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
|
Joyce Watson
|
Llafur
Labour
|
Eraill yn bresennol Others in
attendance
|
Craig Anderson
|
Prif Swyddog Gweithredol, Cymru
Gynnes
Chief Executive Officer, Warm Wales
|
Steve Curry
|
Rheolwr Adfywio Cymunedol, Cymoedd
i'r Arfordir Community Regeneration Manager, Valleys
to Coast
|
Mark Harris
|
Cynghorydd Cynllunio a Pholisi Cymru,
Ffederasiwn yr Adeiladwyr Cartrefi
Planning and Policy Advisor Wales, Home Builders Federation
|
Shea Jones
|
Swyddog Polisi, Cartrefi Cymunedol
Cymru
Policy Officer, Community Housing Cymru
|
Gill Kelleher
|
SPECIFIC, Canolfan Wybodaeth Arloesi,
Prifysgol Abertawe
SPECIFIC, Innovation Knowledge Centre, Swansea University
|
Dr Caroline
Kuzemko
|
Cymrawd Ymchwil, Coleg Gwyddorau
Bywyd ac Amgylcheddol, Prifysgol Caerwysg
Research Fellow, College of Life and Environmental Sciences,
University of Exeter
|
Yr Athro/ Professor Gareth Wyn Jones
|
Athro Anrhydeddus, Ysgol Amgylchedd,
Adnoddau Naturiol a Daearyddiaeth, Prifysgol Bangor
Honorary Professor, School of Environment, Natural Resources and
Geography, Bangor University
|
Swyddogion Cynulliad Cenedlaethol Cymru yn
bresennol National Assembly for Wales officials
in attendance
|
Chloe Corbyn
|
Y Gwasanaeth Ymchwil
Research Service
|
Martha Da Gama Howells
|
Clerc
Clerk
|
Alan Simpson
|
Cynghorydd Arbenigol
Expert Adviser
|
Adam Vaughan
|
Dirprwy Glerc
Deputy Clerk
|
Dechreuodd y cyfarfod am
09:00.
The meeting began at
09:00.
|
Cyflwyniad, Ymddiheuriadau a
Dirprwyon
Introductions, Apologies and Substitutions
|
[1]
Alun Ffred Jones:
Croeso i chi i’r pwyllgor a
jest ychydig o fanylion. Os bydd yna larwm tân, rydych
chi’n gwybod beth i’w wneud. Gofalwch fod eich ffonau
symudol chi ar ‘dawel’. Mae croeso i bawb siarad yn
Gymraeg neu yn Saesneg. A oes unrhyw ddatgan buddiant gan unrhyw
un? Nag oes. Dyna ni. Ac ymddiheuriadau? Dim
ymddiheuriadau.
|
Alun Ffred Jones: Welcome to
you all to this committee meeting and just a few details. If the
fire alarm sounds, you know what to do. Please do ensure that your
mobile phones are on ‘silent’. Everyone is welcome of
course to speak in Welsh or in English. Are there any interests to
declare? No. There we are. Any apologies? No apologies.
|
09:01
|
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
|
Cynnig:
|
Motion:
|
bod y pwyllgor yn penderfynu gwahardd
y cyhoedd o’r cyfarfod ar gyfer eitemau 3, 5 ac 8 yn unol
â Rheol Sefydlog 17.42(vi).
|
that the
committee resolves to exclude the public from the meeting for items
3, 5 and 8 in accordance with Standing Order 17.42(vi).
|
Cynigiwyd y cynnig.
Motion
moved.
|
[2]
Alun Ffred Jones: A gaf gynnig felly ein bod ni’n mynd—?
Rwy’n cynnig o dan Reol Sefydlog 17.42 y dylem benderfynu
gwahardd y cyhoedd o eitem 3. A gaf gynnig? Diolch yn fawr iawn.
Mae hynny hefyd ar gyfer eitemau 5 ac 8. Diolch yn fawr. Pawb yn
gytûn? Reit.
|
Alun Ffred Jones: May I therefore move that we—? I propose a
motion under Standing Order 17.42 that we should resolve to exclude
the public from the meeting for item 3. May I move? Thank you very
much. That was also for items 5 and 8. Thank you very much. Is
everyone agreed? Right.
|
Derbyniwyd y cynnig.
Motion agreed.
|
Daeth rhan gyhoeddus y cyfarfod i ben am
09:01.
The public part of the meeting ended at 09:01.
|
Ailymgynullodd y pwyllgor yn
gyhoeddus am 09:32.
The committee reconvened in public at 09:32.
|
Ymchwiliad i ‘Dyfodol Ynni Callach i
Gymru?’ Inquiry into ‘A Smarter Energy
Future for Wales?’
|
[3]
Alun Ffred Jones: Bore da. Good morning. Welcome to our
committee. Thank you for assisting us in our inquiry into ‘A
Smarter Energy Future for Wales?’ You don’t need to
touch the mikes when you speak. Otherwise, they might explode. No;
that’s just a little joke I make. It’s well worn and
not appreciated, I know. Can I just ask you to introduce yourselves
to begin with, and to state your name and position? Then
we’ll go into questions. Craig? Don’t touch the mike.
The joke didn’t work, obviously. [Laughter.]
|
[4]
Mr Anderson: First introduction. Good morning, everyone.
Bore da. My name’s Craig Anderson. I’m chief executive
officer of Warm Wales, the first community interest company in the
UK dealing with the relief of fuel poverty. It was established in
Wales in 2004. We’ve done £58 million-worth of work
across 60,000 properties both in Wales and the south-west.
We’re the strategic fuel poor partner for Wales and West
Utilities—the gas carrier—dealing with relief of fuel
poverty. My background: I’m an architect planner by
profession, but I’ve worked in five local authorities, in
Scotland, Wales—in Swansea—and in England, in two local
authorities. So, I’ve got a reasonable 30-year understanding
of the fuel poverty and regeneration sector. Thank you.
|
[5]
Alun Ffred Jones: Diolch yn fawr. Thank you.
|
[6]
Ms Kelleher: Good morning. I’m Gill Kelleher and
I’m the policy and engagement manager for the Sustainable
Product Engineering Centre for Innovation in Functional Coatings,
which is an industry and academic industry-led partnership, looking
at how you turn buildings into power stations, and basically taking
existing technologies within the construction industry, and how you
can actually functionalise a coating within a building and
integrate it to store, release and generate power. I’ve got
over 25 years of experience in the construction industry and
I’ve recently just joined SPECIFIC because it’s so
exciting, what’s happening in the world between construction
and energy. I’m delighted to be here. Thank you for having
me.
|
[7]
Alun Ffred Jones: Diolch yn fawr.
|
[8]
Mr Jones: Good morning. I’m Shea Jones from Community
Housing Cymru. We’re the membership body for housing
associations in Wales. We own and manage over 150,000 homes now.
I’ve been with CHC as a policy officer now for around seven
years, and my background before that was just working in research
for universities.
|
[9]
Mr Curry: Good morning. I’m Steve Curry from Valleys
to Coast Housing. We’re the first large-scale stock transfer
association in Wales. We’ve been actively involved in the
Arbed scheme and other energy efficiency programmes for a number of
years, and we have a vision to eradicate fuel poverty in Bridgend,
hopefully by 2020, but as soon as possible. So, we’re very
keen to do more work in terms of energy efficiency in the
future.
|
[10]
Alun Ffred Jones: Thank you. We’ve got an hour, or
slightly less than an hour, so, succinct questions and answers, if
I may, in order to get through as much stuff as we can. Julie
Morgan.
|
[11]
Julie Morgan: Bore da. Can I ask each of you to tell
us what your views are on the single most important energy
efficiency measure that would help Wales meet its climate change
and carbon reduction goals?
|
[12]
Mr Anderson: Yes. I’m very happy to take that
question. It’s less about measures and more about resources.
If you look at the state of play in Wales today, there are 360,000
homes still in fuel poverty, but beyond that, our mission is
affordable energy for all. We’ve done a lot through the Arbed
programme, through working with Nest in partnership and through
extending gas to make energy more affordable. All of those measures
are very useful, but there’s not enough of them. That’s
the problem. There are 1.3 million homes, and 360,000, roughly, in
fuel poverty, and at the current rate of progress, it would take
somewhere in the region of between 20 and 30 years to tackle that
problem. So, the only way we can really get on top of things is to
introduce zero-cost loans for the very vulnerable and very
low-interest loans—a bit like Germany, at 2 per
cent—through local authority activity at the local level.
|
[13]
Alun Ffred Jones: Excuse me. Can I just interrupt you? You
said 20 to 30 years before we could get to the end of the problem
at the present rate, but I’ve heard a figure of 76 years
being quoted somewhere in the evidence.
|
[14]
Mr Anderson: Well, it depends who you listen to. The data
sets in our sector are very poor, and, if nothing else, it’s
looking at a combination of better data, so we’ve all got a
better understanding of things, and finance. Unless we bring in
loan finance, we will always be working to the denominator of
grants, and grants, as we all know, are under pressure. It
doesn’t matter which party is in power, there’s still
that dilemma.
|
[15]
So, if you look at the number of households in fuel poverty, four
out of five are in the private sector—the private rented
sector, which, very shortly, will be the same size as the social
housing sector. The social housing sector has seen large-scale
investment through your good offices in making sure that enough
investment goes in there, but we now need to do the same in the
private sector. Without doing that, we’ll never get on top of
carbon, we’ll never get on top of cost and we’ll never
get on top of the health agenda. That’s probably the elephant
in the room—the impact of the demographics, looking ahead to
the number of people over 60 who will be the baby boomer generation
coming through, and the fact that Wales has a very large percentage
of very poorly insulated buildings. That means that we’re
going to see the health service under increasing pressure, so we
need to find a way of bringing in more cash, insulate the buildings
and start the schools programme to get the generational impact.
|
[16]
Alun Ffred Jones: Are there any other comments on the same
question?
|
[17]
Ms Kelleher: I’d say that, basically, in terms of a
single, most important measure within a building, the fact is that
design is really missed out of the whole equation. Actually, you
need to look at how you design and use your buildings in your
community—your local infrastructure. Wales is leading the way
in terms of its sustainable development goals and it has set a
great framework there, which we can populate with some of the
detail. We’re looking for sustainable consumption, moving
forward. Like this gentleman says, how we manage our resources,
moving forward, is going to be critical, as well.
|
[18]
If you actually reduce the amount of heat and energy that’s
needed within your buildings and within your communities,
you’ve got a better chance of dealing with security of supply
and addressing the challenges of the energy trilemma. So,
certainly, if you can get the fabric of the building right to begin
with, but again, look at how you optimise that building, at what
cost to do it and whether it is better to redesign and rebuild
somewhere else and look at how you can optimise through design.
