
Headsets are available if you are in need of translation or
augmentation.
|
[3]
Peidiwch â chyffwrdd
â’r botymau o’ch blaenau chi—mi fydd y
meicroffonau’n dod ymlaen heb i chi wneud dim byd. A oes
rhywun eisiau datgan buddiant o dan y Rheolau Sefydlog? Na. A gaf i
jest groesawu hefyd Alan Simpson atom ni, fel ein harbenigwr ni? Mi
fydd Alan yn cymryd rhan yn y sesiwn, wrth gwrs, yn ôl y
galw.
|
Don’t touch the buttons in
front of you—the microphones will come on without your having
to do anything. Would anyone like to declare an interest under the
Standing Orders? No. May I also welcome Alan Simpson to the
meeting, as our expert? Alan will be taking part in the session as
required.
|
09:33
|
Ymchwiliad i ‘Dyfodol Ynni
Callach i Gymru?’
Inquiry into ‘A Smarter Energy Future for Wales?’
|
[4]
Alun Ffred Jones:
Iawn. Fe wnawn ni fwrw ymlaen. A gaf
i ofyn i’r tystion gyflwyno eu hunain, os gwelwch yn dda, i
ddechrau? David.
|
Alun Ffred Jones: Okay. We will go ahead. May I
ask the witnesses to introduce themselves, please, to begin with?
David.
|
[5]
Mr Clubb: I’d like to start by saying that smart
energy is a sector that is—
|
[6]
Alun Ffred Jones: Before you start, could you just introduce
yourself and then I’ll come back to you?
|
[7]
Mr Clubb: I’m David Clubb, director of Renewable UK
Cymru. So, we represent not just renewables, but smart energy and
grid and all the rest of it.
|
[8]
Professor Eames: My name’s Professor Malcolm Eames,
from the Welsh School of Architecture at Cardiff University. My
background’s in science and technology policy and innovation
studies. I’ve worked in the area of energy policy and
sustainability for the last 20 years.
|
[9]
Mr Blake: I’m Chris Blake, from The Green Valleys,
which is a community organisation, supporting community energy, and
also with Community Energy Wales.
|
|
[10]
Alun Ffred Jones: Diolch yn
fawr iawn. Okay, then. Since you were about to embark on
something, before I ask the Members to ask questions, if you want
to make some introductory remarks, keep them short, but—.
David.
|
[11]
Mr Clubb: Just to say that the definition of smart energy is
quite important to the discussion that we’re about to have
and one of the conversations that we had earlier, when we were
waiting, was that smart energy isn’t necessarily something
that’s new or innovative, but it’s about how you use
energy and, of course, the most important thing is being smart with
the use of energy. So, I would say that energy reduction is the
smartest possible thing that you can discuss when we’re
talking about energy.
|
[12]
Professor Eames: Yes, I’d like to back that really.
I’d like to introduce my comments by saying that I’m
not sure that the label of smart energy is always particularly
helpful to the conversation and that I do feel that there’s a
lack of a shared understanding of what smart energy actually means
and that sometimes it does add to some confusion. But, clearly, the
smartest thing you can do with energy is to reduce demand, first of
all, and it doesn’t matter whether you do that through an
innovative piece of electronic control system in your house or
through a dumb piece of insulation, actually. The first thing
should be about reducing energy demand and then ensuring that
energy is supplied sustainably and that that’s low-carbon
energy and that we ensure that we have a socially just transition
to a low-carbon energy system.
|
[13]
Alun Ffred Jones: Diolch yn fawr. Chris Blake.
|
[14]
Mr Blake: The main thing I’m going to say is I’m
not going to put a great emphasis on technology and
tomorrow’s promises; I’m going to think that we can
make changes through organisation and institutions and changing the
way things and energy are organised. I don’t think we need a
technology revolution to be able to do this; I think that we can do
it now, without. Technology will help, storage will help, but
reorganising the way in which we take responsibility for energy
saving, energy distribution and energy generation can bring about
some improvements—enormous improvements.
|
[15]
Alun Ffred Jones: Obviously, I’ll encourage you to
answer the questions, but make sure that any statements that you
wish to make are made during the coming hour. Julie Morgan.
|
[16]
Julie Morgan: Thank you and bore da. You’ve already
started to answer the first question that I was going to put to
you, which is: what is the most important thing for Wales to do
within its existing powers to accelerate the transition to a
clean-energy economy? So, as I say, you have started to answer that
already, but could you be more specific, perhaps? Do you want to
start, David?
|
[17]
Mr Clubb: Yes. I think that the decision not to
significantly increase the requirements for energy efficiency on
new buildings and retrofit was a serious error. When I talk to
colleagues of mine who are involved in engineering companies, big
engineering companies, there was a lot of discussion in 2008 and
2009 about zero carbon housing and how Wales was a leader. They
said, ‘Of course, our companies criticised the direction of
travel because they viewed it as adding a cost, adding a burden,
but, as individuals within those companies, we very much enjoyed
being the go-to people for our friends in England and Scotland
about how to deliver this new technology and how to design these
amazing new buildings.’ So, by putting us kind of back to
where everybody else is in terms of regulation in the UK, I
don’t think we’ve done ourselves, our industry, and the
people who work in that sector, any favours.
|
[18]
So, we have those existing powers and I would say that we need to
be very ambitious in how we implement them and set strong goals for
zero carbon housing and then help our own building sector to
innovate and to win business on the basis of that because those are
skills and products that we can potentially export.
|
[19]
Julie Morgan: If I could just follow that up, what about the
statements by the big housing builders recently—about how
much more expensive it is or is going to be in Wales to
build—who obviously have a large share of the market? How do
we counter that? How do we cope with that?
|
[20]
Mr Clubb: I would say that those statements are ludicrous,
because we’ve got our own research products in Wales that
demonstrate the exact opposite: you can produce very high quality,
very good insulated houses for not much more than the cost of a
standard social house.
|
[21]
Alun Ffred Jones: Jeff, did you want to come in on this?
|
[22]
Jeff Cuthbert: Yes. Are you actually saying that to the
Redrows of this world, for example? Because I heard what their
chief executive said on the radio yesterday.
|
[23]
Mr Clubb: I don’t actually have a lot of time to
respond to a lot of the comment around the sector. If I had the
time and the opportunity, those are exactly the kind of comments
that I would be putting.
|
[24]
Alun Ffred Jones: Okay. The same question, I
presume—.
|
[25]
Professor Eames: If I could perhaps just come in on the
point that was—the discussion that was just being made,
actually, around house building, I think that we need to recognise
that Cardiff is actually projected to be the fastest-growing Core
City in the UK over the next 20 to 30 years. We’re looking at
something like 40,000 houses in Cardiff alone, in terms of new
build. That’s an important market for UK house builders, and
I do think that we have an opportunity to carve out a distinct
Welsh approach in terms of energy policy and in terms of
sustainability for the built environment more broadly and for our
towns and cities. That’s about setting challenging standards
with a clear vision for the overall goal of sustainability, in line
with the Assembly’s duty to pursue sustainability. So, I
think that we shouldn’t be distracted by some of what we hear
from the house builders. You know, they will see a market in
Cardiff, and, if there’s a level playing field for all of
those that need to build here and across Wales, then they will
build those houses, if there is the demand.
|
[26]
I think that, in terms of the overall vision for energy in Wales,
there is a need to develop a stronger, more cohesive vision for
energy policy overall in our country and that that vision needs to
play an integral part in motivating people across our society and
in mobilising resources across our society for transition to a low
carbon, sustainable Wales. I think at the moment that we’ve,
to some extent, become too in hock to energy policy developments in
Westminster and, quite frankly, energy policy in the UK at a UK
level has been a mess for the last 10 years, and we need to carve
out a distinctive vision. I think that we started to try and do
that some years ago and, to some extent, we’ve lost our way
more recently and we do need a clearer vision for energy in Wales.
When you look at European states such as Germany and Denmark that
are committing to a 100 per cent renewable future by 2050, I think
that we need to look to those sorts of examples rather than to
Westminster in how we frame our energy policy.
|
[27]
Alun Ffred Jones: I think there are a number of people who
are coming in, I presume on this point. Russell then Mick.
|
[28]
Russell George: It was picking up on—well, continuing
on energy reduction. Is there anything else, besides changing
housing standards, that is in the power of the Welsh Government in
regard to energy reduction, apart from housing standards?
|
[29]
Professor Eames: Could I pick up on that? One of the major
research projects I’ve lead in recent years was a programme
called ‘Retrofit 2050—re-engineering the city’, a
large UK research project funded by the Engineering and Physical
Sciences Research Council. As part of that work—a small part
of that work—we’ve looked at, in detail, a comparison
between retrofits of existing housing stock in Manchester and in
south Wales, in the Cardiff city region. What comes out of that
quite strongly is that, actually, Wales has been very progressive
and has been a leader through the Arbed programme and its other
initiatives in taking forward the retrofit of the existing housing
stock. So, I think we should also recognise where we’ve done
things well. I mean, I know that there are criticisms and there
have been some problems with Arbed in terms of delivery, but,
overall, actually, we’ve done a very good job in Wales of
delivering at scale, in terms of retrofit and building up a supply
chain. So, there are things we have done right.
|
[30]
As well as new build, it’s very important that we look at the
existing housing stock. One of the things about our housing stock
is that we have a much larger percentage of hard-to-treat
properties than anywhere else in the UK just about, and it’s
important that we recognise there are significant co-benefits that
come from reducing energy demand through improving health, through
tackling fuel poverty, and through creating employment, and
Arbed’s been very successful in doing that, and we need to
build on those sorts of initiatives in Wales.
|
[31]
Russell George: Is there anything else we can do
that’s perhaps not within the Welsh Government’s remit
at the moment, but in potential future powers that the Welsh
Government could have that would help—
|
[32]
Alun Ffred Jones: We’ll come on to future powers in a
minute.
|
[33]
Russell George: Okay.
|
[34]
Alun Ffred Jones: Are you on this point, Mick?
|
09:45
|
[35]
Mick Antoniw: On this point, yes. You say there’s
obviously been a lot achieved in terms of improving insulation,
cavity wall insulation, cladding and all the things like that, but
I have to say that there’s a lot of evidence now that in
actual fact an enormous amount of that money has just been totally
wasted and been unnecessary. I look in my constituency, and I have
enormous numbers of houses that have had all sorts of money spent
on them for this—for insulation, for example, that has not
only proven to be unnecessary, but has proven to be damaging, and
that’s something that’s beginning to appear all around
Wales. So, what evidence is there about the success of that? Do you
accept some of the criticisms that are beginning to emerge, and
that there needs to be a close examination as to whether, in actual
fact, we’ve actually been achieving very much at all, and
perhaps have been deluding ourselves as to how this money’s
been used?
|
[36]
Professor Eames: I don’t accept that we’ve been
deluding ourselves. I did preface my comments by saying that I
recognise there are criticisms and there have been problems with
delivery. I think that we also need to recognise that the scale at
which the programme has been rolled out is fairly unique in the UK.
There are some other examples of large-scale programmes, but there
aren’t many, and that will inevitably be challenging. I think
the important point is that we create a learning culture, where
throughout the supply chain we can improve standards and we can
learn from our mistakes. But the idea that we should simply do
nothing, or that improving the quality of the housing stock that we
have across Wales and improving the quality of life for many in our
communities—the idea that we can simply turn our back on that
and do nothing just isn’t credible.
|
[37]
Mick Antoniw: I’m not suggesting that, but what would
you say are the mistakes?
|
[38]
Professor Eames: From some of the evaluations that
I’ve read, there have been clear problems with external wall
insulation particularly: problems in terms of understanding and
skills necessary to actually apply that technology appropriately.
So, a lot of it comes down to fine detailing—getting the
guttering right, getting the detailing right around windows and
doors—and, if that isn’t done properly, then that leads
to further problems.
|
[39]
Alun Ffred Jones: This is getting a bit away from
Julie’s initial question. I’ll come back to you now,
Julie. Did you want to come in on this, Jenny?
|
[40]
Jenny Rathbone: Just to balance the picture, the experience
in my constituency up in Llanedeyrn has actually been a very
positive one, on the whole, and that was because the Mark Group did
have very high standards, and knew what they were doing.
People’s bills have been cut in half, literally—those
who could afford to get on to the programme. So I just wondered how
we could ensure, given that the Mark Group’s now had to go
into liquidation as a result of the UK Government, that those high
standards—you know, which body do you think ought to be
driving forward the high standards, or how could we ensure that we
have those high standards in all future work that we do of this
kind? Is it the Construction Industry Training Board or is
it—you know, which? How can we do that?
|
[41]
Professor Eames: I’m not sure I’m the best
person to answer that, to be honest.
|
[42]
Alun Ffred Jones:
A oeddet ti eisiau dod i mewn ar
hwn?
|
Alun Ffred Jones: Did you want to come
in on this?
|
[43]
Llyr Gruffydd: Not on energy efficiency, but on energy
mix.
|
[44]
Alun Ffred Jones: Okay, no; we’ll come back to that.
Julie, I think your question has—
|
[45]
Julie Morgan: Yes, I think that Chris Blake needs a chance
to say something.
|
[46]
Mr Blake: Just to address a couple of the points, I would
have thought, on David’s point about energy reduction and
standards when you build, isn’t that what the Well-being of
Future Generations (Wales) Act 2015 is supposed to do?
Doesn’t that put a requirement on us to—
|
[47]
Alun Ffred Jones: That remains to be seen.
|
[48]
Julie Morgan: We don’t know.
|
[49]
Mr Blake: But we have an—. There’s existing
legislation that could be applied that says, ‘Don’t
take the quick, cheap, easy task now; make a commitment to invest
for the long term’, because the total cost of ownership of
that property is going to be less if it’s insulated properly
than if its—. So, we have that piece of legislation
there.
|
[50]
I would go back to what Malcolm was saying. The Welsh Government
needs to set targets—not just targets, but also policy
objectives for energy, and I don’t think we’ve done
that. We lag so far behind. We don’t have to look to Denmark,
we just need to look to Scotland, which is well on its way to 100
per cent renewable electricity, and we’re so far behind that,
I’m not sure—. We don’t have specific targets, we
don’t know whether our objective is just to have—. We
don’t care if it’s foreign-owned and foreign-invested
renewable energy, how much of it we’re going to
have—does it matter if it’s nuclear, does it matter if
it’s distributed or centralised? Where’s the policy?