Unfortunately, given the joys of our regulation, when you actually
do design and build what you want to build, it isn’t built
that way, which, again, goes into the area of compliance.
|
[19]
Julie Morgan: Could you explain that?
|
[20]
Ms Kelleher: Yes, certainly. Basically, if you design a
building, you might want to build it using optimum building
products and performance, but you can’t necessarily do that,
because the compliance tools don’t enable you to do that. So,
through the standard assessment procedure and the simplified
building energy model and tools like that. Yet, you know, industry
is actually using other tools to overcome the challenges, but, in
practice, it’s incredibly difficult to deliver those
solutions moving forward. So with SPECIFIC and other projects that
have been done across the country and the world, we’re
actually looking at how you design and build these
buildings.
|
[21]
Ms Kelleher (contd):
|
[22]
Mr Jones: I was just going to pick up on the figure you
referred to earlier—the 70-odd years figure; that was the
Bevan Foundation report figure. I think that was very much focused
on actual investment in Wales and Nest in particular—however
many years it would take Nest to tackle the problem. I think in
addressing the original question, I would say that, looking at fuel
poor households, who typically live in solid wall properties and
off-gas properties, we very much welcome the approach of Welsh
Government so far in looking at tackling low-income households and
households that need support most. But, you need to move beyond
those lower-cost measures and look at solid wall insulation and
some of the wider measures which Arbed and other schemes are
addressing. But we’re not addressing what we need to be
addressing at this moment in time. It is going to take years and
the evidence gaps are quite weak.
|
[23]
Alun Ffred Jones: So, the answer is—
|
[24]
Mr Curry: I’ve got an answer, if I may. We’ve
done some estimates, and 93 per cent of our customers are fuel
poor. That’s according to our estimates; they’re as
accurate as we can get. We’ve got experience of completely
transforming people’s lives from, you know, very poorly
insulated, off-gas communities and making huge investments,
alongside Welsh Government, to completely transform their lives.
And the cost of energy’s taken them out of fuel poverty. We
can do it. The answer, really, simply, is whole house, whole
community retrofit including the private sector. We’ve done
that, and we can continue to do more along with our colleagues in
the sector. New builds are a tiny percentage of the issue. New
builds are coming in at a SAP rating of 80. There’s 1 per
cent churn per year in the stock. Most of the houses we’re
talking about, even in the future targets—2030,
2050—already exist. Whole house, whole community retrofit of
existing housing stock is what we need to do.
|
[25]
Julie Morgan: So, it’s the existing stock that’s
the key area? And in terms of the progress that’s been made
on that at the moment, it’s going to take a very long
time.
|
[26]
Mr Curry: We’ve been working with private sector
colleagues and colleagues in Community Housing Cymru and the
housing sector. We’re bringing in private finance using the
feed-in tariffs. We had a starting point of a whole stock
photovoltaic programme. That’s come to a crashing end with
the, basically, falling off a cliff of the feed-in tariffs. Arbed
has been a terrific programme for us to co-invest with, but
it’s been a little bit stop-start; I think we need a long
term investment and a long term vision, and I think we can
eradicate fuel poverty.
|
[27]
Alun Ffred Jones: I’m just going to bring in Jeff
here, but it was remiss of me—I should have introduced you to
Alan Simpson, who is our special adviser, and who may decide to ask
questions later on. His bark is worse than his bite, so they say.
[Laughter.] Jeff, did you want to come in on this?
|
[28]
Jeff Cuthbert: Yes, just very quickly. Gill, if I may, you
made the point about the specifications for new build and the use
of clearly sustainable materials. Now, what we’ve had said
here by housing developers, particularly Redrow, is that it’s
all too expensive in Wales and consequently, in many parts of
Wales, they’re not prepared to build. What’s your
response to that?
|
[29]
Ms Kelleher: There seem to be different views by many around
how affordable it is that you can build a house. Some of you may
have visited the SOLCER house recently. The SOLCER house is
brilliant and I love it, because it demonstrates what can be done
within five years. Five years ago, we built a house in consortia
with Nottingham University, BASF, Tata Steel and other industry
members—to build an energy-efficient home that incorporated
renewables within the code for sustainable homes to see what could
be built. We built a ‘fabric first’ approach house to
go 44 per cent beyond Part L building regulations to demonstrate
what could be done then. That was five years ago.
|
09:45
|
[30]
We didn’t want to go to code 6 because it wasn’t
affordable to incorporate renewables and make an affordable house
that could be replicated. I’m delighted that the SOLCER house
this year was launched to show that you can actually build a very
energy-efficient home that went 44 per cent above building
regulations Part L. It minimised the amount of heat and energy you
need initially, and then we incorporated renewables—not only
onto the building but actually integrated them in the building
because technologies are now there to do that. It was built
affordably. I think it was about £120,000, and that was last
year that we started the project. So, I’m pleased to say the
costs have already come down, and as we move forward those costs
will be reduced significantly.
|
[31]
So, in answer to your question, I believe that there is possibly a
different way that we can build houses using the technologies we
have, but unfortunately the way the supply chains operate, we need
to look at how we can embrace some of the new technologies.
That’s my role within SPECIFIC—to look at how we can
collaborate across the industries and demonstrate what’s
possible through new technologies coming forward. It’s
incredibly difficult to take a renewable technology and integrate
it into a building and have it recognised within building
regulations to say, ‘Actually, this is the performance
you’ve got and this is how it helps you deliver your carbon
targets and your budgets to hit our carbon targets.’ If the
baselines aren’t even right to begin with, how do you
actually show what you’ve improved upon?
|
[32]
This is why I think it’s brilliant what Wales is doing around
sustainable development goals, and it’s already set and
legislated on how it can do that. The UN’s working on a
programme of sustainable construction and buildings, again to look
at how you can model and take these buildings forward.
|
[33]
Alun Ffred Jones: A number of you want to come in on this.
Do you want to follow that up?
|
[34]
Jeff Cuthbert: No, no, that’s fine.
|
[35]
Alun Ffred Jones: Llyr, then Mick.
|
[36]
Llyr Gruffydd: I just wanted to pick this up—because
we started talking about the retrofitting stuff. We all know what
the challenge is; we all know what we need to do. But, for me, the
bottom line seems to be where we get the money to do it. So,
I’d be interested in hearing a little bit about your thoughts
around that. We’ve mentioned the 360,000 houses that need to
be retrofitted. I’ve seen a price tag of over £2.5
billion for that. So, that’s the key question from me: how do
we pay for it?
|
[37]
Mr Anderson: May I answer that one? It comes back again to
priorities and looking at a focus. If you look at the numbers,
which are too big, everybody shies away from them because they
don’t know how to tackle them. So, what I suggest is that we
double the rate of current activity to make it manageable and we
get loan assistance like Scotland’s got. I’m going to
Scotland next month—my home country, but Wales is my adopted
country—and I think there is a real Celtic connection, we can
make there.
|
[38]
Alun Ffred Jones: What is the loan assistance? Can you just
say that again? What is happening in Scotland
that’s—
|
[39]
Mr Anderson: Scotland has a raft of low interest or
zero-cost loans. The Government have sponsored that to be done at a
national level. I think it is possible for local
authorities—. There are some local authorities—Cardiff
and Flintshire, which I’m working with just now—that
are creating fuel poverty reduction hubs in both of those areas
because those are councils that have a determination to do
something about it. Councils have the ability with the Public Works
Loan Board—. When I worked for local government—for 25
years—we would use it because the borrowing is very cheap.
That’s why, dare I say it—and please forgive me here,
I’m going to mention Green Deal—Green Deal was an
abject failure because the price of finance was wrong and people
wouldn’t take it up. There simply wasn’t the
payback.
|
[40]
So, we can only get on top of the issue by more loan assistance.
Grants will always be under pressure. I think the grants should go
to the most deserving causes. There should be a compact for
everybody on energy to show how they’re addressing the needs
of the health sector. If we don’t do that, there are 12 to 15
cold-related conditions, and we will see our GP practices and our
health service overwhelmed with the demographics. So, if I was
leaving you with one message it would be around finance geared to
health.
|
[41]
Alun Ffred Jones: Does somebody want to come in on that?
Shea.
|
[42]
Mr S. Jones: Just to pick up on the health point,
you’ll be familiar with a couple of schemes in
England—the boiler prescription schemes—where health
are actually funding energy efficiency projects. Obviously, health
is structured slightly differently—that’s my
understanding—in Wales, but actual clinical commissioning
groups and other groups there are funding projects where
they’ve actually evidenced the impact of energy-efficiency
investment on improvements in health.
|
[43]
Beyond that, in terms of answering Llyr’s question on
funding, obviously, there is the opportunity for European funding.
We’re part of the fuel poverty coalition, and, as part of the
election next year, one of our calls is, actually—. On the
back of the energy company obligation and all those programmes
coming from the UK Government, there are obviously levies on
consumers’ bills to pay for those programmes, so, what
we’re actually calling for is—all the money that
consumers in Wales are paying as part of their bills for these
levies, should we be using some of that money to plough it back
into energy efficiency investment?
|
[44]
Alun Ffred Jones: Alan apparently wants to come in on the
issue of finance.
|
[45]
Mr Simpson: Thank you, Chair. I just want to say, coming
from Nottingham, that I am well aware of that pioneering work that
you did at the university. I’m not really troubled about the
technologies of transformation; it is the finance. It seems to me
that, if you were to look internationally, there are so many
different approaches. I’d just like to know from each of you
what advice you’d give to the committee about your preferred
route. It seems to me that the workable choices at the moment are
Germany, which says we do it through their KfW bank, at zero
interest or up to 2 per cent, de-risking the process, and they
don’t bother going through the energy companies; they say
that energy companies just want to sell consumption. So, they have
it KfW or Green Investment Bank-led.
|
[46]
One of the other approaches in the USA is where states have the
power to set conditions of performance on their DNOs. So, an
obligation to deliver 5 per cent per year reductions in energy
consumption has seen their DNOs coming in as investment partners in
energy efficiency programmes, because that allows them to deliver.
So, they can specify—
|
[47]
Alun Ffred Jones: DNOs?
|
[48]
Mr Simpson: Western Power Distribution is one.
|
[49]
Alun Ffred Jones: Oh, yes.
|
[50]
Mr Simpson: A third is to say that we will set licence
conditions for the private sector, and you say that within three
years we will not offer a licence to rent to any property that
doesn’t reach band B, and we’ll offer the finance
support for you to get there, much like the clean air legislation
that we had. The fourth would be for Wales to be able set its own
carbon budgets that become, in a sense, the counterpoint of
finance. So, if you were to recommend a starting point to the
committee, where would it make most sense for Wales to begin on
that?
|
[51]
Mr Curry: Can I say that we’ve been working with the
distribution network operator very closely? That was in, initially,
a whole-stock power distribution programme. We’re going to be
able to gear up and do by Christmas, effectively—it’s
January when the FITs fall off the cliff—300 to 500; you
know, very quick.
|
[52]
Mr Simpson: Sorry, I’m not really wanting to know what
you’re doing. I’m wanting to know what you would
recommend to the committee to take forward as a policy priority
that would be transformative for Wales.
|
[53]
Mr Curry: So, yes, for incentives for the DNO to partner,
maybe to prioritise, community schemes as well. It’s never
been a better time to borrow money. We’ve just borrowed
£30 million for investment in new properties. We can borrow
money and I think the sector, again, as a long-term investment
partner, seems a good one. We can borrow at low rates. I think some
grants to start up and test some new technologies would be really,
really useful. The private sector is there to invest. I think the
incentives need to be there for the DNO, and, if there are some
start-up grants that are available from Welsh Government to
experiment with new techniques and new technologies,
then—.
|
[54]
Alun Ffred Jones: Okay.
|
[55]
Mr Jones: I think the point that I’d make is, wherever
the funding comes from, the transition to a low-carbon economy
needs to be socially just. The way it’s been structured, so
far, via, as I said earlier, the energy company obligation and
other programmes, it is very much so—it comes out of
consumers’ bills. We are in the position where, as the
registered social landlord sector, unless we’re actually in a
position to fund a lot of these measures for our tenants, in some
circumstances they’re not getting the funding in the first
place and then they’re paying higher energy bills in the long
term. So, I’d say not for the energy companies to lead such
programmes in the first instance, and for there to be another
vehicle or another agency to do that. Then, beyond that, I think
continue the approach that we’ve taken so far—I very
much welcome the Arbed programme; while that’s delivered,
obviously, it hasn’t delivered anywhere near enough—but
then using that and using grants as a lever to get sectors to work
together; the RSL sector, the private sector.
|
[56]
Alun Ffred Jones: Arbed is a grant-led scheme, isn’t
it, and it pays for—.
|
[57]
Mr Jones: Yes.
|
[58]
Alun Ffred Jones: Gill.
|
[59]
Ms Kelleher: Obviously, finance is a critical issue and how
we access that finance is fundamental. Yet there are pots of money,
I believe, available through other investment funds out there, and
at SPECIFIC we’re actually looking at how we tap into some of
that, because there are some true business cases around how you
actually model the social and economic impact within new community
schemes for how you retrofit new buildings and your industrial
buildings as well. So, I’d welcome the opportunity to pick
that up later with you to share what we’re doing.
|
[60]
Last year, I did some work for the Construction Products
Association around—
|
[61]
Alun Ffred Jones: Let me remind you, the question was: what
your recommendations would be to the committee in terms
of—?
|
[62]
Ms Kelleher: Yes. There’s definitely a role for one of
these finance methods and I’d like to discuss that
separately.
|
[63]
Mr Anderson: I thought you put it perfectly, the three
choices. The first three, I think, were spot on. It’s
basically having state backing for low-interest loans; it’s
putting it in in a fashion that can be delivered; the DNO’s
brought to the table, through Ofgem as the consumer champion, to
make sure that the DNO’s—. Because the energy companies
will never fully embrace it, because it’s not in their
interests. With the best will in the world, their interest is
shareholder value, which means selling energy. Our task is making
sure that that’s affordable for everyone. So, there’s a
dilemma in that issue.
|
[64]
The only other focus, I would say, from your suggestions, which I
thought were very appropriate, and I think we could compare
notes—. I’ll be comparing notes, anyway, with Scotland,
very shortly, so I’ll be asking those same questions, to
share best practice. That is the thing that’s also missing in
Wales; we don’t have a forum for tackling energy—but
energy in the round: energy, as it relates to health, energy as it
relates to poverty. That would be very welcome.
|
[65]
Alun Ffred Jones: It would be useful, after you’ve
been to Scotland, if you could share some of the details of your
discussions there. Right. Mick, did you want to come in?
|
[66]
Mick Antoniw: Yes, I just wanted to come in on a very quick
question. A number of you mentioned homes improvement, insulation
and so on, and, of course, that is, effectively, run by the energy
companies, to all intents and purposes, in terms of funding on
levies and so on. But there’s a lot of evidence that a lot of
it has been ineffective and that it has, effectively, almost been
run with houses being done that don’t need doing and so on.
There’s a lot of evidence beginning to emerge of problems
with that. Do you share any of those concerns? How would you see
that ongoing programme actually carrying forward in a way that
avoids the problems from the past?
|
[67]
Mr Curry: Can I say—
|
[68]
Alun Ffred Jones: Yes, Steve.
|
[69]
Mr Curry: —I think the problem is we have people who
join again—and we’ve seen plenty of that—because
there’s a grant around or there are some incentives around,
and they’ll do a job, they’ll do it quick and they
won’t do it well. They’ve got no incentive to do that;
they’ve got an incentive to do it quick and away they go and
fill cavities with anything. I think you’re referring to
that; I saw that in previous meetings.
|
[70]
Mick Antoniw: Yes.
|
[71]
Mr Curry: If you’ve got a long-term investment
partner, and, again, I’d suggest RSLs; as part of the
community, we can offer these services at very much cheaper prices
to the private sector, because of our economies of scale.
We’re a long-term investment partner in the community.
We’re not going to run away; we’re not going to be able
to run away. That’s the way to deliver it. Firms will come
and go; they will deliver things cheaply and they will walk through
your roof tiles to fit a solar PV panel if they’re getting
the feed-in tariffs, and tell you that they’ve done you a
favour to give you free electricity. There are always going to be
those problems. I think it’s who is delivering it and that
they are a long-term partner.
|
[72]
Mick Antoniw: So, there could be significant improvement on
what is currently being done by a change of the way it’s
done.
|
[73]
Mr Curry: Yes.
|
[74]
Mick Antoniw: Okay, fine.
|
[75]
Alun Ffred Jones: Okay.
|
[76]
Joyce Watson: Could I ask a question on that?
|
[77]
Alun Ffred Jones: Well, Jenny’s been waiting a long
time.
|
[78]
Jenny Rathbone: Two questions. One: why did it take Valleys
to Coast Housing so long to get on to the photovoltaic schemes,
because, obviously, the feed-in tariff has been there for a few
years now? I wonder if you could just explain why it took so long.
And the second thing is, now that we’ve got the SOLCER house,
is it a complete no-brainer to insist that all new buildings meet
nearly zero carbon energy requirements, otherwise we’re just
retrofitting—?
|
10:00
|
[79]
Alun Ffred Jones: The first question is specifically
addressed to you, I think.
|
[80]
Mr Curry: Okay. I suppose the initial answer is that, unlike
some people in the private sector, if a new opportunity comes
along, we wouldn’t be the first ones to think—and
that’s because of the construction of our board, which has
tenants and councillors as members; they have a fairly conservative
approach. We have made lots of investments in renewable energy,
including taking advantage of FITs through Arbed and other
programmes, so we use grant to invest in some things and, whilst
we’re there, we’ve invested our own money in a lot of
photovoltaics, et cetera, for feed-in tariffs. So, there was an
appetite, and we could do that. When we are able to, which we have
done recently, bring in private sector finance to mix with ours,
that we have an opportunity to do something like a whole stock
transfer—you know, we’ve recently borrowed money to
invest in new housing, but we can invest in other things. We can
then see that as a long-term opportunity that’s going to pay
back for our customers and for us.
|
[81]
So, we’re never going to be the first off the block to make
some money; that’s not really our role, but, as a
partner—and this is all about a long-term
partnership—we’re an ideal partner. We have a vested
interest in the community and a vested interest in reducing fuel
poverty. We have the ability to borrow and to bring in some
additional finance, so—. Yes, I think that’s
why—to use it as an investment. In terms of the new-build
requirements, I’d just reiterate my point that new houses are
coming in at a SAP rating of 80, and that the average house is
between 55 and 59. The churn is 1 per cent a year. For me, the big
solution in terms of fuel poverty, climate change and carbon
reduction is all about retrofitting.