Where’s the guidance? If we don’t have a policy and a
map, how do we know what policy directions to set to get there? And
that’s something you can do within your existing
structures.
|
[51]
The other thing on energy efficiency we haven’t mentioned is
behaviour change, and I think the energy supply companies—the
big six companies—have had an appalling record of getting
energy behaviour change and energy saving done. I think it’s
been a travesty. It’s putting the sausage-makers in charge of
converting people to vegetarianism. It just doesn’t work;
it’s absurd. I think local supply and—I’m going
to say this—community involvement—. I think communities
can make behaviour change happen. If you tightly couple smart
meters, a local supply and intelligent local tariffs, which are
less when the wind turbine is working and when the sun is out, with
community involvement to overcome distrust and generate behaviour
change, it can make a huge difference to that element. So, yes,
insulation is important, but the behaviour change element
hasn’t been tackled, and I don’t think EDF Energy are
going to be trusted with the smart meter roll-out, and I
don’t think they’re going to be trusted with behaviour
change; it’s going to have to be local voices. And it’s
going to need very smart local tariffs that reflect when your
generator is operating—when there’s supply and when
there’s a surplus—which has multiple benefits for grid
capacity, generation involvement, acceptance of wind turbines and
the rest of it.
|
[52]
Alun Ffred Jones: Julie, do you want to come back?
|
[53]
Julie Morgan: Just one follow up, really. Malcolm raised the
issue of the houses that are going to be built in Cardiff—a
huge house building programme in Cardiff, a lot of it in my
constituency, and that’s going to start fairly soon,
really—as soon as the local development plan is agreed, which
will probably be by next year. What are we going to do to ensure
that those houses aren’t going to be built in the way so many
modern house are being built? Are the things that you’re
suggesting going to be quick enough to ensure this?
|
[54]
Mr Blake: I don’t know. In terms of house building and
standards, I can’t make a judgment on what powers
you’ve got, need or can do.
|
[55]
Alun Ffred Jones: Professor Eames, are you in a position to
answer?
|
[56]
Professor Eames: Yes. I think it is an urgent problem.
|
[57]
Julie Morgan: Yes, it is very urgent.
|
[58]
Professor Eames: I think that it relates not just to the
building regulations, but I think it relates to the overall design
and urban form and master planning in terms of looking at the
broader picture in terms of sustainability and energy use. So,
reducing the need to travel, reducing lights on cars—all of
these are important alongside household energy use.
|
[59]
I think that there are those professionals working within the City
of Cardiff Council who are very aware of these issues and would
like to do as much as they possibly can. I think it’s
important that the Assembly Government works as closely as possible
with Cardiff and the new city region board to try and deliver new
infrastructure and new housing to the highest and most sustainable
possible standards.
|
[60]
Alun Ffred Jones: But it’s down partly—. Outside
the building regs, it’s down to the local development plan.
The local development plan can direct a great deal of what
you’re talking about—or not, as the case may be.
|
[61]
Professor Eames: I recognise that, and that’s
obviously going to bind the possibilities. But, within the confines
of the plan, I think there’s still a great deal that can be
achieved.
|
[62]
Alun Ffred Jones: David.
|
[63]
Mr Clubb: The Welsh Government consultation on energy
efficiency closed a month and a half ago, I think, and I submitted
my comments to that, which were along the same lines as I described
earlier—fairly critical of the decisions taken previously.
That suggests that the Welsh Government will come out with a new
energy efficiency strategy fairly shortly, so I would also suggest
that that’s the one opportunity that we have within the time
frame that you suggest in order to ensure that those standards are
significantly raised for the first new swathe of house building in
Cardiff.
|
[64]
Julie Morgan: Because there will probably be more houses
built here than any other part of Wales, so it is very important.
Thank you very much.
|
[65]
Alun Ffred Jones: Mick, did you want to come in?
|
[66]
Mick Antoniw: Just briefly. We obviously have powers in
respect of building regulations, and we obviously have powers in
respect of planning and certain ancillary matters. Chris, you
mentioned that you didn’t feel you were confident in terms of
talking on some of the powers issues. But, aside from those powers,
the things that Chris Blake was talking about in terms of community
energy tariffs and so on—all those things are completely
outside our powers at the moment. The Wales Bill doesn’t
provide any relief for us in terms of that broader area, does
it?
|
[67]
Mr Blake: I disagree; I don’t think that’s
right. The possibility for locals—there are trials of local
supply going on in England at the moment. It can be done now. There
are probably changes coming up with Ofgem rules that will make that
easier in the future. So, there’s no reason why municipally
owned renewable generators in Wales could not be supplying locally
and could not be doing intelligent tariffs, coupling that with
behaviour-change examples, to start, for once, to address, perhaps,
some fuel poverty issues in relation to renewable and municipal
energy generation, which have not ever been tackled or even
mentioned. We can’t afford to wait for the changes in
legislation and powers. In my view, we have to act—lobby for
changes in legislation powers, but you’ve got to get on with
the suite you’ve got now. The ability to do local supply and
encourage and support municipal ownership of renewable
generation—we can do it now; we’re not waiting for
anything.
|
[68]
Mick Antoniw: But doesn’t that require additional
powers in respect of things like tariffs, in respect of the grid
and so on?
|
[69]
Mr Blake: The grid—I don’t know. The
grid’s a separate issue we might come back to. The
tariffs—yes, there are challenges with the tariffs.
They’re going to drive you towards certain types of
development and away from others. The municipal sector, I believe,
has advantages in terms of—if we can get some cheap
borrowing. We have a privileged relationship with some of the
state-owned land assets in the country that we could exploit. There
are things that, I believe, can still make some of these—.
You know, just because the Government is closing down support on
the levy control framework and tightening it up doesn’t mean
to say that we can’t find some renewable—. That
can’t be and shouldn’t be the end of renewable
generation in Wales.
|
[70]
Alun Ffred Jones: Reit, Llyr.
|
Alun Ffred Jones: Right, Llyr.
|
[71]
Llyr Gruffydd: Clearly, there have been people who feel that
the Government have lacked the strong strategic leadership
that’s needed, and I just wanted to start, and Chris has,
maybe, teased some of these issues out slightly already—.
What one thing could the Welsh Government do to signal that,
actually, we are serious about renewables in Wales and that is the
direction of travel from now on?
|
[72]
Mr Clubb: I’m quite happy to start with this one.
About a year and a half ago, the First Minister started his
strategic energy group—maybe it’s close to around two
years now. As one of the actions in one of the early meetings for
that, I took it upon myself to draft a renewable energy road map
for Wales for the group. That took considerable time and effort,
unpaid, and that was presented to the group, and the feedback and
the outcome of that was precisely zero. So, in the end, after
several requests that I could publish it, I just, myself, published
it as a discussion document, and that road map showed—well, I
came up with a number of recommendations, none of which were taken
on, but they included things like a discussion about where we want
Wales to be.
|
[73]
As Chris said earlier, we don’t know, by 2050, whether we
want to be exporting electricity or exporting twice as much
electricity as we use, whether we’re going to be generating
all of our heat from renewables or all of our transport.
We’ve got no idea. There’s no strategic vision. It
would be very straightforward to work that—to have a suite of
pathways that we would be interested in following and then
commission somebody to do an analysis of those different pathways
and what that meant in terms of carbon output and employment. We
haven’t got any strategy for renewable heat in Wales.
|
[74]
So, at the moment, what we have is industrial and commercial
players in the market that are acting on an ad hoc basis,
responsive to changes in UK policy, for example, or to localised
issues, but they can’t set a path for themselves and for
their own businesses to say, ‘Okay, by 2050, we know, for
sure, that there are going to be x thousand wind turbines and x
hundreds of thousands of solar panels.’ They can’t beat
a path in that direction, because they just don’t know where
it is that we’re going. So, I would agree with Chris that,
fundamentally, we need to have a road map, and we need some
credible analysis of what that would mean on a year-by-year basis,
so that businesses have the confidence to invest.
|
[75]
Alun Ffred Jones: What was the group you mentioned—was
it the strategic energy group?
|
[76]
Mr Clubb: Yes, the strategic energy delivery group. It was
started by the First Minister, now it’s Edwina
Hart’s.
|
[77]
Alun Ffred Jones: That met—. Is that still
meeting?
|
[78]
Mr Clubb: It’s still meeting. It met every six months
when the First Minister had the chair, and it meets approximately
every six weeks to two months now.
|
10:00
|
[79]
Alun Ffred Jones: And has it produced something, apart
from—?
|
[80]
Mr Clubb: I had high hopes for it when Mrs Hart took it over
because she displayed a lot more direct interest, I would say, in
the outcomes, but, sadly, I don’t think that we’ve had
a huge amount of outcomes. We’ve had some policy statements
and strong interest in nuclear, but I think it’s been
lacking, really, in the kind of very long-term vision that
we’d hope to see from the Welsh Government.
|
[81]
Alun Ffred Jones: Well, apparently, this group was set up on
the recommendation of this committee. So, well done, this
committee.
|
[82]
Llyr Gruffydd: Can I come in just on that point?
|
[83]
Alun Ffred Jones: Sorry. Llyr, just to finish off.
|
[84]
Llyr Gruffydd: I’ve noted that there’s a link to
your paper in the paper that you’ve submitted, although you
do recognise that, obviously, these things can become quite dated
because the financial environment or the fiscal environment
changes, as it has done of late. That seems to be the response of
the Welsh Government. When I ask about targets and these kinds of
clear steers, there tends to be a feeling of, ‘Well, you
know, there are so many elements that are out of our control that,
really, if we established targets we wouldn’t have real
influence over achieving those targets’. Do you recognise
that as an issue, or how do you expect the Government to set
targets if they don’t have the totality of powers to be able
to deliver those?
|
[85]
Mr Clubb: Yes. This has been the constant rejoinder, and I
have some sympathy with that because, to get any project consented
you need the consent—the permit—and you need a grid
connection and you need the financing. Clearly, at the moment
financing is a massive issue. On some aspects—so, consenting
the grid, for example—the Welsh Government doesn’t have
any powers anyway. So, two out of the three levers are absent, but
I don’t think that that absolves us from doing the discussion
and the thinking about it. One of the things that Rosemary Thomas,
the ex-chief planner for the Welsh Government, said yesterday at
the conference was just because we don’t have the levers to
be able to influence all of the things about renewable energy, it
doesn’t mean that we shouldn’t be trying to tackle some
of them. So, within the gift of the planning department,
they’ve done something that I think is quite a good piece of
legislation, with the planning Act, and they will make a difference
as and whenever conditions change. I think that exactly the same
should apply to renewable energy policy. We should have a vision.
Okay, even if we don’t have the levers by 2020, we can be a
bit vague about 2020 or 2025, but let’s have something that
we can bring to the table that says that, at 2050—. I mean,
we can all be fairly confident that something’s going to
happen by then. So, yes, there’s some validity to their
reluctance, but I would say we need to be far more ambitious.
|
[86]
Alun Ffred Jones: Russell, did you want to come in?
|
[87]
Russell George: Yes, just on that point. You mentioned that
your paper didn’t gain much traction. Was that from the First
Minister and Edwina Hart, or was that from the rest of the group? I
just wasn’t clear on that.
|
[88]
Mr Clubb: Well, I’m not really clear on that either.
It was noted as a document, and then I made some follow-up e-mails
and it never really went anywhere.
|
[89]
Russell George: All right.
|
[90]
Alun Ffred Jones: Okay. Jeff.
|
[91]
Jeff Cuthbert: Thank you. I suppose when you referred to
sausage makers, Glamorgan sausage makers would be okay for that
vegetarian—
|
[92]
Alun Ffred Jones: That’s an in-joke.
[Laughter.]
|
[93]
Jeff Cuthbert: Yes. You mentioned the provisions of the
wellbeing of future generations Act, which, yes, is coming into
force in April. The First Minister has now called for people to
help to inform what the indicators should be. Now, I don’t
want to get semantic over the use of indicators and targets, but
are you making it clear to the First Minister, in light of that
call, that there should be something firmer, in terms of this
field, contained within indicators for the monitoring of the
implementation of that Act?
|
[94]
Mr Clubb: I haven’t yet responded to that, and I think
that, in a sense, it would be a bit of a shame if we had to go by
proxy via another piece of legislation to say that renewable energy
in and of itself would be a marker for future generations. I
recognise that that might be one of the approaches that we take.
The environment Bill is also another proxy because via carbon
dioxide emissions you can do the same.
|
[95]
Jeff Cuthbert: Well, I would have thought that it was highly
relevant. There is a call there for it when all is said and
done.
|
[96]
Mr Clubb: Yes, there is, but renewable energy is one part of
overall energy. So, making that a totemic part of an indicator for
future generations, I’m not sure about. Zero carbon dioxide
emissions, I think, can be one, and a pathway to that, but the
problem with saying that we need an overall target for renewable
energy as a part of future generations is that that still
doesn’t give us what we need, which is a strategy and a
pathway. So, I’ll be making comments on the basis of that
consultation, but I’m not sure that that’s quite the
right place to put it.
|
[97]
Jeff Cuthbert: Okay.
|
[98]
Alun Ffred Jones: William Powell.
|
[99]
William Powell: Diolch, Gadeirydd. Mr Clubb made a pretty
damning indictment, really, of energy policy over the last few
years, and it’s clear that we need to up our game. Do you see
the future generations commissioner, when he or she is appointed,
as having a potential leadership role in this issue to actually
bring greater focus and possibly to join the committee that
you’ve spoken of with some frustration to give it some
additional edge and add to its potential for good?
|
[100]
Mr Clubb: I would say certainly not everything that the
Welsh Government has done on energy policy has been bad. So, I
don’t want to give that impression and we’ve had some
very productive discussions with Carl Sargeant in particular. I
think the future generations Act is a real game changer and, for
me, that’s one of the things that I’m most proud that
the National Assembly has done and the Welsh Government has done,
because that will provide leadership in a way that we haven’t
seen across the UK. It will also provide the private
sector—large business, small business and everybody in
between—with some kind of indication that there will be
demand in certain directions. So, we will be getting those
indicators and the local plans will have to show improvement along
the direction of those indicators. Businesses up and down Wales
will be starting to think, or should be starting to think, about
how they can innovate to provide those products and services. So, I
think that, yes, that’s something that can help. Peter Davies
currently sits on the energy group that I’ve mentioned, so
that position, presumably, would still be available.
|
[101]
William Powell: One other question that occurred to me a
little earlier: Professor Eames was referring to a deficit of
skills in terms of installers in terms of energy efficiency and so
on, and Mr Clubb’s referred to very high level benefits that
come from fresh thinking in planning. When it comes to our planning
departments up and down the country, is there a training need there
in terms of upskilling the front-line planners in terms of the
potential that planning has to make a positive contribution in this
area? Do you think that’s something we should be focusing
on?
|
[102]
Professor Eames: I’d cast it rather wider than that.
First of all, I’d say that my comments in terms of skills in
terms of installation of solid wall insulation, I don’t think
that’s—. That’s certainly not a problem unique to
Wales; I think that’s a problem across the industry as a
whole in the UK. In fact, we may be, in some senses, ahead of the
game, because we’re building up experience of trying to roll
out mass programmes in that respect.
|
[103]
In terms of your particular question about upskilling planners, I
think what we do need to recognise is that innovation to deliver
sustainable low-carbon energy isn’t simply about bits of kit
and about hard engineering, and that many of the problems—.
You know, in many cases, we have the kit, but what we don’t
have is the institutional organisational regulatory frameworks to
bring that stuff into mass deployment. So, when we think about
innovation, that needs to be in relation to innovative governance,
innovative regulatory frameworks and how we adapt market
structures, and, yes, planning is an important part of that, but it
goes much more—. It’s a much broader problem.
|
[104]
Alun Ffred Jones: What do we need to do? I mean, many of us
attended the SOLCER house; I don’t know whether you were
involved with that project.
|
[105]
Professor Eames: My colleagues in the department led
that.
|
[106]
Alun Ffred Jones: We were told that it was comparatively
cheap—well, not inexpensive, shall we say? It seemed to work,
it’s fairly roomy—nothing much wrong with it, really.
The windows were too small, but that’s another
issue—[Laughter.] Anyway, as you said, we have the
technology, so how do we move from where we are, building the usual
two-up or three-up, three-down with a garage and a little lawn? How
do we move from the old system to a new system? Obviously, it
won’t be uniform. How do we do that? Do you have any
ideas?
|
[107]
Professor Eames: Well, I think it does bring us back to the
issue of building regulations, to some extent. Even when
you’re looking at individual buildings, actually, the
evidence on innovation and drivers of innovation in the
construction industry quite clearly points to the importance of
regulation, and it’s not a politically very attractive
message, often, but, you know, that’s what the academic
literature says. Actually, regulation has a critical role to play
in driving standards in the construction industry. So, if we
don’t address that, then don’t expect things to
change.
|
[108]
Alun Ffred Jones: But if you phased it in, so that everybody
knew it was going to happen and so everybody could prepare,
because—. I know, Jeff, you want to come in on skill and the
skills issue.
|
[109]
Professor Eames: It’s setting clear standards, giving
industry notice in advance when changes will be coming in, and then
sticking to them.
|
[110]
Alun Ffred Jones: Did you want to come in on skills?
|
[111]
Jeff Cuthbert: Well, a little bit more generally, because,
obviously, it’s a no-brainer, isn’t it, that if
we’re going to have this future in terms of energy
generation, we have to make sure that those working in it have the
right level of skills, particularly in terms of your role in the
university. Do you feel that higher education and, indeed, further
education are as geared up as they ought to be for the provision of
those skills?
|
[112]
Professor Eames: I think that there have been a number of
significant attempts in Wales to develop those sorts of programmes
and, in fact, colleagues within the Welsh School of Architecture
have played a prominent role in that in relation to the built
environment sustainability training and Welsh energy sector
training programmes. Are we doing enough in terms of the long-term
transformation of this sector? Probably not. Is that for want of
trying? I don’t think so.
|
[113]
There is one particular issue that we haven’t come to yet
that relates to this, to some extent, in terms of the role of
research and academia, which I did want to highlight, and
that’s the question about the need for a comprehensive survey
of patterns of energy consumption and of Wales’s renewable
energy potential, because that’s an issue that we
did—myself and colleagues actually submitted relevant
evidence to this committee, some four years ago, in your inquiry on
energy policy and planning in Wales at that time, where we argued
that one of the problems facing policy makers in Wales was the
inadequacy of the evidence base.
|
[114]
At that time, what we had seen previously was an attempt to set a
number of very ambitious long-term targets, but without a clear
evidence base on how they could be delivered. Perhaps what
we’ve seen in the interim is a rolling-back from a
willingness to set ambitious targets, because of concerns about
powers to deliver. I can see that there is a problem there, but I
do think that, in terms of transformational change in these large,
complex systems, as a society, we do need ambitious long-term
targets. So, we need to see what the challenge is, going forward 50
years for Wales, and what sort of vision of a society we have that
we can all work towards and we can mobilise support for across
society. But there is a problem in terms of the evidence base to
look at how we deliver that in the shorter term, and, at the
moment—I mean, what we argued for in our submission then was
that there was a need for regional-scale integrated energy
modelling that would allow us to understand both the shape of
demand and how that may be reduced across Wales, but also what the
potential was for different energy technologies to deliver against
that demand or future export. We still don’t have the
capacity to do that in Wales. We don’t have an integrated
regional-scale model of the energy system for Wales, and I think
that’s unfortunate.
|
[115]
Alun Ffred Jones: Okay—. I’m sorry.
|
[116]
Jeff Cuthbert: I just wonder what David and
Chris—[Inaudible.]
|
[117]
Mr Clubb: I mean, I think we’ve got the capacity;
it’s just nobody’s done it—nobody’s been
paid to do it. Those models exist, and they’re very—you
know, it’s not rocket science to run through them and produce
some outputs. Like MARKAL and EnergyPLAN—
|
[118]
Professor Eames: They don’t—. There isn’t
a Welsh model. I mean, they will produce outputs for the UK as a
whole, but we don’t have a model for Wales, for the Welsh
energy system, that links demand and supply and future potential
supply.
|
10:15
|
[119]
Mr Clubb: Okay.
|
[120]
Mr Blake: I think Malcolm’s right. We’ve been
talking about the need for a strategy, and for some
targets—targets that are conditional on the powers. They
can’t be targets that we’re going to be held to account
to, but having the evidence base, making that a proper piece of
work that looks at energy use now, models various scenarios going
forward, how we can better meet that, and what our goals
are—that’s the work that really urgently needs to be
done.
|
[121]
Alun Ffred Jones: Who should be doing that?
|
[122]
Mr Blake: Well, I imagine it needs to be commissioned by the
Government. It’ll be a combination of industry professionals,
academics and other organisations who can put it together. It would
take a year or so, but we need to start now.
|
[123]
Alun Ffred Jones: Llyr.
|
[124]
Llyr Gruffydd: Yes. Gareth Wyn Jones, in his paper, suggests
there should be some sort of comprehensive survey of Wales’s
physical renewable energy potential. I presume that you’d see
that very much fitting into that kind of process.
|
[125]
Mr Blake: That would be part of that.
|
[126]
Professor Eames: Yes, we started doing some of that work
with funding we had through the Low Carbon Research Institute over
the last few years. So, for example, we developed a solar atlas,
looking at the availability of solar potential across Wales, and we
produced an energy atlas, looking at energy demand and looking at
energy supply, as a snapshot of energy supply for 2011, and the
Welsh Government subsequently commissioned a baseline study of
renewable energy, which built on quite a lot of the sources that
we’d collected together in the energy atlas that we produced
in 2011. But, really, that’s a fragment of the evidence base,
and to date we haven’t been able to find funding to produce
an integrated model and to keep that up to date in a way that would
actually allow it to inform policy going forward.
|
[127]
Llyr Gruffydd: How expensive would that be? I’ve no
idea. Would it be tens of millions, or a couple of million?
|
[128]
Professor Eames: No. It’s probably a couple of
million. At the moment, we probably would need to recruit some
additional capacity into Wales. Some of the people that we’ve
brought in through the Low Carbon Research Institute have
subsequently left to work elsewhere. So, for example, one of the
analysts who undertook this work with me now is working for the
European Commission and doing similar work for them, so we need to
build up capacity to do that in Wales, and it’s probably a
case of a couple of million over three years.
|
[129]
Alun Ffred Jones: The energy atlas is a public document,
presumably.
|
[130]
Professor Eames: Yes. We provided a copy of it to you in
previous evidence, but that was a snapshot. You need the capacity
both to build those systems but then actually to update them with
data annually. So, setting a system up would probably cost a couple
of million, and then a much lower—. Actually keeping that up
to date going forward would be a lot less.
|
[131]
Alun Ffred Jones: Technology changes, of course. Three years
ago I met a German industrialist who was very interested in solar
parks, and he showed me the areas in Wales he was interested in,
and they were confined to south Wales, basically down to
Pembrokeshire, and a little bit of the Llŷn peninsula.
They’re building them all over the place now in north Wales,
because, presumably, the technology has moved forward and it
doesn’t really matter where you put them.
|
[132]
Professor Eames: Well, I also think the scale at which the
maps of solar availability—the scale at which they were
available three or four years ago was pretty poor, actually, for
Wales. So, actually the detailed knowledge at a kilometre square,
if you like, didn’t exist, and we’ve developed
methodologies for how you look at that both at a regional scale in
Wales and at an urban scale, to give you a much more fine-grained
and accurate understanding of the availability.
|
[133]
Alun Ffred Jones: Janet Haworth.
|
[134]
Janet Haworth: Yes, I want to go back to housing, and
particularly to talk to Chris about his ideas about organisational
change, because it seems to me that, for a long time now, if we
look at Scandinavia, there are building methods that are quicker,
and certainly more energy efficient. If we look at the units, if we
look at houses, their use of energy, their use of water, and how
much each unit uses, then this is clearly an area that we should be
working in. But we have had problems, have we not, in the past with
our financial institutions being prepared to mortgage more
innovative building methodology? So, I think that’s a
question for Chris, really, around the organisation.
|
[135]
On the cost, clearly if you can put these properties up quicker,
because of the manufacturing methods, then that has to equal a cost
saving, because time is money. So, I’m interested in all of
that.
|
[136]
I’m not a doomster about the Wales Bill, but then I
wouldn’t be. I think it’s a draft, and that is an
opener for discussion. It’s only through discussion that a
Bill becomes an Act, and hopefully becomes a good and workable Act.
So, I think, as far as the Wales Bill is concerned, the
conversation has started, and it’s for us all to make a
contribution to that, and it doesn’t have to be something
that holds us back.
|
[137]
So, that’s what really interests me, because I think, for
years now, we’ve had this to-ing and fro-ing about the
methodology on building houses. The other thing I would very much
like to see, picking up on Chris’s comments about engaging
with people at the local level: I despair when I look at some of
the social housing we have, and I’m not—
|
[138]
Alun Ffred Jones: You may despair, but—
|
[139]
Janet Haworth: Yes, and I’m not surprised we have the
social problems that emanate from them. Why are we not working with
communities and asking them what kind of housing they want? Do they
want a lawn? They might not want a lawn. What design? They have no
input into this design, and I think by working with the local
community around a housing development, we would get some better
solutions as well as meeting some of these requirements for more
efficient energy use.
|
[140]
Mr Blake: My instincts are to agree with you, but I’m
not an expert on social housing design, financing or planning, so
changing that is not something I can comment on. I think we can
work with the people in the housing stock we’ve got at the
moment to reduce energy consumption. There’s a lot that can
be done with behaviour change and ways of operating within the
houses. I think that can be done, but I’m not the person to
answer questions on social housing design.
|
[141]
Janet Haworth: So, do you think there is mileage to be got
from retrofitting? We have some very depressed areas in our urban
settlements, and costs involved in regeneration, but is there
mileage to be got from regenerating those areas, again in
conversation with the local people, regarding what they would like
to see?
|
[142]
Mr Blake: My guess is it probably needs to be done in an
integrated way. So, no, we’re not going to take down all the
old houses and build new ones. It’s not going to happen, so
we’re going to have to retrofit. We’re going to have to
do that. You want to retrofit in conjunction with training,
behaviour change, smart meters, local generation, sensitive
tariffs, as I was saying earlier. You want that package put
together. Just putting in retrofit isn’t enough. Just doing
behaviour change isn’t enough. You need to mix those; the
whole element needs to be brought together.
|
[143]
Janet Haworth: Linking back to the future generations Bill,
some of the design we see in housing estates, you know, asks for
trouble. No-one’s thought about how people move about these
areas, what they actually need, or where they need it, and I would
like to see a lot more of that happening.
|
[144]
Professor Eames: Can I just comment on that?
|
[145]
Alun Ffred Jones: Yes.
|
[146]
Professor Eames: I think we should also recognise that,
actually, in Wales we have a great deal of expertise in those
areas, in Cardiff University, both in the school of architecture
and the design research unit there, and in the school of city and
regional planning. We actually have a great deal of expertise in
community-focused design and those sorts of approaches. So, in
terms of a knowledge base to draw on, I think there’s a lot
there and a lot of willingness on the part of academics within
those institutions to engage with community-oriented processes.
|
[147]
Janet Haworth: Do we still have a battle with the financial
institutions, who seem to be quite happy in Europe to mortgage and
loan on these innovative buildings, as they’ve been doing for
20 or 30 years now? Do we still have a battle here with our
financial institutions?
|
[148]
Professor Eames: Yes. It comes back to the point I made
earlier about the need for financial governance and financial and
institutional innovation, because, yes, there are very significant
differences between the way in which financial institutions operate
in Germany, for example, and the role of their—. Sorry,
I’m trying to remember the acronym for the state bank there
that underwrites a lot of energy efficiency retrofits.
|
[149]
Alun Ffred Jones: We visited one of those banks when we were
in Freiburg, didn’t we?
|
[150]
Mr Simpson: KfW.
|
[151]
Professor Eames: Yes, KfW.
|
[152]
Alun Ffred Jones: Llyr, oeddet
ti eisiau dod i mewn?
|
Alun Ffred Jones: Llyr, did you want to
come in?
|
[153]
Llyr Gruffydd: I want to talk about community energy, if I
may. Clearly, there have been initiatives and programmes, albeit at
quite a modest scale and level, to grow and encourage community
energy projects. So, what needs to be done? What are the things
that need to be there in order for us to realise what I believe is
a huge, huge potential and would have that transformative effect
you talked about earlier?
|
[154]
Mr Blake: I think if we’re going to—. Especially
with what’s been happening in Westminster, the need is for us
to—. We’ve got to do things at scale, and I think too
many community energy projects have been at too small a scale. They
have great benefit. I mean, having a small village with a 50 KW
hydro scheme or 200 KW photovoltaics—. It’s very
important that it brings in—it has been bringing in income,
and there’s nothing against that. But if we’re going to
make a difference, I think community—and I’m going to
use community and municipal energy together—and socially
owned energy needs to be operating at the megawatt scale. I think
it needs to be operating—. And I’m going to keep coming
back to this point: it needs to be coming back and generating and
selling locally. If you had a municipal generator with community
interest and a community role that it was playing, whose primary
function was not to sell as many units as it can to its people, but
also has other social goals such as reducing fuel poverty, reducing
energy consumption, minimising the amount of energy that has to be
imported into the area from other sources—if you make those
goals, you go about things in a different way, and you will achieve
a lot of those advantages.
|
[155]
I think that needs to be done. That needs to be done in a joined-up
way. It’s not something that individual small community
groups can do; it needs Government policy. It needs intention, it
needs local authorities, but working in partnership together to
deliver some—
|
[156]
Alun Ffred Jones: One of the problems with community groups,
they tell me very often, is that they have to reinvent the wheel
every time. Every time one starts up, they go through all this
issue of how they set up, then the consents have to be explained
and then they find out that it’s a long process. And then
there’s a lot of energy or effort wasted on setting those up,
and sometimes, of course, they end up with a brick wall. It seems
to me that there’s something around that area that needs to
be smoothed.
|
[157]
Mr Blake: That is true. I mean, there are a lot of support
mechanisms to help those communities go through it, and the
mechanism and the empowerment of some of those communities—.