|
[82]
Jenny Rathbone: Fair enough.
|
[83]
Alun Ffred Jones: Does anybody want to pick up the second
point? Perhaps I’ll bring in Joyce here. Do you want
to—? Because you’re on the same theme, I think.
|
[84]
Joyce Watson: Yes, it’s about the materials being
used, and you talked about investment in materials being used, but
I’ve had some feedback that the materials being used
aren’t necessarily producing the right outcome and almost
locking in all the moisture within a house and creating another
problem, because houses have to breathe at some stage. So,
I’m concerned that we’re not fixing one problem to
create another problem. That’s not always the case, but it is
the case that I know that money has been spent only to have to undo
what’s been done and do it again. So, have you got any
information that you could share with us where you’ve come
across those and, perhaps, resolved those issues, because you
can’t spend the same money twice, can you?
|
[85]
Mr Anderson: Perhaps if, Chair, I could answer your
question, when it comes to retrofitting buildings, the experience
has been generally good. There have been difficulties, particularly
cavities that have been filled inappropriately. We’re in an
area of high wind and rain, which means that the cavity should be
checked before the treatment is done, and that hasn’t always
been the case, but the standards now are much higher, and
everybody’s very alert to it. So, as a continuing problem, it
shouldn’t be that much of a problem. That said, there’s
a lot of cavities being removed just now and overclad with external
wall insulation to provide that rain screen on the outside.
|
[86]
But the industry is maturing. We’ve introduced a new product
to the market to seal the top of the wall heads, because
that’s the most vulnerable area—the EWi PRO. It’s
an insulated gutter system, so it removes cold bridging and
transfers the water more effectively. I think, in years to come,
we’ll see quite a number of the external wall buildings
failing.
|
[87]
We have here in Wales, the UK’s leading expert on external
wall insulation, Colin King. For those of you who’ve met him,
he doesn’t mince his words; he will tell you—if you
haven’t had evidence from him, I’d suggest you have him
here to tell you what the position is. Perhaps it’s slightly
difficult, in a way, because he’s now an adviser directly to
the Welsh Government. But certainly Colin and I have built a good
understanding over the years. I think, if Colin was here,
he’d probably be saying that Constructing Excellence in Wales
is a vehicle for doing that, and we’ve developed a
best-practice delivery vehicle, where the RSLs, ourselves and
others can be encouraged to attend and to share, and to make sure
that we’re abreast of the latest developments. Ventilation is
critical, because as you heat a building it basically absorbs more
moisture. As the heat goes up, it takes more moisture in—
|
[88]
Alun Ffred Jones: I’m going to stop you there because
I’m very aware of time, and the concern of this committee, of
course—what we’re trying to find out—is how we
can do things differently in order to improve the situation. While
all this is very interesting and valuable in terms of information,
I think that’s where our focus should be. Now, William, you
want to come in, and then obviously we want to come to skills and
building regs as well.
|
[89]
William Powell: I have one final question on finance before
moving to issues around behaviour change. Has any consideration
been given to potentially involving the European Investment Bank in
a substantial bid for funds to take forward some of the priorities
that you’ve identified, particularly given the sheer scale of
the task that’s been referred to?
|
[90]
Mr Anderson: Perhaps if I could start on that, I
wouldn’t think that there’s an issue going to Europe
for money, unless there’s grant attached to it. The ability
of local authorities—. I think we’ve got to embed the
energy agenda with local authorities and RSLs who are willing to
support them, as Steve was saying. So, we’ve got solutions on
our doorstep. The rate of borrowing can be very low. If the
European Investment Bank would come in with some exceptional deals,
then great, but I wouldn’t wait for it. I think we’ve
got the mechanism now to direct our funding more effectively.
|
[91]
Mr Jones: Just to say, we’ve questioned the Green
Investment Bank and why they can’t look at funding this type
of stuff. Thinking back to the feed-in tariffs, when they first
started out, and the stop and starts there, we went out to the
banking sector to actually get funding for the social housing
sector to fund a large amount of installations. No banks in the UK
were interested in funding us. We managed to get a Belgian bank
that stepped up to the plate to fund us, and then the endgame,
really, was that there was the European banking crisis literally
two months after we came round to signing an agreement, and then
the feed-in tariffs dropped. So, we would have done a lot more on
programmes like that if it wasn’t such a stop-start
process.
|
[92]
William Powell: I am aware that, since about 2009-10, the
EIB has been very substantially capitalised. They have done quite a
lot of partnering up with local authorities and regions in England,
and they’re involved with Welsh Government on specific
projects, also with the utility companies, and with projects of
real scale. So, I would have thought it might well be worth
exploring that. That was just my—
|
[93]
Ms Kelleher: Certainly, under the energy efficiency
directive, there are numerous different ways to tap into the
cohesion policy funds as well, to actually bring some of this
together and join it up across some of the directives, and
certainly through the renovation road map, which has to be updated
for November 2017, and, next year, we have to look at Part L
revisions as well. So, you could actually have a nice transitional
plan of, ‘This is how we’re actually going to do
it’, because some of the existing policies are now obviously
being scaled back, and we need to look—and this is obviously
in line with DECC as well—at how we have a plan going
forward. Certainly, trust is a major issue, and there’s a
full review at the moment being undertaken by DECC to look at trust
issues and compliance and how you tackle accreditation and
certification and make sure what you get is what you get, and how
it’s done.
|
[94]
Alun Ffred Jones: William, do you want to come in on
something else?
|
[95]
William Powell: Yes, please. Gill, you spoke earlier about
the importance of the SOLCER house an exemplar, so that people can
learn. What do you think are the main barriers to behavioural
change—to actually making progress in terms of driving down
energy demand and increasing efficiency?
|
[96]
Ms Kelleher: I think it’s engagement with what is
possible. I’m an early adopter, but not really a great early
adopter, and it’s something I’m thinking that I could
do at home myself. It’s basically just public engagement with
what’s possible and how we basically can take what
technologies we have. Like you’ve said, we can do the
technologies, but how do you deliver it? What’s brilliant
about SPECIFIC is it wants to now demonstrate how you can take
these technologies, take the SOLCER house, and do 10 of them, and
then do 100, and then do 1,000, and what we now want to do is ask
how we scale that up. That is the biggest barrier. How do we get
everybody together to do this?
|
[97]
Alun Ffred Jones: What’s stopping one of your members,
or indeed a body like yours, from adopting the SOLCER house model,
for example, in a new estate they were building? I understand the
argument that retrofit is the most important thing, but surely this
is also part of the process.
|
[98]
Mr Jones: I think the SOLCER house sounds great, and
we’ve got a couple of site visits, as a sector, to the
project in the next couple of months. I think the biggest shame
about the SOLCER house is, from my understanding, due to the
funding requirements, you can’t actually have people living
in the house, on the back of the funding. So, that’s critical
in terms of behaviour change. You can build what you like, but it
comes down to comfort, and if people can’t live in it and
test the systems, and so on, how do you judge that?
|
[99]
Alun Ffred Jones: People can’t live in it where it is
at the moment, you mean.
|
[100] Mr Jones:
Yes. Due to the actual project, the house they’ve delivered
through the funding—
|
[101] Alun Ffred
Jones: You could build it elsewhere, and I’m sure that
people—.
|
[102] Mr Jones:
We’re very committed to high standards, as a sector. We do
build to high standards already. Speaking to some of our members,
there are competing regulations, to an extent. We build to higher
standards than the private sector as it stands. We build to
development quality requirements and Secured by Design, and all
those types of standards, and obviously we building to—
|
[103] Alun Ffred
Jones: Are you answering my question about why can’t you
adopt the SOLCER house as a—
|
[104] Mr Curry:
Can I come in? There are Pentan houses, and we’re
experimenting with those as being something that’s very
energy efficient, modern and affordable to build. A house
that’s up to passive standards does, at the moment, cost a
hell of a lot more. A new home of any sort has a lot higher
standard assessment procedure rating and energy efficiency than any
other, and, at the same time, people—not right now in our
stock—are living in homes that are single skin, prefabricated
homes that haven’t had the treatment and have abysmal ratings
for SAP and cost a fortune. If people see that we’re
investing a huge amount, over the odds, if you like, in one or two
new homes for a few people, it’s not equitable.
|
[105] Alun Ffred
Jones: We were given the fact that it actually costs
£130,000.
|
[106] Mr Curry:
But the stock is churned at 1 per cent a year. Most people live in
homes that are already there.
|
[107] Alun Ffred
Jones: I fully understand that point, but, in terms of new
build, if you’re not going to take up these new developments,
what are we about?
|
[108] Mr Curry:
I totally agree that, if there are incentives there for the market
to take up and to make those things more widely adopted and more
cost-effective, then obviously I have no problem with that being
part of a mixed development.
|
[109] Alun Ffred
Jones: Do people want to come in?
|
[110] Julie
Morgan: Obviously, in Cardiff, there are going to be thousands
of new homes built, because it’s one of the fastest growing
cities in the UK. So, that would seem to be an ideal opportunity
for these standards to be adopted. So, what do you see as the
barriers to that happening?
|
[111] Mr
Anderson: Perhaps I could answer that question. If you look at
the Design Commission for Wales, they are an independent champion
there, and, with the volume of development, there’s nothing
to stop you suggesting that the design commission takes more of a
lead in that direction to make sure that the SOLCER message is
finding its way through into new development. Frankly, I think the
house builders have to be put on the spot, a bit like the energy
companies had to be put on the spot, to say why they can’t do
it. The SOLCER house can be built for £1,000 per square metre,
complete. I know that because we’re working at the moment
with an RSL—I can’t name them because we’re not
far enough progressed with it—and also a private developer.