I’ve been supporting some communities in the north of the
Rhondda. Some of those projects may not succeed, but, actually,
there have still been some benefits in that process. I would agree
with you: I think we need a more professional and considered
approach to municipal energy ownership in Wales. That needs
professionals involved, that needs strategic planning, it needs
looking at the resources, it needs looking at the opportunities,
looking at the land and assets that are in public ownership, coming
up with plans to develop that, and using industry experts to make
the smart decisions and make some quite ruthless decisions.
We’re investing a lot of effort and public money in some of
these projects; they need to be in the right places, and that focus
needs to be there, and it doesn’t exist at the moment.
|
[158]
There’s a tragedy here, which I think is that, under the
support, or the billions of pounds that the levy control framework
has taken from consumers’ bills to support renewable energy,
I don’t know the figure, but it’s certainly less than 1
per cent—a lot less than 1 per cent—of that money and
support that has ended up in community and municipally owned
schemes. Nearly all of that is in private development schemes that
are usually foreign-owned and foreign-financed. The economic
benefits of those billions that have been taken off
everyone’s bills in Wales have not ended up in Wales, and
that economic benefit has not been part of the criteria. That
support under the levy control framework is coming to an end, so
it’s spilt milk—there’s a missed opportunity
here—but one of my goals for this energy vision and strategy
we’ve got going forward is ownership, and it needs to be
professionally done, and economic recycling, and keeping that value
within Wales is vitally important and one of the planks of that
strategy.
|
10:30
|
[159]
Alun Ffred Jones: Llyr.
|
[160]
Llyr Gruffydd: I agree with everything that you’ve
said, and I agree with what needs to be done, but the question that
we’re grappling with is how do we do it, and who does it? So,
would you see, then, that there’s a role for the Government,
either directly, or through a newly created agency, or through
existing bodies, to put boots on the ground, working with
communities, or industry experts, and technical specialisms being
placed within local authorities? You know, what are the
dynamics?
|
[161]
Mr Blake: My experience tells me that it can’t be done
at the local authority level. They’ve been trying and
they’ve failed. They don’t have the will, the cash or
the expertise to do it. So, I think it probably has to be done at a
national level, but in partnership with local authorities and in
partnership with communities. So, my hunch—. I haven’t
thought this through, but I would have thought that an
agency—quite a small one—would be a good place to
start.
|
[162]
Alun Ffred Jones: David, and then Jenny and—oh,
suddenly everybody. Right. David.
|
[163]
Mr Clubb: I used to work in the energy agency sector, so I
have sympathy for anybody who’s trying to develop a community
energy project, because it’s much more difficult than it is
for a commercial operator. So, for that reason, if you want to have
similar levels of success, you either need to put the same amount
of resources in, from the public sector, or the community sector
somehow, or change the nature of the game, so that the planning
system rewards those projects that come from the community sector.
So, we did have some discussion with Carl Sargeant about a presumed
concept for community energy projects, but that didn’t go
anywhere at the time of the Planning (Wales) Act 2015, but I think
that would be one interesting way, potentially, to think about how
that might be levelled.
|
[164]
I think an energy agency is an interesting suggestion, and
it’s one that I have mentioned within the strategic energy
group, which, again, didn’t go particularly far, but the
experiences in Austria—upper Austria in particular—and
other European countries demonstrate that these can be game
changers in the way that they enable people to interact, and the
way that they can support community energy projects. I would just
say, if I may, in defence of the private sector, Chris, that
foreign ownership of assets in Wales is not restricted to energy.
As Calvin Jones makes very clear, this is an issue about Wales
being poor and not having capital, and most of our assets are
private sector assets, and all sorts of infrastructure, are owned
by foreign companies. So, I would say that there are issues there
about what Welsh Government could do to start incentivising more
Welsh-owned assets, but I don’t think that it’s just
energy that’s the issue.
|
[165]
Alun Ffred Jones: Jenny, are you on this?
|
[166]
Jenny Rathbone: If local authorities have neither the will,
the money nor the expertise, on what scale, then, would we be
considering doing it? Would we be doing it in terms of a town, or
at a local authority, geographical level? What is it that makes
most sense, or what’s the optimal size of a population to be
doing it on?
|
[167]
Mr Blake: I suppose what I’ve got in mind is an agency
that is a catalyst. It’s a catalyst that is going to bring in
the professional expertise, that’s working within this energy
strategy that we’ve got, and that’s got the ability to
look at the best sites and the best opportunities nationally.
It’s no good picking a town and saying, ‘Right, we will
do our energy development here’ and then it not having the
right resources or the best capacity. So, let’s look
nationally, let’s bring in the expertise, let’s work in
partnership with the private sector, let’s work in
partnership with municipal land owners and other asset owners,
let’s find the best sites, let’s develop those sites
professionally and well, and have them in joint ventures between
the private sector and local authorities and communities that are
affected by those groups, and have it integrated—not just to
have generation to the grid at 5p a unit and forget about it, but
to have it selling to the local community. Let’s have it
selling electricity to the housing association, have these smart
tariffs and have these local involvements. It’s that
integrated model that we need, but if we don’t have the
assets that we own do to that, it won’t come about.
|
[168]
Jenny Rathbone: Okay. But how are we going to get around the
fact that Ofgem demands that whatever energy is generated is sold
to the grid?
|
[169]
Mr Blake: Ofgem will tell you straight that that is not the
case—that they don’t require it and that they are all
for diversity and they are all for different approaches. It’s
very difficult at the moment, but it is—. Okay, I’m
plucking out pilots that are happening at the moment, and the
newest is the launch of Piclo—which is supported by Good
Energy—a couple of weeks ago, which is matching individual
generators with individual, single, large consumers in a one-to-one
relationship, with a price set by the generator. That’s a
trial, a six-month trial, which is operating now. The National
Trust are selling electricity to the Eden Project through that
mechanism.
|
[170]
There is Energy Local, which is doing the same thing, but selling
individual, locally generated electricity to consumers with
flexible tariffs. That’s a trial that’s happening in
England at the moment and we’re looking to bring a trial of
that to Wales. That is all happening within the current regulatory
framework. So, I think a lot can be done right now.
|
[171]
Jenny Rathbone: So, it’s a myth then.
|
[172]
Mr Blake: Well, it’s not a myth; it has been very
difficult. The Ofgem rules and the energy supply regulations have
been a nightmare—you have to have one of the big six
partners, who haven’t really been very co-operative. The last
thing—
|
[173]
Jenny Rathbone: You have to have one of the big six
partners.
|
[174]
Mr Blake: You have to have them basically underwriting the
arrangements, because of load balancing and all the other things.
But Co-operative Energy and Good Energy are actively exploring
these opportunities.
|
[175]
Alun Ffred Jones: I’ve got a number of names down now
and I’m just conscious of the time, so be brief and
I’ve got one question then from Alan at the end. So, Jeff to
begin with.
|
[176]
Jeff Cuthbert: Yes. Linked to this, I’m returning
again to the wellbeing of future generations Act, which, as you
know, has seven goals at its heart, and will put new public service
boards on a statutory basis. In terms of local government, I accept
your point, probably the existing local authorities don’t
have expertise in terms of helping to develop and direct community
energy projects, but, undoubtedly, there will be fewer local
authorities as we go on—we don’t know exactly the shape
in Wales, but there will be fewer—and, of course, they will
be organised with other relevant public bodies on the public
service boards. So, do you think that there could be scope here
under the provisions of this particular Act to actually move
forward in this way and that it’s incumbent on all of
us—yourselves included—to lobby for that to happen?
|
[177]
Alun Ffred Jones: I think that’s a political question,
really.
|
[178]
Mr Blake: I suppose I think we need to get on with something
now. Maybe we need a municipal energy agency set up, with a short
life, to create example projects, to invest in some projects and
schemes. Maybe the public service boards in the future can take on
that role, but they’re going to be years away.
|
[179]
Jeff Cuthbert: No.
|
[180]
Mr Blake: If we sit back until they’re—. Well,
until they’re up and running so that they’ve got
their—. Until energy comes to the top of their agenda, until
they’ve got a commitment to do it, until they’ve got
the expertise to do it, it will be years. So, let’s act now
and let’s get some projects up and running, which can then
act as exemplars for public service boards to implement in their
regions.
|
[181]
Jeff Cuthbert: That’s fine; I mean, I’ve got no
problem with doing something now, but you do think that, in due
course, the public service boards could adopt this?
|
[182]
Mr Blake: Quite possibly. They could adopt it, yes, but I
would be worried by the implied pause.
|
[183]
Alun Ffred Jones: Mick Antoniw.
|
[184]
Mick Antoniw: I’m just interested in the points that
you made about an agency or whatever. I’ve been involved with
the attempted Treforest hydro project and it is almost doomed to
failure—it’s almost impossible to drive through from a
genuine community group, and there you have a community, you have
the university there, which could be a potential buyer and so on.
So, you’d actually see this as really being something that
would actually almost drive it forward, working in partnership with
the community, rather than it—.
|
[185]
Mr Blake: I agree with you; I’m aware of the Treforest
problems. One of the difficulties that some community groups have
is that the community groups can’t move location. Renewable
developers can. Renewable developers aren’t tied—. They
get a great momentum behind a project and have strong leaders and a
strong commitment from the community and they will back a project.
I’m not going to make a judgment on whether Treforest should
or shouldn’t go ahead, or should have been—. But,
because they are in that community, and that is their weir and that
is the site, they will push that regardless. There’s an
advantage in being above that and being able to say, actually, for
reasons that are—let’s say they are—valid, that
isn’t the best site to develop; there are other ones
elsewhere. Communities have that limitation in that they are tied
to a geography. If that geography isn’t the best for
development, they’ll still keep going at it. And, sometimes,
as a private renewable developer will do—. They’re not
even tied to a community, not tied to Wales, and can go anywhere,
and that’s what’s going to be happening. If Wales
doesn’t make noises about a commitment to a renewable energy
future, the professionals will be in Norway, Sweden, Venezuela next
year, and we won’t have the skills or the expertise to take
it forward.
|
[186]
Alun Ffred Jones: Thank you. William.
|
[187]
William Powell: Thank you, Chair. With all the constraints
that there are on grid connection and the need to build up scale
that you’ve referred to, what is the role of energy parks
such as we’ve seen developed, to some extent, in Ynys
Môn and Pembrokeshire? Do you think that they would be
something that should be developed more widely in Wales?
|
[188]
Mr Clubb: If I can answer this, I’m a big supporter of
the concept of co-locating a lot of different energy generating
technologies in the same place. There’s another very related
idea of a wind hub, which is based on a wave hub idea, but where
you also locate storage, and so, in effect a wave hub. Mid Wales is
a particular problem for grid, and east Wales, as Chris wrote about
in an article. So, if you can obviate the need for that grid
upgrade, then you take six years away from the development of a
project and you get things that can happen right now. So, I think
that there’s logic behind it, and there’s the ability
to drive projects forward rather more quickly than you might have
to if you were relying just on grid development. I think that Welsh
Government is working with groups on a number of projects on this
type of concept, but I don’t have any further information
about the nature of those projects. I think it’s an idea
whose time is coming fairly soon.
|
[189]
William Powell: And can that combine terrestrial and marine
environments also?
|
[190]
Mr Clubb: The marine environment’s probably a bit more
complex, because the resource there tends not to be co-located. You
may not get tidal stream, for example, in the same place as a good
wave resource. So, it’s probable that you’ll just get
one type of development there. But, certainly, Pen y Cymoedd is a
good example of a wind project where they are also looking at
deploying solar. As it’s in a forestry area, you might be
looking at deploying innovative gasification technology for
biomass. So, because the grid for exporting the wind electricity
isn’t used 100 per cent all the time, you can fill in the
gaps, basically, with other technologies. So, it’s a very
cost-effective way of making best use of the grid. It just
complicates things, because you’re not just dealing then with
one technology and one application. I know that Natural Resources
Wales has done some very good work in encouraging developers to
come forward with multiple technologies on one site.
|
[191]
William Powell: That’s helpful. Thank you.
|
[192]
Alun Ffred Jones: Okay. We’re coming to the end of our
session, and Alan is going to finish things off with a very
difficult question.
|
[193]
Mr Simpson: Well, if you might, Chair, just allow me to
follow up something that you also raised in relation to
communities. Can I just pitch one at Chris? Because both you and
Llyr raised this question about complexity. Chris, would you accept
that it’s worth distinguishing between development and
de-risking in the way that—? Malcom’s point about the
role of KfW in Germany; it de-risks the process by making a lot of
this reinventing of the wheel unnecessary. If the bank
couldn’t do that, it is perfectly feasible for a Government
to de-risk, so that communities didn’t have to reinvent the
wheel. So, would you accept that de-risking can be separated from
development?
|
[194]
Mr Blake: Yes. Absolutely.
|
[195]
Mr Simpson: In terms of the broader picture, though, several
of the different strands that have come together, whether
it’s to do with generation, whether it’s to do with
energy efficiency savings, whether it’s to do with transport
or water, seem to require an umbrella, and some of you seem to have
suggested that the Environment (Wales) Bill that’s going
through actually might be such an umbrella. If it was, in the
context of Paris, then there need to be carbon targets in the Bill.
If you were in a position to say what the targets should be, what
would each of you put in the Bill as an annual or a 2020 or decadal
targets, as an obligatory target reduction that had to be put in
that Bill? It seems to me that regulations and
mechanisms—develop the mechanisms—would follow a duty,
so where would you pitch it?
|
[196]
Mr Clubb: I’d use the evidence that’s available.
So, attempting to meet the 2 degrees warming and the UK’s
fair share of that—that would be the absolute minimum that
you’d need—and then have that requirement on all parts
of the economy. Of course, you can’t oblige the private
sector in the same way as you can the public sector. But, still,
that should be the bare-minimum baseline.
|
10:45
|
[197]
Mr Simpson: Chair, I just wanted to come in, because France
is actually doing this. Denmark is doing this. They’re saying
you have to meet carbon-reduction obligations—private sector
as well as the public sector. In France, you can’t now put a
building up that doesn’t either have a solar roof or a nature
roof. Denmark won’t consider planning applications that are
based on fossil fuels. All of this is around defined
carbon-reduction targets. So, what is the carbon target that
you’d like to see in that environment Bill?
|
[198]
Mr Clubb: Like I say, I would base it on the evidence, in
order to meet the best possible outcome of what’s happening
at the moment through existing climate change. But I would say
that—. I fully take the point; I think we can do a huge
amount with requiring, in planning applications, integrated
renewable energy. But I’d be interested to know about the
sanctions on a private-sector company. For example, somebody
delivering flowers or whatever, if their target is 5 per cent
carbon dioxide reduction a year, what’s the sanction if they
fail that?
|
[199]
Mr Simpson: I think this is—. I have to say, Chair, I
think this is ducking the putting down of a benchmark—
|
[200]
Alun Ffred Jones: Are you looking for a figure?
|
[201]
Mr Simpson: I’m looking for a figure, because it seems
to me, David, the danger is we can get lots of phrases and warm
words, and, if that’s as much as is going to get put in the
Bill, it’s a waste of time. So, you’re here with an
opportunity to tell the committee what you would like to see as a
recommended figure that goes in. So, what would it be? You
won’t get many chances to say.
|
[202]
Mr Clubb: Zero by 2050.
|
[203]
Mr Simpson: Zero by 2050.
|
[204]
Mr Blake: Sounds good. And it needs to be—. It has got
to be—. We’re talking about the need for a strategy and
some targets and some goals. I can’t tell you what that
figure is—maybe that’s the right one—but it needs
to be in there; it needs to be central. And it needs to be
understood. To shy away from setting targets because we might get
criticised in the future because we didn’t meet it, because
we didn’t have all the powers—that is a feeble and weak
excuse. We have to set the targets and we have to explain that we
don’t have all the powers to deliver it, but we’re
going to do our best and we’re going to identify—. If
we can’t meet it, then let’s find out what powers we
need. If we don’t start with a target and a goal, then
we’re going to get nowhere—which is, unfortunately,
pretty much where we’ve got to.
|
[205]
Professor Eames: I think that there are some complicated
issues about how you separate out the Welsh energy system from the
rest of the UK in terms of setting targets, and also a heap of
issues around devolved powers and what we can influence and what we
can’t. I wouldn’t disagree with the idea of zero carbon
by 2050. I’d add to that that we should also look at targets
for renewable generation, and that we should be aiming to be net
exporter of renewable energy, and we that should look very hard at
the timescales over which we should set those targets to drive
development.
|
[206]
Alun Ffred Jones: Well, you haven’t got your answer,
Alan, but we’ll have to conclude matters there. If you think
of a figure between now and tomorrow, perhaps you can send it
on.
|
[207]
Professor Eames: What I would say is that I would stress
that point about needing not just a zero carbon target, but
actually a target for renewable energy production.
|
[208]
Alun Ffred Jones: Diolch yn fawr iawn. May I thank the three
of you for coming in this morning and for helping us in our
deliberations? Obviously, we’ll send you a transcript for you
to check for accuracy. But, for the time being, diolch yn fawr
iawn—thank you very much.
|
[209]
We’ll just have a couple of minutes, then we’ll break
quickly.
|
Gohiriwyd y
cyfarfod rhwng 10:49 a 11:10. The meeting
adjourned between 10:49 and 11:10.
|
Ymchwiliad i ‘Dyfodol Ynni
Callach i Gymru?’
Inquiry into ‘A Smarter Energy Future for Wales?’
|
[210]
Alun Ffred Jones: Now, we are in public session, obviously.
[Interruption.] Pardon?
|
[211]
Russell George: The private session was ‘in
camera’.
|
[212]
Mr Vaughan: That means ‘in private’. It’s
Latin, I think.
|
[213]
Alun Ffred Jones: It is.
|
[214]
Russell: Oh, is it? I didn’t know that.
|
[215]
Mr Vaughan: [Inaudible.]
|
[216]
Russell George: [Inaudible.] [Laughter.]
|
[217]
Alun Ffred Jones: ‘In camera’ is ‘in
private’. Now, we are in open session. [Laughter.]
Right, we are now in session and we welcome our two
witnesses—two guests. I will ask them, when they’ve
settled down, to introduce themselves. You don’t need to
touch the mikes during the session. They will come on
magically.
|
[218]
May I welcome you here? Thank you for attending the evidence
session as part of our inquiry into a smarter energy future for
Wales. So, can I ask both of you just to introduce yourselves, in
terms of your names and who you represent?
|
[219]
Mr Turvey: Yes. I’m Nigel Turvey. I’m the design
and development manager at Western Power Distribution. In that
role, I have a strong lead on our engineering policies, the
development of our extra-high-voltage networks, and I also deal
with a number of our commercial policies and things like the use of
system tariffs.
|
[220]
Alun Ffred Jones: Diolch yn fawr. Stephen.
|
[221]
Mr Stewart: Good morning and thank you for inviting us
along. My name is Stephen Stewart and I’m the distribution
director for the Manweb area. That covers Merseyside, Cheshire and
north Wales. I have directorate responsibilities for all network
activities in that area—both operations connections and
delivery programmes. That includes the 444,000 customers we have in
north Wales.
|
[222]
Alun Ffred Jones: Thank you very much. Right, well, Members
will ask their questions, and we’re kicking off with Jenny
Rathbone.
|
[223]
Jenny Rathbone: Good morning. Turning to Mr Turvey’s
paper, just looking at page 2 and the grid information that
you’ve given us, could you just talk us through how much of
the energy currently distributed by you is from renewables? It
appears to be roughly half. Is that correct?
|
[224]
Mr Turvey: I’ve actually got some numbers in terms of
the amount of energy. The table I’ve put in that note is
about the capacity connected. So, for example, solar—
|
[225]
Jenny Rathbone: On page 2.
|
[226]
Mr Turvey: Yes, sorry. On page 2, the table there is about
the capacity that’s been connected. So, for example, with a
photovoltaic cell, although you might have connected 10 kW of PV,
clearly, it doesn’t produce energy overnight. Therefore, it
produces a lot less energy than is actually the connected capacity.
If you look at it from the viewpoint of the amount of energy that
comes out of those renewable projects, we currently have—. In
terms of those renewable projects that are already connected or are
committed to connect, they would produce energy that would
represent about 37 per cent of the energy usage in south Wales.
|
[227]
Jenny Rathbone: So, about 37 per cent is renewable
energy.
|
[228]
Mr Turvey: It’s not actually connected at the present
time. That’s stuff that is both connected and committed to be
connected.
|
[229]
Jenny Rathbone: Okay. What have we got at the moment,
then?
|
[230]
Mr Turvey: It’s about 7 per cent at the moment.
|
[231]
Jenny Rathbone: Seven per cent?
|
[232]
Mr Turvey: Connected in south Wales—yes.
|
[233]
Jenny Rathbone: That’s obviously extremely low. Why is
it so low?
|
[234]
Mr Turvey: It’s just the speed at which projects have
progressed. As I say, there are a lot of projects that have
accepted offers for connection to the network. We understand they
are progressing towards their connection. Once connected, that
would represent 37 per cent of the energy.
|
[235]
Jenny Rathbone: Okay. So, once—. Could you talk us
through why it’s not possible to prioritise renewables over
other, dirty sources of energy, as long as, obviously, you’ve
got the connections? You say that 37 per cent is what you’re
hoping for.
|
[236]
Mr Turvey: Yes.
|
[237]
Jenny Rathbone: How are we going to increase on that?
|
11:15
|
[238]
Mr Turvey: In terms of being able to prioritise, we’re
covered by a licensing regime, which is administered by our
regulator, Ofgem. We are not allowed to have undue discrimination
between different parties. So, if we get a gas-fired power station
or an energy-from-waste-type station, and a photovoltaic station,
we’re not allowed to discriminate between the connection
offer we make to them, and so the priority really becomes the order
in which they apply for connection.
|
[239]
Jenny Rathbone: Can you just explain what you mean by
‘undue discrimination’? Surely, there must be some
discrimination.
|
[240]
Mr Turvey: Sorry, yes. The reason I emphasised the
‘undue’ was, for example, when you get down to
community energy, whilst we are not allowed to discriminate in
terms of the priority we give them for access to the network, we
are allowed to discriminate in terms of how we provide information
to them. So, for example, community energy groups need different
information to commercial developers. So, we’re allowed to
enhance the information that we give to community energy,
we’re allowed to do a lot more work with them, and that
wouldn’t be considered as discrimination between customer
classes in terms of being undue. So, it really is about that
balance of when it is helpful as opposed to actually skewing the
market, I think, which is probably, perhaps, the best way of trying
to describe it in terms of how that undue test is given.
|
[241]
Jenny Rathbone: Okay. What customers are struggling to
understand is why we would use dirty energy if there is clean
energy available.
|
[242]
Mr Turvey: We have a duty to facilitate the connection of
anyone who seeks to connect to the network. So, we are not able to
make a judgment on the social benefit of what’s
connecting.
|
[243]
Jenny Rathbone: Okay, but that’s because if
you’re—. I guess I’m struggling here.
You’re getting the energy from the grid, or you’re
sending it back to the grid.
|
[244]
Mr Turvey: Well, at the moment, it’s coming from
distributed generation, which is connected to our network, and the
balance comes down from the grid.
|
[245]
Jenny Rathbone: Okay.
|
[246]
Alun Ffred Jones: Do you have any carbon reduction
obligations in place?
|
[247]
Mr Turvey: Not directly on us, no. Clearly, we have some
obligations to try and reduce system losses. So, that is a constant
balancing act of how we—
|
[248]
Alun Ffred Jones: Sorry—system losses?
|
[249]
Mr Turvey: In terms of when you distribute energy across a
wire it naturally heats up to a certain extent as that passes. That
heat is dissipated to the air, and that is a loss to the system. We
have obligations to look at ways of trying to reduce those system
losses by the way we use our network and the way we configure our
network.
|
[250]
Alun Ffred Jones: Okay. Julie Morgan.
|
[251]
Julie Morgan: Just following up from Jenny’s
questions, I’m very surprised that the figure is only 7 per
cent. I wanted to ask: what is your relationship with the 30 per
cent that you say are coming on-stream? I mean, how definite are
those projects, and do you keep in touch with them, giving them
information? Are you implying that you encourage them? What is your
relationship?
|
[252]
Mr Turvey: Well, our relationship is a contractual one.
What’s actually happened for them to get to that point is:
they have applied to us for a connection to the network, we have
offered them terms for that connection, including what it would
cost for that connection, they’ve accepted those terms, and
we’re now working through a process of, really, exchanging
information as they move towards the point where they can be
connected. They may still be finalising their planning consents or
finalising their financial structures to actually facilitate that
process.
|
[253]
Julie Morgan: So, you anticipate that that 30 per cent will
actually happen—that it’s sure.
|
[254]
Mr Turvey: I wouldn’t say it’s sure. Some of
those projects will drop out. Some of them will fail for reasons of
planning issues, or will fail for reasons of financing the project,
or perhaps even some of them have got to the point in the cycle
where the changes in subsidy regimes, which have come out in more
recent times, mean that they won’t be able to get themselves
sorted out before those subsidies change, and hence they will end
up dropping out of that process.
|
[255]
Alun Ffred Jones: So, the 30 per cent is very indefinite,
then.
|
[256]
Mr Turvey: It is, yes. It’s probably on the high side
in terms of the amount that we’ll—
|
[257]
Julie Morgan: I just wanted to put that on the record
because I thought it was a very optimistic sort of—.
|
[258]
Alun Ffred Jones: Sorry—on this point, Jeff?
|
[259]
Jeff Cuthbert: Yes, I just want clarity. I want to make sure
that I heard you correctly. In terms of that table that Jenny
referred to, on page 2, I think I make the same assumption that,
under the heading of ‘Connected’, it’s 37 per
cent—I haven’t added up the figures, but I’ll
take your word for it—of the total generation, but in fact,
in terms of what is actually connected, it’s only 7 per cent.
That’s right, is it?
|
[260]
Mr Turvey: Yes, in terms of energy, there’s a
difference. [Interruption.] Sorry—. The difference
here is between the capacity, in other words, what the maximum
output a particular generator could produce and the actual energy
it does produce. Because if you had a solar PV plant with—.
This is all here; it’s in the capacity of mega-volt ampere.
So, if you had 1 MVA of capacity, if it could produce energy the
whole year round, 24/7, then it would produce a huge amount of
energy. The reality is the PV plant only produces maximum energy
during some of the summer periods; overnight, obviously nothing,
and during the winter a much lower amount. So, the amount of energy
you get per capacity is much lower for solar PV than it is for
others. So, in terms of the energy produced, it’s down at the
7 per cent, but the capacity connected will be much higher than
that in percentage terms.
|
[261]
Jeff Cuthbert: Okay. So, all of this is actually connected,
but not necessarily generating that volume of electricity.
|
[262]
Mr Turvey: That’s right, yes.
|
[263]
Jeff Cuthbert: Right. Okay. So, the heading of
‘Connected’ is the right heading, because I—
|
[264]
Mr Turvey: No, no—that is the capacity that is
connected to the network.
|
[265]
Jeff Cuthbert: That’s the capacity, because you said
some of these projects will fail, so that made me think, ‘Ah.
Some of them are not actually up and running yet’, but
that’s not the case.
|
[266]
Mr Turvey: No. The ones in that particular column are
actually connected to the network.
|
[267]
Jeff Cuthbert: So, they all exist, but there’s more
that could come on-line.
|
[268]
Mr Turvey: That’s right, yes.
|
[269]
Jeff Cuthbert: Alright.
|
[270]
Alun Ffred Jones: Llyr.
|
[271]
Llyr Gruffydd: I just wanted to ask you whether you could
tell us about any innovative approaches that you’ve adopted
to make it easier for community renewables, for example, to connect
to the grid.
|
[272]
Mr Turvey: I think the main thing we’ve been trying to
do is actually give information, because we actually find that
there’s quite a big information gap for community projects.