I’m charged with taking the SOLCER into the commercial
market. So, we now have passive house systems blended with SOLCER,
because SOLCER goes beyond passive. It’s actually about
positive energy, it’s about battery storage, it’s about
next generation, and Wales has got a lead there. So, we’ve
got a great opportunity, with 40,000 homes happening in Cardiff,
and Valleys to Coast and the development programme, and all RSLs.
NPT homes has been doing SOLCER on retrofit of five houses, so
we’ve got the message there that there’s no reason why
we can’t apply the SOLCER message to retrofit. So,
you’ve got new build and retrofit. We’ve got that on
our doorstep now, and Wales has got a lead in that. We should be
exploiting that.
|
[112] Alun Ffred
Jones: Jenny.
|
[113] Jenny
Rathbone: It’s excellent that you’re doing that,
but why then is the social housing sector asking about incentives
to do it, when it’s within the envelope of what you have to
employ to build housing anyway? So, if you’re going to be
building new housing, why not build it to the SOLCER standards?
|
10:15
|
[114] Mr Curry:
The new housing that we normally build is normally in partnership
with the private sector. I think those mixed communities are very
much the way forward. We have our own standards, and sometimes
they’re quite close and sometime they differ slightly from
the private sector. So, if the development is going to be led by
the private sector, we would have no problem at all and we would
actively encourage them to deliver the houses that offer the best
energy efficiency possible. So, there’s no problem there;
it’s just that we partner the private sector in developments,
by and large. We are developing, as I say, some innovative models,
and we’ve been looking at all sorts of systems where we blend
thermal stores, battery stores, looking at all sorts of interesting
techniques using energies et cetera to experiment with ways to find
the best energy efficiency and, indeed, energy positive models. So,
we’d welcome a chance to invest more in trialling and
piloting these methods, because some of them will work better than
others. So, we really want to be involved in doing some more
pilots, really.
|
[115] Jenny
Rathbone: But, the private sector seemed dogged—.
You’re the commissioner, so why aren’t you saying to
the private sector, ‘This is the standard that we want, and
go and talk to the people in Swansea and Cardiff if you want to
learn how to do it; it’s not difficult’?
|
[116] Mr Curry:
They will tell us, ‘Right, okay, well that will cost you 20,
30 per cent more’—
|
[117] Jenny
Rathbone: Then, surely, we have to find another way then,
because it doesn’t cost 20 or 30 per cent—
|
[118] Mr Curry:
Yes, and so we are building a small number of houses using the
Barnhaus technique and we’d want to do more, because the
volume builders are not really using those techniques.
|
[119] Alun Ffred
Jones: Obviously, this comes down to building regs to some
degree. Do you want to ask a question, Joyce, on this?
|
[120] Joyce
Watson: I do, and I also suggest that you go to Pembrokeshire
where they have done some passive housing and they are letting
them. They’ve built six houses, and they’re letting
them out at 20 per cent below the market rent. So, there are
examples outside of Cardiff. I just thought I’d put that on
the table, and it’s also a private investor. So, anyway, I
would like to come back to the building regs, and particularly your
view on the Welsh Government’s recent energy efficiency
consultation.
|
[121] Alun Ffred
Jones: Who’s going to take this up? Anybody involved in
this consultation?
|
[122] Mr Jones:
You’re talking about the energy efficiency summer one.
|
[123] Joyce
Watson: Energy efficiency, yes. There was a consultation on the
building regs.
|
[124] Mr Jones:
We very much welcome—. I mean, in terms of separate and
existing stock and new build, we very much welcome the energy
efficiency strategy from Welsh Government in the summer.
There’s a lot of focus in there on approaching energy
investment programmes similar to the way they’ve been
approached in the past by targeting low-income households.
There’s very much a focus on rural-proofing and recognising
the issues we face in rural Wales in terms of the number of
properties off gas and people paying more for their energy
needs.
|
[125] In terms of Part
L and the building regulations in terms of new build, we’re
in constant contact with our members about new build standards and
costs of building to these standards. We very much welcome the
SOLCER house and the approach taken there. I think, on the ground
and the way things are currently working now, if you can scale up
those sorts of homes, great. Have we got the right skills in Wales
to do that in terms of design, and so on and their issues? As to
the way the construction sector is working at the moment, when our
members are going out to tender for different projects,
there’s not much in terms of choice. And very much so that
there’s changing standards in the sector, so we’re
building to development quality requirements and a range of other
standards, and they’re all being reviewed at the moment, and
they compete in a way. So, if you’re going to be building
within acceptable cost guidance, you’ve got all these
competing standards; you’ve got fire sprinklers coming in
next year, for example, as well. So, with all these competing
claims, can you be committed to all those things and still build
within acceptable cost guidelines, basically, but we’re
committed to higher standards and if we can build to those higher
standards within those costs, then great.
|
[126] Alun Ffred
Jones: Did you want to come in, Alan?
|
[127] Mr
Simpson: Yes. I just wanted to say, Chair, there’s a
danger of becoming really airy-fairy in this. You all know that the
EU energy efficiency directive requires that by 2018 all social
housing is going to have to be near zero energy standard. So, you
know that. It’s not an incentive; it’s an obligation.
And, you know that, by 2020, that’s going to apply to the
whole of new construction. So, why don’t you just say to the
committee, ‘For goodness’ sake, make that a
requirement; if we have to be there in 2018, it would be helpful if
Wales said, “We’re not going to consider any planning
applications for new developments that aren’t based on
meeting that 2018 standard now”.’ And, so, you change
the ground rules. Rather than saying to the committee, ‘Well,
it’s a bit complicated here and we’re doing our
best’—. If that’s all, we end up still in the
same bureaucratic soup that has left us stranded. What the
committee’s saying is just be clear what will drive the
change for Wales.
|
[128] Mr Jones:
I totally agree. I think it’s a matter of actually sitting
down and working out at what stages we move towards that. So, in
terms of being realistic, do we take a jump to much higher
standards now, or do we put a proper time frame in place to reach
that?
|
[129] Alun Ffred
Jones: But have you been pestering the Government to move
quicker towards these new standards?
|
[130] Mr Jones:
I think we just need a debate, to be honest, and to sit down
and—
|
[131] Alun Ffred
Jones: But the summer’s discussion surely was the debate,
wasn’t it, in terms of—? Or wasn’t it,
perhaps?
|
[132] Mr Jones:
Yes, to an extent. The Welsh Government obviously consulted on Part
L last year; there’s going to be another review next year and
we’ll feed into that as and when.
|
[133] Alun Ffred
Jones: Okay. Craig, do you want to come in on this?
|
[134] Mr
Anderson: Yes. I feel fairly strongly on account of being an
architect and a planner. The Merton rule came in several years ago,
requiring renewables on buildings, and then it sort of got lost in
translation. Wales was a leader in building regulations and that
got lost in translation. We need to get back on track, and I
wouldn’t wait until 2020. The SOLCER message is clear enough
now that Wales should be leading the way. We should be promoting it
as a country. We should be having industries here and we should be
getting out there, on the world stage, with a Welsh product, with
Welsh expertise, fantastic research and people who are committed.
So, we don’t need to wait.
|
[135] Alun Ffred
Jones: Jenny wants to come in.
|
[136] Jenny
Rathbone: Can I just reiterate my earlier question, then?
|
[137] Jenny
Rathbone: It is a no-brainer, then, to ensure that all new
housing meets the SOLCER standards, or is there a deficit on the
skills required? What are the barriers to instantly saying,
‘This is the standard’?
|
[138] Mr
Anderson: There is not a deficit of skills. The skills are
there; we just need to channel it and we need to promote it.
It’s a great opportunity for us and we need to get out and
start doing it. We need to get these pathfinders; registered social
landlords—I’m already working with four of them who are
pathfinders, on SOLCER, and I’m meeting with one of them
tomorrow to get going with a project. If anything, if you could
lend your support to saying, ‘Why doesn’t every RSL
have 20 houses in the next year where they pioneer this?’,
and let’s get going and share the practice across the
country, we’ll accelerate it and we’ll get there before
2018.
|
[139] Joyce
Watson: Can I ask a direct question? We have heard from the big
building companies, ‘We can’t do this; we’ll go
and build somewhere else; it’s too expensive’, and
Redrow being upfront with this and saying, ‘We’ll just
pull out of Wales; just forget it, really—it’s not
going to happen.’ Is it the case, then, that what’s
really going to drive it, ultimately, is going to be the policy
that says, ‘You can’t do anything else’, because
that’s what we really need to know?
|
[140] Alun Ffred
Jones: So, who’s going to take that?
|
[141] Mr
Anderson: We need to stimulate the discussion. We need to have
them around the table. I used to sit down with Redrow, when I was
in Swansea, as development director, and we had all these people
bellyaching about how they couldn’t do things and we’d
have a sensible discussion—‘You’re going to make
money out of coming to Wales and investing; if you don’t want
to do it because the particular way that you like doing your
business is cost-cutting, it’s about your shareholder value,
then that’s for you—go to England and do it
there’. But we should be welcoming. We should be having a
discussion with construction companies that are prepared to do that
in Wales. There are loads of them. Don’t be put off by
Redrow.
|
[142] Joyce
Watson: I agree with you, because I’m the founding member
and chair of the all-party group on construction. So, there are
companies that are very willing do to this. There are skill sets
that are easily transferrable to do it. So, how do we link those
two things together so that we don’t get, and I’ll use
your words, this super bureaucracy by listening to the wrong
people, because the skills are the skills and they can be
reapplied—
|
[143] Alun Ffred
Jones: And the question is?
|
|
[144] Joyce
Watson: —and the policy is the policy? So, how do we link
the skills and the policy together?
|
|
[145] Mr
Anderson: By getting on with the pathfinders, by having every
RSL committed to want to do it. There should be a compact. Well,
Community Housing Cymru are already leading the way. They held a
conference last month with Our Power, which is about energy and
different ways of doing energy. So, you have the mechanism here in
the room for doing it.
|
|
[146] Alun Ffred
Jones: Bill, did you want to come in on anything?
|
|
[147] William
Powell: No, my question has been dealt with.
|
|
[148] Alun Ffred
Jones: We’re coming towards the end of our
morning’s discussion. I want to give you an
opportunity—. We are looking for the game-changers.