They’re being run by extremely enthusiastic groups that are
willing to put huge amounts of their own time into it, but they
lack knowledge; they have huge constraints on their time to
actually achieve these projects. So, they need actually need
information provided to them in a form that they can easily
understand; they can communicate with us easily over it; get away
from all the technical jargon and just find what they need to do;
and what information we really need from them to allow that project
to connect.
|
[273]
We’ve really focused on that. We’ve done that in two
ways. We do hold a number of sessions that have been across WPD,
where we invite community groups to come and talk to us and we give
them a few examples of what needs to be done. We also worked with a
company that is based in the south-west—Regen SW. They have a
big network of contacts with community groups and they helped us
develop a guide for community groups, which is on our website; we
distribute it as widely as we can, and we are working with the rest
of the distribution industry to try and turn that into a national
document, so that it’s available to all to help explain the
process that community groups need to go through to get connected
to the grid.
|
[274]
Alun Ffred Jones: Mr Stewart, could you respond to that
question as well about your attitude towards community groups?
|
[275]
Mr Stewart: Yes. Two points I would come back to: from a
technology—. I’ll pick up on the first point you made:
do we look at technology? Yes, we do. I have a team of 10 people
focusing on the Manweb area looking at what technology we can bring
on-stream to help facilitate more capacity on the network. I can
give you some particular examples. We have been able to push more
megawatts down the line in north Wales, which is our 132 kV line,
and we were able to bring some technology on. Where you get wind,
it actually helps you to reduce the heat of the conductors, so what
we’re able to do is put some monitoring on that line, which
is able, then, when it does get windy, which, actually, is then
when the turbines are going to turn, to push more megawatts down
that line, which is about 20 MW. So, that is an example of what you
look at, and as part of the Iberdrola group, we will go right
around the world to see what technology—. I’ve got
numerous examples, but I think that is a typical example that we
do.
|
[276]
When we talk about communities, in the Clwyd valley, we do look at
whether we can bring communities together. Because you may have
certain constituents of yours who are our customers, who may be
coming on one at a time, and we will go into the community and
actually try and bring all of what they want to do together and
then group that, and it will become more economical for them and
assist them with that. So, that’s one example that we have
done, and what we’ve also been looking at from an innovator
perspective is—we call it quote plus, and I’ll explain
what that is, because, sometimes, we don’t have enough
capacity for, maybe, what the local developer wants. I look at it
like if you were buying a house off a site plan. So, if you went to
buy a house, you’d get a cost for a house with no garage. So,
we can give them that cost, we’ll give them a cost for a
house plus a double garage, that’s maybe what they want, but
we, maybe, can do it more economically without giving them a
garage, and we, maybe, give them a triple garage. So, we will give
them three costs, rather than just one cost, which allows us to get
through that process a wee bit quicker. It allows them to do their
business case and their economics.
|
[277]
Jenny Rathbone: So, what opportunities are there, in areas
where you say you haven’t got capacity, or you’re at
peak capacity, for local producers to then be selling direct to
local consumers?
|
[278]
Mr Stewart: Can I wind back, first, and I’ll come back
to that? My demand from my customers in Wales is about 800 MW, so
that’s the peak demand that we’ve got to be able to
cater for. How much have I got connected? It’s 700 MW. So,
it’s a pretty high number we have in Wales. So, we, over the
last 10 years, have been dealing with these issues. I’ve got
700 MW connected, against the maximum demand of 800 MW. I’ve
also got another 700 MW on top of that—700 MW contracted. So,
we are getting to the point where we’ve actually got more
generation, between what I’ve got connected and contracted
than what I actually require in north Wales. That doesn’t
include what I’ve also got in the pipeline of enquiries
coming through.
|
[279]
So, we have pushed the network at the lower voltages to where we
don’t have a lot of capacity left. If I had to look at it in
Wales, in mid Wales, I’ve got very limited capacity, in the
north-east, I have some capacity, and in the north-west of Wales,
in my area, I’ve got limited capacity.
|
[280]
Alun Ffred Jones: So, all that means that it’s very
difficult and expensive to connect any local schemes, be they
private or community schemes.
|
[281]
Mr Stewart: What I would say is what we do, and I think
you’ll see, we have what we call heat maps, and
that’s—
|
[282]
Alun Ffred Jones: Do we have a copy of that? Have you
provided us—?
|
[283]
Mr Stewart: I didn’t, but what I’ll do
is—. I could provide you a copy—
|
[284]
Alun Ffred Jones: Please do, yes, we’d very grateful
for that. Thank you.
|
[285]
Mr Stewart: It’s a very simple red-amber-green
scenario. We provide these within our local areas, and that allows
customers who want to connect to say, ‘Well, where is the
best place to connect?’ So, where it’s green, we have
capacity; where it’s amber, there is some; and where
it’s red, we need to do some work to create some capacity.
So, we do that. We also have—within our organisation,
we’ve recently gone to being a more geographic organisation,
where we’re connecting a lot better now in the communities.
So, we can do that. But, over and above that, there is investment
needed over the next eight years, and we’ve just entered
our—
|
[286]
Alun Ffred Jones: Can we come back to investment, as I think
it’s an issue we—well, I’d like to ask both of
you, but I think there may be other relevant questions? Have you
finished, Llyr, on your point? William, and then Mick, and then
Russell.
|
[287]
William Powell: Diolch, Gadeirydd. I wanted to ask you
abound the issue of resilience of the distribution network. What
other particular constraints apply in terms of the resilience of
the network that apply to both of your companies?
|
[288]
Mr Turvey: In terms of resilience, probably over the last 20
years, we’ve done a huge amount of work improving the
resilience of the network. That goes from better tree management
through to our maintenance regimes, in terms of how we look at our
lines, and if I actually look at, if you like, the performance of
the network in south Wales, back in the early 1990s, the average
customer would see a loss of supply of about 212 minutes per annum.
Last year, they would see an average loss of supply of 36 minutes.
So, there’s been a huge change in both the internal culture
in terms of how we approach problems, when problems occur on the
network, or when we have faults in terms of our response times, the
equipment we use and the amount of investment we’ve put in,
both in vegetation management, to make sure trees don’t grow
into lines, and also the maintenance of those lines, in ensuring
they are as resilient as they can be. All I can really say is that
the performance you see in south Wales is as good as, if not
slightly better at times, than what people see in central London,
and yet we have a very rural network in south Wales compared to
what’s in central London.
|
11:30
|
[289]
Alun Ffred Jones: Thank you. I’m not trying to stop
you. Our interests lie elsewhere, but I suppose, Stephen,
you’d like to say how wonderful you are as well in north
Wales. [Laughter.]
|
[290]
Mr Stewart: Without a doubt. But I think when you talk about
resilience, I always look at storms. That’s when customers
really want their power to stay on. Nobody wants their power to go
off. The stats that we have over a 15-year period, we have invested
heavily to ensure that we do the best we can for our customers.
Some stats I could give you: between a storm in 1998 and the spring
of 2013, when we did see a big storm in Wales, we were able to
compare investment between two comparable storms over that 15-year
period, and on the high voltage network we saw a 50 per cent
reduction between the two storms. So, with the storm 15 years
later, we reduced what we’d have seen 15 years before by 50
per cent, and on the low voltage, which is into the villages, there
was an 84 per cent reduction. So, the investment that we are
doing—we are building heavier lines, tree cutting, and
putting new technology on—has worked, and we know it’s
worked.
|
[291]
But to give you another example of resilience, in the spring of
2013 we were able to use one of the windfarms in north Wales,
between Connah’s Quay and Bangor, where we actually had some
problems with the transmission line that was going north, and we
were able to use the capacity that was able to be generated from
one of the windfarms to keep us going until we actually managed to
get the circuits back in. It was luck, because the wind was
blowing, but we got the circuit back in, and we only had an hour to
spare. The wind then died. There are examples there of when wind
generation can actually help, but the wind needs to blow to help,
and you can’t rely on it all the time.
|
[292]
Alun Ffred Jones: William.
|
[293]
William Powell: To what extent has undergrounding played a
part in the resilience strategy? I know that it’s obviously
used in terms of mitigation in landscape situations, but does it
play a part also in resilience building?
|
[294]
Mr Stewart: It certainly does. It has its place. It’s
not the answer—it’s not the complete answer, but where
it’s appropriate, yes. But we have found that, if you build
an overhead line to the right standard, with the mitigation around
it—where you have no vegetation—you can get the same
performance from that as you can get from an underground
network.
|
[295]
Alun Ffred Jones: I want to emphasise that this session is
not about how tough and reliable the service from these two
wonderful corporations is. We are looking at the future, and a
smarter future in terms of energy consumption. Mick.
|
[296]
Mick Antoniw: I have a very short question on this
unfulfilled capacity point. Presumably it’s part of your
future planning, future work, et cetera. Do you do some sort of
evaluation as to why there is that amount of unfulfilled capacity?
Do you have any sort of formal evaluation process as to why that is
happening, or is it basically just experience and anecdotal
evidence? Is there anything that would benefit us, to be able to
evaluate why there is such an amount of unfulfilled capacity?
|
[297]
Mr Turvey: Oh, I see—in terms of connected distributor
generation. It’s very difficult for us in terms of seeing
what’s happening in the market. It’s very much driven
by subsidy regimes, the renewable market at the moment. We do see
it come in—this is the best way to describe it—waves of
activity as different subsidy regimes are brought in, or are
announced that they’re going to close. We very much saw a
huge explosion in the amount of photovoltaic that’s been
coming on to the network, and that’s almost beginning to tail
off. There’s a slight hiatus at the moment, which is really a
subsidy issue. Whether that will come back, we’re not
entirely sure. There are certainly reductions in the technology in
that area, and we’re certainly hearing from some of the
developers that very large-scale photovoltaic may well be at grid
parity already. So we may yet see a continuation of that trend in
the connection of those plants despite the change in some of the
subsidy regimes.
|
[298]
Alun Ffred Jones: Okay. Russell, you indicated.
|
[299]
Russell George: I wanted to just ask how you facilitate
perhaps smaller energy project groups in one area coming together,
because they might not know about each other’s schemes. You
might have projects of different energy types, and they’re
not talking to each other, because they don’t know about each
other, as opposed to a larger development where it might be the
same company that’s got two different projects, or competing
companies that are talking to each other to facilitate speaking to
you directly to reduce their costs. But how do you facilitate those
smaller groups? Do you facilitate them? Do you help to support them
in speaking to each other?
|
[300]
Mr Turvey: There are two things we have tried to
do—and I have to say that it has had limited success. One of
the problems we actually have is confidentiality of information
that’s given to us.
|
[301]
Russell George: That’s what I was thinking about.
|
[302]
Mr Turvey: So, if someone enquires about connecting to our
network, we can’t pass their details out to anyone else
interested in working with this group. That is covered by
confidentiality. What we have done is we’ve put a facility on
our network, where people who are interested in saying,
‘I’m trying to build a project in this area, is there
anyone else who would like to collaborate in terms of the potential
network upgrade that is needed’, then we’re happy to
publish that information on our website for them, to allow them to
get visibility. So, that’s one aspect that we’re trying
to tackle it with.
|
[303]
The other aspect—and this, perhaps, has been more prevalent
in the south-west than it has in south Wales—is Regen SW
actually have produced what they call their grid collaboration
service, and they try and act as a broker. You often find that
these organisations are willing to talk to their almost trade-type
associations more, and they’re trying to act as a broker,
seeing if there are groups that can come together, and then
approach us with that group, to say, ‘Is there something you
can do to help this group together?’
|
[304]
Alun Ffred Jones: Can I interrupt there—and I’ll
come back to you now? Mr Stewart, you said that you had actually
brought these groups together in Dyffryn Clwyd; how are you able to
do that without breaking this confidentiality clause?
|
[305]
Mr Stewart: What we did was that we did it under our
initiative. We did it similarly to what we’ve done with
Energy Island on Anglesey, where there is an initiative that is a
Government initiative, so we’re able to get around that, and
they’re able to collaborate on Energy Island; they bring that
together for us, and we can then respond to that. We’ve done
something similar in the Clwyd valley. That’s how we’ve
got around that.
|
[306]
Alun Ffred Jones: Thank you. Sorry, Russell.
|
[307]
Russell George: A similar question, but do you have a
similar structure on your website that you can point projects to as
well?
|
[308]
Mr Stewart: Yes. I think we’ve got a similar set-up.
We’ve got these initiatives going, but also I think what we
have done over the last 12 months is we’ve restructured, and
we’ve actually got more of a focus into the communities.
We’ve now come up with two new districts within Wales and,
within that, we do open sessions in the communities and we do what
we call ‘connection’, open days, once a quarter, where
the community can come along to our office and discuss any issues
they have face to face.
|
[309]
Russell George: And I suppose if a community—. Often,
some of these community projects go through a process and
they’re not viable in the end and they fall, unfortunately,
but if that is the case, then that obviously may then have a
knock-on effect on another project, if they’re potentially
working together to reduce those costs. How do you accommodate
that, if you can?
|
[310]
Mr Stewart: We would always look at how we can do that. I
think part of it is to go around a co-quote plus, where we try to
give some options, but that’s inevitable. If you have a group
of generators and one falls out, hopefully it wouldn’t be
material enough to stop the project, but those costs would need to
be shared in the infrastructure costs, reinforcement costs that
might be incurred. They’d need to be shared, then, with the
remainder.
|
[311]
Alun Ffred Jones: Jeff Cuthbert.
|
[312]
Jeff Cuthbert: If I may, with your permission, Chair, you
made the point that we’re talking about the future; can I
move to a different—?
|
[313]
Alun Ffred Jones: Unless there’s somebody else on this
point. Okay, go on.
|
[314]
Jeff Cuthbert: All right. Returning to your table, under
‘Generation Type’, you list there, amongst the number
that you have, hydro, tidal and wave power. Now, you’ll be
aware, I’m sure, that there’s major consideration being
given to generating electricity through tidal power. There’s
the Swansea bay lagoon that’s proposed, which could well lead
to further tidal lagoons at Cardiff and Newport, and you mentioned
Energy Island, and there’s a lot of work being done, maybe
jointly with the Irish Government, in terms of exploiting the Irish
sea for tidal power. How well equipped are you two as companies to
deal with, perhaps, a significant increase of electricity generated
by tidal power?
|
[315]
Mr Turvey: In terms of the projects that are going on
associated with the Severn estuary and the tidal lagoons and
barrage projects in that area, the vast majority of those are of a
size that they will actually be connecting to the national grid,
rather than to our network. So, we haven’t had a lot of
contact with those organisations. We do actually have contact with
smaller groups that are looking particularly at demonstration
projects, or some of the tidal flow projects.
|
[316]
In terms of the onshore works, we are equipped to deal with the
connection works associated with that. The amount of energy will
depend really on the constraints we have on the network: the
network constraints apply equally to bringing it in from a wave
resource as they do from a wind resource or a solar resource.
|
[317]
Jeff Cuthbert: So, perhaps my question is better directed to
National Grid.
|
[318]
Mr Turvey: If you’re talking about the major lagoon
projects, I think it probably is, but, certainly, we have had some
experience of marine projects trying to connect to the network. I
don’t think that connection to the network has been the major
issue for them. I think some of the technology issues associated
with those marine projects have been more of a challenge for
them.
|
[319]
Alun Ffred Jones: Jenny Rathbone.
|
[320]
Jenny Rathbone: I want to come back to the—. I think
one of the things we’re going to need, if it’s possible
to give us, is a map of what type of energy is being used at any
different time of the year. So, in the summer there’ll be a
lot more photovoltaics, in the winter less. The map you’ve
given us is just capacity, rather than actual usage.
|
[321]
Mr Turvey: Yes. We can certainly produce—
|
[322]
Jenny Rathbone: On a monthly basis, or something.
|
[323]
Mr Turvey: Yes. We can produce some charts that show the
amount of output you see at different months from different
technology types.
|
[324]
Jenny Rathbone: That would be really useful. I suppose the
other thing I really want to understand is how many independent
distribution network operators are operating within your designated
areas.
|
[325]
Mr Turvey: I don’t have the precise number to hand,
but we certainly have quite a lot of IDNO activity. It’s
mainly by about two large companies that own—
|
[326]
Jenny Rathbone: What are they called?
|
[327]
Mr Turvey: Sorry?
|
[328]
Jenny Rathbone: What are they called?
|
[329]
Mr Turvey: One is under the parent group of GTC, and the
other one is Energetics, and they’re probably the major IDNO
providers. There are also, in this whole area of competition in
network provision, a very large number of what are called
‘independent connection providers’. The difference
between the two is that an IDNO actually builds a network, which is
connected to ours, and then continues to own and operate it long
term; whereas what an ICP does is it helps with the construction of
that network to start with, and then we adopt it for its long-term
operation and maintenance.
|
[330]
Jenny Rathbone: Okay, so sticking with the IDNO model, is
that the sort of model that could be developed by
municipalities?
|
[331]
Mr Turvey: Yes, I see no reason—. Certainly, when the
Olympic Games came to London, I’m aware that there was a
separate IDNO company and licence applied for to manage the network
within the Olympic village, and that was actually done as an IDNO
network at the time.
|
[332]
Jenny Rathbone: Okay, but if municipalities wanted to become
generators of electricity, they’d be able to set up their own
IDNO, which would be—
|
[333]
Mr Turvey: I’m not aware of any restriction that would
stop them—
|
[334]
Jenny Rathbone: Okay, that’s very useful.
|
[335]
Mr Turvey: But, that’s probably more of a question for
Ofgem—they’re the licensing authority that could
actually grant the licences.
|
[336]
Jenny Rathbone: Okay, so the reason that GTC and Energetics
are connecting with you is because they want to have the comfort of
extra generation were they to require it.
|
[337]
Mr Turvey: No; the vast majority of IDNO networks are just
to connect either new housing estates or new business estates. So,
most of them are actually demand projects; very few of them have
generation on them, in terms of IDNO networks.
|
[338]
Jenny Rathbone: Okay, but there’s nothing, as far as
you’re aware, in the regulations that wouldn’t permit
them to be both.
|
[339]
Mr Turvey: No, there isn’t.
|
[340]
Alun Ffred Jones: Llyr.
|
[341]
Llyr Gruffydd: One of the big bottlenecks, as we know, is
that community renewable projects can’t get connections
because it’s extortionate to build. But, the capacity issue,
I think, is an important one because what we have at the moment is
a situation where, potentially, maybe two large energy companies
have bagged the capacity in terms of committed capacity, which
means that a very modest community project can’t get that
space on the network, unless of course they end up paying for
it.
|
11:45
|
[342]
Now, I’m just wondering, to what extent—and you may not
want to comment—there’s an element of speculative
seeking of commitments around the capacity. You could have larger
companies thinking that, ‘Longer term, we may want to do
something here, but if we allow others to get in, and get that
capacity, then obviously it won’t be there for us’.
I’d imagine that being a danger. Do you have ways of guarding
against that kind of practice?
|
[343]
Mr Turvey: It’s not just a danger. There is definitely
a degree of speculative activity out there. You often find that
even some of the larger companies may not have the finance to
develop more than one or two projects, but will apply for several
because they’re trying to understand which one works best for
them. There are several things we’ve attempted to do. This
comes down to how you manage that process and how you try to
establish which ones are speculative applications as early as
possible. One of the things we introduced, nearly a couple of years
ago now, was that we actually put milestones in the connection
offers that we give to people, so that they have a certain period
of time to get their planning consent sorted, then they need to
start construction works and actually complete. And, if they fail
to meet those milestones, we have the ability to withdraw that
contract from them and actually release that capacity to others.
So, we’ve tried to introduce that to try and say,
‘Well, we can’t stop people making a speculative
application, but we can time-limit how long they hold on to it
for.’
|
[344]
Llyr Gruffydd: And are those milestones and criteria
different for large energy projects, compared to maybe smaller
community renewable schemes?
|
[345]
Mr Turvey: No, we actually apply the same milestones to
all project types. The only ones we do extend slightly longer
timescales to are very large projects connecting to the very high
voltages, because they do take longer to get the system sorted out
and planning and such like. So, they end up with slightly longer
milestones in their offers than the smaller projects do, but all
small projects, whoever they are, whether they’re commercial
developers or community projects, have the same milestones.
|
[346]
Llyr Gruffydd: One clear proposal or ask that’s been
regularly raised obviously in this context is that renewables,
and/or community renewables particularly, are given priority access
in that kind of situation. If the rules were changed to allow that
to happen, is that something that you could quite easily adopt in
terms of your practices?
|
[347]
Mr Turvey: Provided there’s a clear definition of what
a community project is, so that we could identify that, then, yes,
there’s no problem at all in being able to prioritise, where
capacity is available, who it gets allocated to first.
|
[348]
Alun Ffred Jones: Can I play devil’s advocate? Your
companies actually sell electricity; that’s your core
business.
|
[349]
Mr Turvey: No, we don’t. Western Power owns the
distribution network; we actually manage the asset. We don’t
buy or sell energy at all, nor generate it.
|
[350]
Alun Ffred Jones: But you do sell electricity and you
produce electricity.
|
[351]
Mr Stewart: The Scottish Power group is part of Iberdrola
Group; that is correct. My division is segregated from the retail
business, which is a separate division and does generate and
supply. I’m a segregated business through the regulation, and
all I do is similar to what has been described by Nigel.
|
[352]
Alun Ffred Jones: You may be segregated in the same way that
BT is segregated from Outreach, but, basically, you’re part
of the same group, and that’s what you do: you produce
electricity; you sell it; and you distribute it as well, along the
networks.
|
[353]
Mr Stewart: The Scottish Power group do that, but my direct
responsibilities are—
|
[354]
Alun Ffred Jones: I’m not accusing of you of anything
now. [Laughter.] Surely, selling less electricity is against
the interest of your group, and allowing local schemes to produce
electricity is also against the interest of Scottish Power, and all
the other major—
|
[355]
Mr Stewart: No, I would say the opposite. We’ve got a
duty of care as part of the regulatory environment to protect
current customers and future customers, and I am scrutinised by my
regulator for every pound I spend: that it’s the most
efficient pound for both the current customers and future
customers. And that is our focus.
|
[356]
Alun Ffred Jones: I’m sure you do your work diligently
and honestly, with honour, and effectively. All I’m saying is
that in terms of Scottish Power as a company, selling less
electricity is not a good idea, and certainly getting other
producers in, be they local or whatever, is surely also against
their interest, no?
|
[357]
Mr Stewart: Today, I’m here to talk about the
infrastructure and renewables and, in part, my role is to make sure
that I, as I said, provide the best cost and the most efficient
cost for my current customers and my future customers. We do not
take that part you’ve said into any of our considerations and
any of the plans that we do.
|
[358]
Alun Ffred Jones: But in terms of the distribution of
electricity, does the fact that you have potentially—. You do
have large numbers of individual households producing electricity
from photovoltaics, and indeed local private companies or community
companies also producing some electricity and feeding it into the
network. Doesn’t that actually make life difficult for
you?
|
[359]
Mr Stewart: No, it doesn’t, and I think we should go
back, as there are just a couple of statistics I’ll give you
there. As I said at the start, I’ve got 800 MW of demand and
we’ve got 700 MW on through distribution generation so
far—that’s how much I’ve got connected, so
that’s a very high percentage—plus another 700 MW ready
to come on contracted, plus on top of that what’s also in the
pipeline.
|
[360]
Alun Ffred Jones: Can you explain that in simpler terms to
lay people like us? Say that again. You’ve got 800—
|
[361]
Mr Stewart: The maximum demand, so the coldest night I may
have, I need 800 MW in my part of Wales. For the windfarm, solar
and whatever else I’ve got connected—and this is
outwith the large windfarms, and I’ll talk about numbers in a
minute—I’ve got 700 MW connected. So, I’ve got
700 MW divided by 800 MW, which is probably 80 per cent. So, 80 per
cent—
|
[362]
Mr Simpson: Of clean energy?
|
[363]
Mr Stewart: Of clean energy that I can connect. It’s a
very good success story—it’s a good news story for
north Wales and it’s what we’ve been able to do over
the last 10 years. But also on top of that 700 MW, I’ve got
another 700 MW commercially contracted—okay, we’re
still to get planning permission, but we are obliged to provide
that and we’ve got plans in place to do that. But, also, on
top of that 700 MW plus 700 MW, I’ve got a pipeline of
activity coming in. But, if you look at the number of generators,
to respond to that question—and these are large generators,
which are over a 1 MW—I’ve got 127. So, I’ve got
a number of large generators, but I’ve got tens of thousands
of small generators, because you’ve got to think of my
444,000 customers—every one of those customers can be a
generator and I’ve got tens of thousands of those. We see
applications coming in—. Around 2009, there were about 900
applications over the year; we are now seeing 14,000 a year. So,
we’ve gone from probably about 18 a week to probably 300 a
week just now. So, we’re dealing with it and we’re not
restricting it. So, we actually welcome it.
|
[364]
Alun Ffred Jones: Is it the same happy story in south
Wales?
|
[365]
Mr Turvey: Yes. Perhaps I can just say a little bit about
incentives. There was obviously a concern about whether there was
an incentive for us about where energy comes from. In terms of the
way we get our income—the decision on how much money
we’re allowed to recover—that is not driven by the
amount of energy going over the network. What happens in the
process is that Ofgem look at our business plan and say how much
investment we need to make and how much it’s going to cost to
operate the network. They go through a fairly tough process of
challenging that and getting that down to the lowest number they
believe is practicable. Then they say, ‘Well, okay, you can
recover that amount of money’, and that is delinked from the
amount of the energy going over the network. So, we have no
incentive to either have more energy going over the network or less
energy going over the network. Our incentive is to invest as
efficiently as we can and to be able to demonstrate that to the
regulator: that the investments we’ve made have been
appropriate and well used. So, that’s really where the
incentive comes from.
|
[366]
Alun Ffred Jones: Are you purely a distributive company?
|
[367]
Mr Turvey: Sorry?
|
[368]
Alun Ffred Jones: Are you purely a distribute company?
|
[369]
Mr Turvey: We are, yes. We own the networks in south Wales,
the south-west, and the east and the west midlands.
|
[370]
Alun Ffred Jones: Alan, did you want to come in?
|
[371]
Mr Simpson: Yes. So, are you saying that, if, for instance,
Ofgem were to say to Wales, ‘Either we will change the
regulatory framework or Wales could have its own Ofgem’, and
that it set annual carbon reduction targets or demanded reduction
targets, in the same way as they have in parts of the USA, you
would be completely comfortable within that sort of framework,
because your whole business model is not dependent on energy
sales?
|
[372]
Mr Turvey: That’s right, yes. The business model
wouldn’t cause us a concern. Clearly, the degree of targets
and the achievability of them might, but the actual model of having
that concept of being regulated in that way wouldn’t cause us
a concern.
|
[373]
Mr Simpson: Stephen, is that the same for you?
|
[374]
Mr Stewart: I would leave you experts to find the regulatory
models we’d operate in Wales.
|
[375]
Mr Simpson: But you could—. If that was the decision,
your business model would be able to accommodate that?
|
[376]
Mr Stewart: Our business model would work for what is the
benefit to the customer. How the regulatory framework would work in
Wales as compared to England and Scotland I think we would leave to
your good selves.
|
[377]
Mr Simpson: Okay. There are two other, more specific
questions. Across the EU at the moment, there are a reported 6,400
smart cities initiatives. Where would you point to examples in
Wales that the committee should look to to draw some of the lessons
that have been learnt about what smart cities would look like
here?
|
[378]
Mr Turvey: I think it’s quite difficult to actually
define a smart city, because, whilst the energy network is clearly
an integral part of that in terms of how you properly integrate the
generation sources that are available within cities, or close to
cities, with the usage of energy, the smart city concept really
goes right into the transport system, the public transport system,
and how to integrate the whole lot together. So, I think, as a
distributor, we have, certainly, a strong role to play in that, in
terms of being able to work with the city to understand what
development is needed of the electricity network to facilitate what
they’re trying to achieve, but I don’t think
we’re central to leading that process, because I think there
are so many inputs to it.
|
[379]
Mr Stewart: From my perspective, or our perspective, on
smart cities, we have two smart cities within my division. One is
within my area, which is Liverpool, and the other one’s in
Scotland, called Glasgow. So, they are the two smart cities. We did
offer up six, and we got two. There are another two on top of that
that we would have wanted, which would have been, in the Wales
area, the Deeside area and Anglesey, and they weren’t
accepted. But I think, from my perspective, something like Wrexham
and Bangor would be appropriate in my area, because I think we can
do some learning, particularly in Liverpool where we’ve
worked very closely with the council on things like electric
vehicles and taxis—very simple, but very smart—and I
think we could adopt that type of technology in initiatives that we
are seeing across—.
|
[380]
Mr Simpson: The European Commissioner has just recently said
that they’re completely rethinking, or redesigning, the smart
cities initiative. I was just struck by the quote from the
commissioner, which says, if I can just pitch into
it—I’m sorry; that’ll teach me to tap on the
board at the wrong time—that they—. I’ll find it.
The problem is that the existing grid infrastructure is completely
‘malconfigured’, because it doesn’t connect to
the delivery of integrated services—transport, domestic
consumption, industrial and commercial, fibre optics to manage and
balance—and that is the shape of the future that the European
Commission is going to be prioritising. Now, that may suit what you
were saying in terms of where it was possible for that to develop
in Wales, but I just want to know, if this is where the EU
Commission’s thinking is going, and the European smart cities
movement is moving there, where would the committee look in Wales
to find examples of that happening here and now?
|
[381]
Mr Stewart: I’m not familiar with the report, but I
don’t think we have, in my opinion, a smart city in my area.