We’ve talked a great deal. You say there’s a lot of
good work going on. I must admit from my point of view, when I look
around my particular patch, I see buildings going up as
they’ve always gone up, with slight improvements, a bit more
insulation and so on. I don’t see any big, big change. I may
be wrong, of course. So, what other big changes that you think we
could advocate in terms of Government or any other means to make a
real difference? So, I’m open to—you can make your
pitch now before you leave. Gill, you can kick off.
|
|
[149] Ms
Kelleher: We’ve got a great opportunity to test the
methodology and the specification for an energy efficient home. We
have passive house standards and other standards. You know, if you
design better than existing Part L now, get your fabric right, you
know, go down the zero carbon hub route of fabric-first approach,
get that specification, take it to the RSLs and say, ‘This is
20 to build within each of your regions’ and then actually
test that methodology, work with the supply chain partners to say,
‘This is what we’re doing, this is what we want to
achieve—how do we do it?’, and then, you can actually
look at the true problems and issues around the challenges, if
there are challenges, and also you can look at the energy issues as
well, the infrastructure of delivering those homes and the impact
they have and ensure the design and the modelling tools fit and
actually, you know, take you through that whole process. Then
you’ll get some real understanding and start to actually
deliver what’s possible.
|
|
[150] Alun Ffred
Jones: Steve Curry, you mentioned the retrofit as being one of
the big changes that need to happen.
|
|
[151] Mr Curry:
We’ve invested alongside Welsh Government and
transformed—
|
|
[152] Alun Ffred
Jones: But what needs to change in order, you know, to get to
where we want to be sooner than in 70 years or whatever?
|
|
[153] Mr Curry:
I think there’s a mixture in terms of planning regulation;
there are all sorts of things and incentives. We would be a very
willing partner and, you know, there’s European money and
other things available. We’re an ideal testing ground—a
long-term partner—and we can see the results with the most
fuel-poor customers, and what works, and we’re in a position
to be able to roll that out and actually promote that in a
community so there’s appetite in the private market as well.
So, we’d really welcome the chance to do a lot more.
|
|
[154] Alun Ffred
Jones: Shea.
|
|
[155] Mr Jones:
We haven’t touched much on consumer matters today.
There’s a model in Scotland called Our Power, which Craig
just referred to, which is basically the first non-profit operating
energy supply company set up by a range of registered social
landlords in Scotland who are looking at market entry next year.
Their set-up has being funded by the Scottish Government and the
Scottish social fund and they’re very much focused on entry
to market for fuel poverty customers. So, they’re focused on
that end of it but also focused on a lot of distribution and
generation via renewables and other means. It’s a really,
really exciting model. They’re asking us to work with them in
Scotland—in potentially collaborating. But it’s an
option to do something like that, or to do something similar in
Wales and look at a similar model.
|
|
[156] Alun Ffred
Jones: Could you send any details you have of Our Power?
Anything you know that might be useful for us would be great.
Diolch yn fawr. Craig.
|
|
[157] Mr
Anderson: I think the message that I’d like to leave you
with is the need for us not to have a meeting like this now and
again, every year or two years or whatever, but to embed it in a
process of best practice where the right players are around the
table. You have got Constructing Excellence in Wales, which is one
element, but we need to engage with health and we need to engage
with local authorities around a common agenda, which is about how
we make our homes more affordable. And that in itself will bring
bigger change overall because you then take the finance into that.
So, you have the players around the table with the pathfinder
projects, and then the cost structure comes around it and the
finance flows into it from local authorities because they see that
there’s a common agenda with an ambition and a drive and
determination.
|
|
10:30
|
[158] Alun Ffred
Jones: Are you proposing setting up a new body? Is that
your—?
|
[159] Mr
Anderson: It might be possible to do it through Constructing
Excellence in Wales and have a retrofit—I think it’s
predominantly a retrofit. There are new builds as well, so we
mustn’t lose sight of that, but in terms of proportion of
time, it’s an 80:20—20 per cent of resources in new
build, because that’s the future and it’s about
engaging people and schools on that agenda as well, but the 80 per
cent is in communities and working within communities, again with
the schools agenda.
|
[160] It’s an
obvious thing, but we need serious players around the table who are
prepared to invest and are committed and are not just talking the
game by coming here to the committee and saying, ‘We
can’t build in Wales’—that’s ridiculous.
They need to have the ambition and they need to deliver. You, as a
regulatory body, but also as a promotional body, need to direct the
debate and we need to up our game. So, a new forum for making sure
that we share that best practice—that’s what’s
missing. We don’t have that forum yet. I think CHC would be a
good initial lead on it and in building that because of the links
into Welsh Government and with local authorities. Sorry to land
that on you, Shea. [Laughter.]
|
[161] Alun Ffred
Jones: Okay. Diolch yn fawr. Are there any last questions?
|
[162] A oes unrhyw
gwestiynau? Ocê. A gaf i ddiolch yn fawr iawn i chi?
|
Are there any questions? Okay. May I
thank you very much?
|
[163] Can I thank you
very much for coming before us and giving us your views? I’m
sure they will be very useful in preparing our reports. Diolch yn
fawr iawn. Thank you.
|
Daeth rhan gyhoeddus y
cyfarfod i ben am 10:31.
The public part of the meeting ended at 10:31.
|
Ailymgynullodd y pwyllgor
yn gyhoeddus am 10:50.
The committee reconvened in public at 10:50.
|
Ymchwiliad i ‘Dyfodol Ynni
Craffach i Gymru?’
Inquiry into 'A Smarter Energy Future for Wales?'
|
[164] Alun Ffred
Jones: Can we bring the committee to order? Welcome, Mark
Harris, from the Home Builders Federation, to provide his evidence.
Welcome. I’m going to ask you to give your name and your
title—as I’ve just done now [Laughter.] Then
we’ll proceed to have a discussion as part of our inquiry
into ‘A Smarter Energy Future for Wales?’ So, can I ask
you just to state your name for the record, please?
|
[165] Mr
Harris: Mark Harris. I’m policy and planning advisor for
the Home Builders Federation in Wales.
|
[166] Alun Ffred
Jones: Great. Diolch yn fawr iawn. Russell George.
|
[167] Russell
George: Good morning. Home builders in Wales—and the rest
of the UK for that matter, but it’s particularly Wales,
obviously, we’re interested in—how are you preparing to
meet the requirements to build nearly carbon zero new homes by
2020?
|
[168] Mr
Harris: We don’t see it as a Welsh issue necessarily,
because obviously that is a European requirement that applies to
the UK. A significant amount of the houses built in Wales are built
by the national house builders, and most of those house builders
are based in England, so it’s only really Redrow who are a
Welsh-based company—there are smaller companies based in
Wales. So, you know, we can look at it as not necessarily a Welsh
issue. But, obviously, we’re aware of the requirements and
one of the issues that we see at the moment, as we understand it,
is that there is this need to define what ‘nearly zero
carbon’ is. Although there’s a definition within the EU
guidance, member states can set their own definition. As I
understand it, one of the issues that the UK has, compared to some
other places in Europe—sorry, I’m just looking through
my notes—is around the primary energy issue. Primary energy
is around how energy is produced and where it comes from, and how
it then gets into homes. Because we generate less green energy in
the UK, that puts us at a disadvantage when you work out the
calculation. But, we believe as an industry that we’re
actually very close, currently, in how we’re building, to
potentially the levels that the standard will be set at.
|
[169] Russell
George: What do you think the definition should be, yourself,
of a nearly carbon zero new home?
|
[170] Mr
Harris: I think, as I say, the issue is around understanding
the whole life cycle of the energy. So, rather than necessarily
concentrating on just the performance of the house, it’s
understanding the energy that’s being used by the house, how
that’s generated, and also the energy that’s then used
within the house and the energy used by the people living in the
houses. So, it’s not just concentrating, necessarily, on the
dwelling, but looking at the bigger picture.
|
[171] Russell
George: Can I ask you to talk to the point of the balance
between the extra costs associated with the extra requirements and
having an affordable house that’s affordable for developers
to build and for people to buy and get them on the housing ladder?
Can you talk to that balance and your views around that?
|
[172] Mr
Harris: Obviously, there is an issue that we’re currently
looking at in Wales that it is more expensive to build in Wales, we
believe. And, that’s not just physically more
expensive—
|
[173] Alun Ffred
Jones: Why would that be?
|
[174] Mr
Harris: It’s not just that it’s physically more
expensive to build, but the price that you get for your dwelling is
less, compared to comparable dwellings in other parts of the UK. I
mean, there are obviously hotspots in England, but even if you
compare to the north-east of England, you get more pounds per
square foot for the same dwelling—
|
[175] Russell
George: So, to just check what you’re saying,
you’re saying that it costs the same to build a house, but
the market means you’ll get less—
|
[176] Mr
Harris: Yes, you get less—
|
[177] Russell
George: It’s a market issue.
|
[178] Mr
Harris: It’s the market, yes. So, we would have concerns
over any, certainly significant, increases in the cost to build in
Wales. It’s about competitiveness there. It’s also
important to remember that this is one of potentially many costs.
It’s the cumulative impact. So, we are continually being hit
by various things that require us to change things and they cost
more. So, it’s understanding the cumulative impact.
|
[179] Russell
George: One final question, Chair, if I can. Also, your view on
this: if a home is built that’s going to be more energy
efficient, there’s going to be a value to that in itself as
well, surely.
|
[180] Mr
Harris: I think you’d like to think there is, but I guess
the value is only achieved if—. That perception of better
value is only achieved if the customer either wants it or is
willing to pay for it. So, if it costs more to build that home
then, yes, you would be looking to pass that cost on to the
purchaser. So, obviously, the purchaser has the choice of a less
energy-efficient home costing x amount and vice versa. So, I think
there’s a lot to do with education and understanding. More
recently, I think, to be fair, the green agenda’s become more
about how much it saves in your pocket, rather than how
you’re saving the world, because people are more likely to
listen to how much it saves in their pocket. I think in my written
evidence I have already given you some figures that we’ve
published, showing how much cheaper a modern house built now, at
current standards, is to heat: it’s 50 per cent cheaper to
heat than a Victorian house. There are some other figures in
there.
|
[181] Russell
George: But, presumably you would support any initiative as
well where there was help or support, or Government intervention,
or a loan to help to build a more efficient home, if that payback
then could come over the next 10 or 20 years in saving energy.
|
[182] Mr
Harris: Yes, we’re not against improving the efficiency
of homes. So, yes, if there are any incentives to help us do that,
then yes, we’d be willing to consider it.
|
[183] Alun Ffred
Jones: Llyr, then Mick and then Jeff.
|
[184] Llyr
Gruffydd: You mentioned earlier, I think, that you thought that
the industry is very close to achieving the level of carbon
reduction that we all want to see. So, what will it take to achieve
it?
|
[185] Mr
Harris: I don’t know the details, if I’m honest,
but I think whenever you introduce new materials and new ways of
building, there’s always a need to upskill staff and a need
to look at the detail. I think there are things that will improve
over time and improve with improvements in technology, and
improvements with products that deal with issues that have been
identified. I know that the National House-Building Council, who
warranty a lot of modern houses, do a lot of work around providing
detailed information to people who construct houses on how they
need to put the house together in a certain way to ensure that they
maximise the benefits of the products they’re using.
|
[186] Llyr
Gruffydd: My concern is that it hasn’t already happened.
We’ve heard from a number of sources that the technology is
there, it’s deliverable, it can be done and at a comparable
cost as well. So, do you not think that an element of compulsion
would actually facilitate that happening because, as far as
I’m concerned, it should already be happening, surely?
|
[187] Mr
Harris: Obviously, I think you’ve been collecting various
bits of evidence, but we are not aware of definitive evidence, and
facts and figures, that support necessarily that it costs the same,
or that it’s not significantly more expensive. I think
we’ve also got concerns about future maintenance of some of
these things. I think there’s a difference between, I
suppose, what’s often referred to as a fabric-first approach,
where you use better insulation and better methods of construction,
and maybe what’s seen as more of a bolt-on, where you just
sort of add things on that add energy. I took the opportunity to
visit the SOLCER house on Monday and was shown round by the lead
architect. I think, to be fair, there they’ve got a
compromise between fabric and bolt-on, which seems a more sensible
approach.
|
[188] Jeff
Cuthbert: Sorry, but could you repeat that? A compromise
between what?
|
[189] Mr
Harris: Fabric and bolt-on.
|
[190] Jeff
Cuthbert: Oh, right.
|
[191] Jenny
Rathbone: Can you explain what you mean by that, please?
|
[192] Mr
Harris: Bolt-on is where you take a standard house and you, for
example, retrofit solar panels to the roof. Fabric is where you
increase the level of insulation.
|
11:00
|
[193] You may be going
for a better quality double-glazed window and the seal around the
window’s better, so that you increase the energy efficiency
and reduce heat leakage from the house.
|
[194] Jenny
Rathbone: So, you’re not impressed with the
design—the timber frames, the low-carbon cement and all the
other features.
|
[195] Mr
Harris: The question that we have over the design is
that—and I was able to ask some quite detailed questions when
I was there on Monday—it’s quite critical, for it to
work efficiently, for it to look like it does. So, if there’s
an acceptance that every future house in Wales will have a render
finish, will have that type of roof, will have small windows on the
north elevation, and you will look to maximise houses facing south,
and all the things that maximise the potential of that dwelling,
then obviously that will have an impact on what the houses of Wales
look like.
|
[196] Alun Ffred
Jones: Llyr, you wanted to come in.
|
[197] Llyr
Gruffydd: Yes, you also mentioned that an element of
incentivisation would probably be helpful; so, we’ve got the
carrot and the stick approach, potentially. Could you describe what
some of those carrots might look like?
|
[198] Mr
Harris: Clearly, if it’s shown that a particular type of
technology in the situation is the best—and obviously that
will vary in certain locations—and then we can show that
there is a specific additional cost to that technology, the obvious
answer, I guess, is that there’s a financial contribution
there. It may be that there are other things that can be done
around help with upskilling, which I think we’ll come onto in
some of the later questions, so that there are the people out there
to be able to understand and fit each product successfully. And,
you know, a better understanding of some of the maintenance issues.
I know that a comment that has been made to me, while I’ve
been trying to gather some information, is that it’s a very
rapidly changing industry, and colleagues have given examples where
they have sales people coming in saying, ‘These are the best
solar panels; spec these’, and you go out and you spec them
and then, three months later, they’ll be going, ‘Oh,
those panels are rubbish; there’s a new panel out now’.
So, maybe some guidance and help with understanding the industry
and where it’s going would also be helpful.
|
[199] Alun Ffred
Jones: Mick.
|
[200] Mick
Antoniw: Isn’t the crux of the problem, though, for your
members that what they want to do is maintain their levels of
profit margins and, what they’re doing, that is the prime
issue that affects them in terms of what they can or would want to
do?
|
[201] Mr
Harris: I can’t deny that as a statement, but I do think
it needs maybe some further comment. At the end of the day, the
house building industry and the companies are businesses. I
question whether or not a business coming in and wanting to do
something get questioned over the fact that they’re making
profit and employing people. The industry always seems to be picked
on as, ‘Oh, you’re only out to make profit’.
Well, we’re a business; we employ people; we have to pay
wages; we have to make the business work. Clearly, if you are a
business, you’ll get to a point where it no longer becomes
cost-effective to either build a product or make a product because
of what you can sell it for—there is no profit. Maybe the
discussion is around what the level of profit is, and I think
sometimes it’s maybe misunderstood what the level of profit
is within the industry.
|
[202] Mick
Antoniw: What is the target level of profit that house builders
would work on, then?
|
[203] Mr
Harris: The target that you’ve probably all heard is sort
of mid-20 per cent, but that’s pure profit. So, then
you’ve got the running of the business to come off that. My
members are telling me that, in recent years, certainly 16 per cent
or 17 per cent is the sort of profit that you actually achieve.
|
[204] Mick
Antoniw: That’s four times the profit level that is being
sought by major global retailers.
|
[205] Mr
Harris: Yes, I don’t know the details of the profit that
other businesses make.
|
[206] Mick
Antoniw: You’ve answered my question.
|
[207] Alun Ffred
Jones: Thank you. Jeff, I think, is next; and then Jenny and
Joyce.
|
[208] Jeff
Cuthbert: Well, it’s largely been covered. I will mention
the main issue here about energy-efficient homes, but I think when
you say ‘more expensive in Wales’ let’s be a
little bit clearer: people are very keen to build in Cardiff and in
parts of my constituency of Caerphilly, in the southern end near to
Cardiff and the M4—the planning applications are awash
there—but not further north. So, that’s a separate
issue. But, in terms of the cost, and it follows on from the point
that Llyr made, what is the difference, do you think, from the
house builders’ point of view, between the cost of building a
good energy efficient house and, shall we say, a normal, current
run-of-the-mill house, now, of the same size?
|
[209] Mr
Harris: We’re aware of the figures that are quoted in the
documentation currently available on the SOLCER house, and, to be
fair, the £1,000 a square metre that they quote is similar to
the current build costs for a new-build property. So, on the face
of it, it doesn’t look like—. My understanding is that
those figures aren’t firmed-up figures; there’s still
work ongoing. I guess, because it was the first of its type, we
need to understand what makes up those figures. But, obviously,
those figures rely on the property being built in that way.
I’ll give you maybe one example that will highlight it. The
roof of the SOLCER house, if you actually go into the loft space,
the roof is the solar panels, so there’s no felt, there are
no battens and there are no tiles. So, obviously, they’ve
saved the money of putting on a traditional roof, which has helped
to offset the cost of the solar panels. You know, that house has
got to last 100 years. We know that solar panels only last 25
years, so, in 25 years’ time, what happens? Does that roof
have to be taken off to replace the solar panels?
|
[210] Alun Ffred
Jones: How long do tiles last?
|
[211] Mr
Harris: A hundred years, a tile will last. So, there are some
upfront savings that we accept, but we need to maybe understand the
lifetime of the property and what the potential costs are.
|
[212] Jeff
Cuthbert: All of which is dependent upon advances in
technology.
|
[213] Mr
Harris: Yes. I mean, the cost of the panel is not necessarily
the issue there, but, if the panel is your roof covering and it has
to be replaced, that means you’ve got to come in, create a
scaffold box around the whole property, create a tent over the
property to maintain the water tightness of the property, and
that’s down to the homeowner; the homeowner’s got to
arrange for his roof to be replaced every 25 years. So, it’s
those potential hidden costs.
|
[214] Jeff
Cuthbert: But is there anything that suggests, forcibly, at the
moment, that building houses of that specification is significantly
more expensive than existing properties?
|
[215] Mr
Harris: No, there’s not, on the information that we
currently have, but, obviously, the effect, if you’re looking
at then value for money and the effectiveness—. For instance,
you could build that property in a very different orientation and
it probably would generate very little power. Yes, it would be
energy efficient, but it wouldn’t generate power. So,
it’s remembering whether you accept that all houses are going
to have to look like that and be orientated in a certain way, which
will affect the ability to meet local design criteria and other
criteria that other people put into the planning system in terms of
layouts.
|
[216] Jeff
Cuthbert: Okay.
|
[217] Alun Ffred
Jones: Jenny, did you—
|
[218] Jenny
Rathbone: Yes. In terms of the future generations Act, yes, all
homes will need to be north-south facing, because we need to
optimise—. It doesn’t really matter whether it’s
the front or the back, as long as you have that aspect. What is the
problem with that?
|
[219] Mr
Harris: Well, it’s not necessarily a problem, except that
it doesn’t necessarily always have to be north-south; you can
get lesser energy produced from other directions as well.