I think we’ve got some very good examples on the Energy
Island. I think that’s a very good initiative and I think
it’s one area that we should look at, but, a smart
city—I don’t see it. We have got smart metering, which
we’re about to roll out, which starts next year and
that’ll be quite an aggressive programme for four years. But
what I’m picking up from what you’re saying, without
knowing the detail of the report, I don’t see anything like
that going on in my area within Wales.
|
12:00
|
[382]
Mr Simpson: Can I just give you the quote from the
Commission? It says
|
[383]
‘Currently, all urban infrastructure including water,
electricity, gas, waste, transportation, heating, and others have
been built independently of one another. But to achieve real
efficiency gains and make our cities more sustainable, we need to
connect them so that they complement each other. Integrating and
linking up energy, transport, water, waste, and ICT will create
environmental and social impacts through resource efficiency,
better air quality, better waste management, development of new
skills in the population and other benefits.’
|
[384]
What I don’t understand is, if that’s the intellectual
framework that the EU Commission sees the future being shaped
around, and there are 6,400 cities across Europe that, in one way
or another, are already some way down that path, why are we not
able to identify any towns or cities of any scale across the whole
of Wales as part of that game? It seems to me that you, as the
neutral holders of the system, if you’re not dependent on
catering for the producer needs of the power stations, why are you
not able to sit here in front of us and say, ‘Now you need to
look at this, and we’ll be doing that, and here’s our
partnerships here’, so that Wales is part of the game, and is
not left-over after it?
|
[385]
Mr Turvey: I think what is happening is parts of that are
being developed—the elements like demand-side response, which
is part of that process, in terms of how you integrate energy usage
in a city with what is able to be provided to it easily. So, there
are lots of trials and processes going on, trying to develop that
demand-side response process. I think we are behind in some
respects, compared to some parts of Europe where they’ve
moved forward quicker on this. But I think we are beginning to
catch up in terms of the fact there are a lot of projects ongoing,
looking at that demand-side response, or working with local
authorities in terms of how we can actually better integrate the
information we have with what they’re trying to achieve. But,
I think, as that quote highlighted, it’s not just
electricity, it is also all the other services. So, unfortunately,
I do think the city authorities themselves are going to have quite
a lead role in actually changing themselves into a smart city.
|
[386]
Alun Ffred Jones: Mr Stewart, you mentioned that Liverpool
designated itself as a smart city?
|
[387]
Mr Stewart: No, you were asked to submit a plan as part of
it, and it was selected as part of the regulatory framework. So,
Liverpool was selected as a smart city.
|
[388]
Alun Ffred Jones: Can you give us an example of what is
going on there? You mentioned taxis.
|
[389]
Mr Stewart: The best one I can give you is the taxis one,
where we have been able to help and assist to get the demand in
electric vehicles et cetera. But, there’s a lot more going on
and I can give you further details. We can send you those.
|
[390]
Alun Ffred Jones: It could be useful to know what’s
going on as an example. Jenny.
|
[391]
Jenny Rathbone: Who did you actually submit it too? Was it
to the Department of Energy and Climate Change or Ofgem or
to—?
|
[392]
Mr Stewart: My belief was that it was to Ofgem, but can I
come back and give you clarity around that?
|
[393]
Jenny Rathbone: Because I suppose what would be really
interesting would be to know on what basis the other two in north
Wales were turned down and why it would appear that Western Power
Distribution didn’t submit any. You didn’t apply at
all.
|
[394]
Mr Turvey: I think we helped support bids for both Cardiff
and Bristol, but a large part of that was support. Bristol, I
think, is moving forward in the smart city area.
|
[395]
Jenny Rathbone: But, Cardiff, at the moment, is—
|
[396]
Alun Ffred Jones: If you have any information about Bristol
and what’s happening from your point of view, it would be
useful for us, just to get the feel of what is achievable and what
you are trying to achieve. At least it would give us an indication.
Janet.
|
[397]
Janet Haworth: You mentioned the relationship with
municipalities, local government, county councils, and so on. What
do you think is needed to drive that relationship forward?
You’ve described yourselves as one of the partners in that.
Who else needs to get involved, do you think?
|
[398]
Mr Turvey: Well, I think there’s a very large element
of—. There are going to need to be a lot of communication
systems put in to actually make smart cities happen. It’s not
just electricity networks. It’s also communication networks.
If you’re going to manage a city in terms of demand-side
response, or in terms of vehicle charging for electric vehicles,
you actually need to understand what’s going on at these
various points in the network.
|
[399]
Janet Haworth: Yes.
|
[400]
Mr Turvey: So, fully integrating the communications network
with that is a very key one as well.
|
[401]
Janet Haworth: That’s an interesting challenge,
isn’t it?
|
[402]
Mr Turvey: Yes. Some of that can be done by some of the
other telecoms providers, and some of it will inevitably be the BT
Openreach-type solutions.
|
[403]
Janet Haworth: So, the BT Openreach telecom providers.
|
[404]
Mr Turvey: Yes.
|
[405]
Janet Haworth: There seems to be a bit of a battle going on
at the moment between the delivery of IT systems through
fibre-optic cables directly to the person who needs it, or whether
that delivery comes via a copper cable, or whether that cable is
providing what they call the synchronisation of up-and-down data.
When we experience these failures in our computers, which you
wouldn’t want if you were delivering integrated services,
would you—?
|
[406]
Mr Turvey: No.
|
[407]
Janet Haworth: You would not want this to happen. Are you
saying we would need to ensure that we were using the most
up-to-date technology—you know, fibre-optic cable,
futureproofed, and none of this copper stuff?
|
[408]
Mr Turvey: Well, I think it depends on how you design the
system. It’s the degree of redundancy you have to build in.
The more concerned you are about the reliability of communication
networks, the more redundancy you have to build in, or the more
resource you have to put in at one end or the other to make sure
that it will cope with temporary loss of communication. So,
it’s really that balance as to the cost of getting that
communication system in and the reliability of it, against the cost
of holding that redundancy in the system.
|
[409]
Janet Haworth: What sort of megabytes do you think is needed
on a system that’s serving that sort of smart city?
|
[410]
Mr Turvey: It certainly isn’t my area of expertise;
I’m heavy power engineering. We can probably try and get some
information on that point.
|
[411]
Janet Haworth: It would be interesting to find out
Liverpool’s thinking on this, because what I would suggest is
that there will be a figure. Some people are labouring with 10 and
20 megabytes, but it might be that you need a lot more.
|
[412]
Alun Ffred Jones: Right. Thank you for that. I’m just
trying to wrap things up quickly. Julie, you had a question, and
then Mick.
|
[413]
Julie Morgan: Just very quickly, you said you thought
Bristol was moving ahead, but by implication, Cardiff was not
moving ahead. Could you just expand on that?
|
[414]
Mr Turvey: Sorry; yes. I’m not clear on the position
with Cardiff at the moment. I know they had quite advanced plans in
terms of moving ahead with some smart city initiatives. I’m
not clear on where they’ve got to at the present time.
|
[415]
Julie Morgan: Right. So, you just don’t know about
Cardiff.
|
[416]
Mr Turvey: That’s right, yes.
|
[417]
Julie Morgan: Thank you.
|
[418]
Alun Ffred Jones: Mick.
|
[419]
Mick Antoniw: Birmingham is one of the lead players within
this, isn’t it—within the smart cities and so on? Does
that come within your area?
|
[420]
Mr Turvey: It is within our patch, yes.
|
[421]
Mick Antoniw: So, how are they doing?
|
[422]
Mr Turvey: Again, I don’t actually have any up-to-date
information on that. I do know they are pushing ahead quite hard on
trying to look at the use of combined heat and power and heat
networks within the city. So, there is quite a lot of activity in
what can be done there. I don’t think a huge amount of
investment has actually happened yet in that area, but I know they
are very interested in the whole heat network issues associated
with—
|
[423]
Mick Antoniw: They are being promoted as one of the
UK’s leads in the whole smart cities programme, as part of
the whole European programme. Presumably, you at Western Power
would be fairly clearly involved within that whole programme within
Birmingham?
|
[424]
Mr Turvey: Well, we’re certainly—. Anything to
do with the actual power infrastructure we are certainly involved
with, yes.
|
[425]
Mick Antoniw: But you’re not aware of what it is
they’ve actually—
|
[426]
Mr Turvey: I’m not aware of the actual stage
they’ve got to at the present time, no.
|
[427]
Mick Antoniw: Okay.
|
[428]
Alun Ffred Jones: Okay. Jenny, very quickly.
|
[429]
Jenny Rathbone: When we went to Germany, we went to a
village called Schönau, which has now become a major generator
of renewable energy. Like them, would you be in a position to only
supply renewable energy to customers who requested it?
|
[430]
Mr Turvey: I think the reality of how networks work is: we
can’t guarantee where it’s come from. We can try and
make some estimates. There was a project that we did start to do,
but it got quite difficult to work out, in terms of what’s
called ‘carbon tracing’, whereby you can actually say,
‘Well, in terms of the power being extracted from a certain
part of the network, where has it most likely come from? In other
words, which type of generators?’ It’s actually quite a
complex process to do. We haven’t got very far with it, but I
do understand that’s the sort of thing people are interested
in.
|
[431]
Jenny Rathbone: Okay, but at the moment you’d not be
in a position.
|
[432]
Mr Turvey: No, we wouldn’t be in a position to do
that, no.
|
[433]
Alun Ffred Jones: Can I just ask about rural networks?
I’m familiar with the situation in north Wales where much of
the rural network is old and, not to put too fine a point on it,
pretty decrepit in certain areas. Obviously, some of those areas
are the very areas where the potential for small hydroelectric
schemes are very high. I’m not quite sure whether it’s
quite the same in south-west Wales; I’d imagine perhaps it
is. So, is there any planning going ahead in terms of thinking
about improving those networks in order to facilitate in the
future, or the very near future, some of these schemes? I know
there are some areas where this is a very particular problem.
|
[434]
Mr Stewart: As I said, the performance of the
network—not to go back through that—has improved.
|
[435]
Alun Ffred Jones: No, no, I quite accept that
and—.
|
[436]
Mr Stewart: Okay. Over the next eight years, which is our
regulatory period—. We agree a regulatory period of time with
our regulator, which started on 1 April for the next eight years,
and it’s called ED1. Now, within that, just to facilitate,
not to modernise—so, not to replace old assets, but just to
facilitate increased capacity, we’re going to invest in Wales
about £105 million, in particularly what you’re talking
about, plus another £45 million on higher voltages. So,
we’re roughly into about £150 million just to increase
capacity, which will give me another 100 MW for these rural
locations. So, that will start to come on stream and I can, outwith
this, give you where those particular areas are in the rural part
of Wales.
|
[437]
Alun Ffred Jones: We’ll be very appreciative of any
information outside. Okay. Alan, you had something.
|
[438]
Mr Simpson: Yes, I wanted to try and take this into the
arena of energy storage, because it ties in very clearly with the
question that the Chair has just asked, and that is, for more
isolated communities, really, their solutions are going to have to
be more localised grids that include energy storage for—you
know, a different approach to localised balancing. Now, I know
that, as far as the UK is concerned, Manchester has got a huge
slice of the pie for the creation of a city-wide network of
hydrogen fuel cell storage systems, with anything from 5,000 to
50,000 contributing generators. Can you just point us to work that
you have been doing on energy storage in Wales and how far that
connects to localised grids and may lead us into localised tariffs
as well so that there’s that pooling of benefits? Just give
us some examples of where you’re pushing those boats out.
|
[439]
Mr Turvey: In terms of storage, we don’t have any
projects actually within south Wales. We do have elsewhere within
the company. Over in Milton Keynes we have a very large project,
which has just concluded, which is looking at the management of a
network there. That included the integration of storage within it.
It was very successful in terms of the technology. The ability of
the technology to modify the load shape to actually control
fluctuations in power was excellent. The issue still is the cost of
that storage. The storage cost is still not really economic
compared to expanding the network.
|
[440]
The other area where we’ve looked at storage technologies was
actually right down at the home level, and this was a project that
we’ve done in Bristol, where we actually integrated batteries
into people’s homes. They had solar photovoltaics on their
roof as well. We converted as much of the house as we could to
direct current operation so that they had lighting and access for
their computers and such like. It was all on a DC network. The
concept behind that was to try and reduce the amount of conversion
between DC and alternating current to reduce the losses that are
incurred in that. So, the battery then could help them to modify
the demand they placed on the network. We also placed controllers
in so that we could share the use of that battery to help control
the flows on the network. Again, very successful in terms of,
technically, it works; it can all be made to work. Cost is still
the issue in terms of storage. We are seeing reductions in cost,
but at the present time it’s not really economic as a
commercial investment—
|
12:15
|
[441]
Alun Ffred Jones: Is it the cost of the technology
itself?
|
[442]
Mr Turvey: Yes, and the battery. The battery is the real
high cost at the present time. We’re seeing reductions;
we’ve seen the announcements by companies such as Tesla, and
mass production will start to bring those costs down.
|
[443]
Mr Simpson: Can I just follow that?
|
[444]
Alun Ffred Jones: Yes, go on.
|
[445]
Mr Simpson: I think it would be really helpful for the
committee to get something as just a digest of that company
experience in Bristol. Because, in a way, the question that struck
me that follows is, in a way, you’re in a position like
Toyota must’ve been with the first Prius or Germany with the
first initiatives on PV costs and their feed-in tariffs; the
solution was the creation of a different market. So, what I wanted
to get from you is, in terms of the break-through costings, where
storage starts to become viable, is it possible either for you to
say, or to come back to the committee with an idea of, the scale at
which that would begin to make different economic sense? Because if
people can get a sense of at what scale a village or a town or a
city needs to be to be able to have a storage system that is
developed for a large market, rather than bits and bobs, then that
provides a very different agenda to be playing around with for the
Welsh Government.
|
[446]
Mr Turvey: Okay. I haven’t got that information with
me, but I’ll see what I can provide and come back to you with
that, of course.
|
[447]
Alun Ffred Jones: Lastly, Jeff Cuthbert.
|
[448]
Jeff Cuthbert: It’s on this very point. It’s a
shame it’s come at the end, but it’s sparked a series
of issues. We know technology changes all the time—it gets
better and better—and that will impact upon cost savings,
undoubtedly. So, would you be able to come back to us, as well,
with what work your companies are doing in terms of research and
development to look at the future and ways in which storage, which,
obviously, has implications for solar power, clearly—? What
investment are you putting in in order to improve matters for the
future?
|
[449]
Mr Turvey: Yes. I think all companies have a large future
networks programme where we have a number of projects that are run
under initiatives by our regulator, under a network innovation
allowance and a network innovation competition, whereby we actually
put up proposals that have to meet certain criteria in terms of
value for money for the customer at the end and the learning
that’s going to come out of them. They also have criteria of
disseminating that information widely afterwards, and making any,
if you like, intellectual property rights that are created during
that process available to other people without creating, if you
like, a sole provider of them. So, there are a number of things,
but we can provide detail on that in terms of what we’re
doing.
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[450]
Alun Ffred Jones: At that point, I think I’ll draw
matters to a close. I thank both of you for coming in this morning
and sharing your knowledge and your experience. You have promised
to provide us with some information, so the clerks will be in touch
with you and we look forward to receiving that. You will also
receive a transcript of the proceedings, if you could check that
for accuracy. But, thank you again. Diolch yn fawr iawn.
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[451]
Mr Stewart: Thank you.
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[452]
Mr Turvey: Thank you.
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12:18
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Cynnig o dan Reol Sefydlog 17.42 i
Benderfynu Gwahardd y Cyhoedd o’r Cyfarfod
Motion under Standing Order 17.42 to Resolve to Exclude the Public
from the Meeting
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Cynnig:
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Motion:
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bod y pwyllgor yn penderfynu gwahardd y cyhoedd o weddill y
cyfarfod yn unol â Rheol Sefydlog 17.42(vi).
|
that the committee resolves
to exclude the public from the remainder of the meeting in
accordance with Standing Order 17.42(vi).
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Cynigiwyd y cynnig. Motion moved.
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|
[453]
Alun Ffred Jones: I propose that we go into private session
and we’ll just have a very quick wash up.
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Derbyniwyd
y cynnig.
Motion agreed.
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Daeth rhan gyhoeddus y cyfarfod i ben am
12:18. The public part of the meeting ended at
12:18.
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