It’s just, if you drive on to any housing estate,
you’ll drive around roads, and the orientation of properties
will change. So if, suddenly, you have to take a square and put
every house south facing and then try and fit the roads around and
try and fit—. It doesn’t necessarily work.
|
[220] Jenny
Rathbone: I don’t want to get into too much detail on
that, but, certainly, in Germany, that is what’s happened:
they’ve optimised the orientation of the house in order to
maximise the energy generation capacity. I just wanted to go back
to—
|
[221] Alun Ffred
Jones: Can I just—. No, sorry; carry on. It’s all
right, carry on.
|
[222] Mr
Harris: What I would say is that, yes, you could do that, but,
potentially, taking a normal, standard site, you would end up
building fewer houses on the site, because you’re looking to
space them out and maximise their orientation. So, yes, you could
do it, but you’d get a lower density, so that means that, if
you want then to meet the housing need and build the houses we
need, you need more land, potentially. So, there may be a knock-on
effect of that.
|
[223] Jenny
Rathbone: Okay. It’s a bit complicated to pursue that
argument, but I understand what you’re saying. I just wanted
to go back to your statement earlier. You said that it wasn’t
competitive to build in Wales compared with, say, the north east. I
just wondered how it was that, if your members don’t want to
build SOLCER-type houses, there aren’t other companies coming
in to do that, and how will you respond if the social housing
sector starts to deliver energy-neutral housing that people
can—instead of having to pay huge sums of money for fuel
bills, they’re actually making money?
|
[224] Mr
Harris: If customers came to our sales offices and said,
‘Your houses aren’t energy efficient enough;
we’re not going to buy them. We’ve got the choice to go
down the road and buy an energy efficient house, and that’s
what we’re going to do’, then it’s business
sense: you’re going to do what the customer wants. Clearly,
housing associations’ houses have customers, but
they’re not paying customers as such. They don’t buy
the house. The house is built for them, and they move in, and they
benefit from the benefits of the house.
|
[225] We’re
saying, along with many others, that there is a need to build a lot
more houses in Wales, and we accept as an industry that we
can’t do that on our own. Within reason, we’re happy
for smaller and other businesses to come in and build more houses,
and, if someone comes in and takes the lead in the market with
these type of properties, and we find that they’re selling
really well and that customers want them, then the industry will
follow, because it makes good business sense.
|
[226] Jenny
Rathbone: Aren’t you about to miss the boat? Because
you’re going to have to do this anyway by 2018 for public
housing.
|
[227] Mr
Harris: I apologise that I don’t know the exact details
of it, and I’m happy to try and submit some further evidence,
if that will help, but we believe that we’re very close with
how we build anyway. So, we think we don’t have to do that
much more with our standard house types to achieve what we believe
should be the nearly zero carbon level that the UK set. What
we’re concerned by is that we’re suddenly told,
‘You can only build the SOLCER house, and you can’t
build any other type of house’.
|
[228] Jenny
Rathbone: We’re not talking about the specific design.
We’re talking about the level of energy efficiency, and
indeed its ability to produce more energy than it uses.
|
[229] Mr
Harris: Yes, but, as I think I’ve said earlier, there are
two elements there. The energy efficiency is about the fabric, and
how you build it—the materials, and the craftsmanship, which
is something we can deal with. The energy production is more about
the actual specific design and the orientation and the products
that are used. So, for instance, again, looking at the SOLCER
house, the north-facing element of it has very small windows to
minimise the heat loss.
|
[230] Jenny
Rathbone: Except the architect told us that they could have
actually had bigger windows, it was just—
|
[231] Alun Ffred
Jones: I think we’re going into too much detail.
|
[232] Jenny
Rathbone: Yes, I agree.
|
[233] Mr
Harris: Yes. Sorry.
|
[234] Alun Ffred
Jones: Joyce, and then Bill.
|
[235] Joyce
Watson: Thank you. I want to just ask very briefly, because I
want to move on, about this idea of energy consumption, and the
type of energy that the house might consume that you just started
talking about. I think that passive houses fit into that. So, how
the energy is produced, and how cheap and cost-effective it might
be: it could be solar energy, wind energy; it could be any of those
sources. How, as businesses, would you be assisted if those aspects
that you talked about, the difference between energy usage and
energy production, were in the mix when we define a zero carbon
house?
|
11:15
|
[236]
Mr Harris: Yes, I guess it’s about a sort
of—I’m trying to think of the right word. In my head
I’m saying ‘whole house’. It’s that sort of
overall approach. Yes, you can make the fabric and the building
energy efficient. It’s been shown that you can actually make
the property make energy, but, if the people who move in there
think, ‘Well, our property’s energy efficient and
we’re making energy’, and then just have hundreds of
electrical items in there that they leave on all the time, because
they think, ‘Well, we’re producing energy, so we
don’t need to worry’, in that bigger picture,
you’re not achieving the overall goal. I guess it’s
looking at the impact this has.
|
[237] I, very quickly,
got some figures this morning, and I couldn’t do it for
Wales, but, in the UK, there are 25 million houses. If you look at
the houses built in the last 10 years, it’s only 6 per cent
of those dwellings. So, yes, it’s going to have an impact,
but whether or not there are other energy users and other energy
wasters that are having a much bigger percentage impact on our
energy usage in Wales—. Could they be looked at as well?
|
[238] Joyce
Watson: I want to move on and ask you for your views on the
upcoming review of Part L of the building regulations, and what you
think they should be seeking to achieve.
|
[239] Mr
Harris: We obviously don’t know the details of what
they’re looking at yet. We’re currently working with
Welsh Government building control on some reviews they’re
doing at the moment. I think, in England, one of the decisions
that’s been made is, well, the industry is coming out of
recession, it’s starting to boom again and we’ve
identified that we need to build more houses, so let’s try
and give a bit of a level playing field for a while, keep things
static for a while so people can just get on with the business of
building houses. So, I think the concerns are that, if you keep
reviewing things and keep changing things—and this comes back
to, I suppose, the competitive issue—. What we’re
saying, and I’ve already said that I think it’s 80 per
cent of new dwellings that are built by the nationals—. Out
of the five nationals in Wales, four of those are based in England.
So, their decision about where they spend money on sites is being
made in England. If their guys in Wales are saying, ‘Well,
there’s another review coming in a year, we’ve got this
coming in, we’ve got that coming in, and we’re not sure
about this’, it just creates a level of uncertainty about
whether it’s the right place to invest that money. So,
we’re not saying what they’re doing in England
necessarily has to be copied in Wales, but let’s bear in mind
what they’re doing so that we don’t radically go and do
different things, because it potentially will create that level of
uncertainty.
|
[240] Joyce
Watson: Just on that, is it not the case, though, that the
majority of house building in Wales is actually done by smaller
firms? If we looked at the overall picture of house building in
Wales, would it not come out—and, if you haven’t got
the answer, we’ll accept it in writing—that the
majority of houses that are built in Wales, new build, are built by
smaller companies? You might build the biggest scale, but
it’s not quite the same as building the majority.
|
[241] Mr
Harris: The figures that I quote from are the NHBC’s.
Now, not all properties are registered with the NHBC, but those
figures show that we’re building 80 per cent—
|
[242] Joyce
Watson: But that’s your own personal membership.
|
[243] Mr
Harris: Well, NHBC is a governing body. Not my membership, no;
that’s the private house builders—.
|
[244] Joyce
Watson: Okay. Thank you.
|
[245] Alun Ffred
Jones: Sorry, do you want to—?
|
[246] Joyce
Watson: Yes, I just want to—. I want to also—.
You’ve talked a lot about barriers, really, and how they
might be overcome. I want to unpick, really, this whole idea
that’s been put on the table about England versus Wales and
this boundary that exists, and that you might go off into the
sunset and build elsewhere. How do we overcome the barriers that
you say are there, so that we can actually bring you with
us—because that’s what we want to do—to deliver
what has to be delivered by 2020? There’s no question about
it; that’s what has to happen.
|
[247] Mr
Harris: Yes. I guess the point I’m making there is that
it’s not just Wales that’s got to deliver by
2020—it’s the UK. And the houses we’re building
in Wales are, in many respects, the same as the houses that are
being built in the UK. There are some slight differences, but very,
very minor—more around ground conditions and things like
that—so it doesn’t really affect the energy efficiency
of the dwelling. I guess if it becomes obvious that England are
just ignoring it and not doing anything about it, then I accept
that we should do something about it, but what I’m saying is
let’s at least not necessarily jump in and try and be
massively different, unless there’s a reason to do that, but
let’s look at what other nations are doing—what England
are doing, what other nations in Europe are doing—because
they’ve also got to meet this target. And as I think I
mentioned at the beginning, part of the calculations comes back to
where the energy originally comes from, and some of the European
countries have put themselves in a very good position by putting a
lot of resources into green energy, and therefore because they
generate clean energy there’s less of a requirement to do
other things at the other end of the energy chain.
|
[248] Alun Ffred
Jones: A couple of people want to come in. Llyr, do you want to
come in on this?
|
[249] Llyr
Gruffydd: Just on this, I’m just wondering whether you
saw any commercial advantage in moving first on this—you
know, the first mover advantage stuff—because it’s
something that we could export then to other parts.
|
[250] Mr
Harris: I think there is that potential, and, on the face of
it, yes, but obviously that has—. I mean, there are two
arguments, I guess, to that. One is the customer side, so if the
people buying houses think it’s a benefit, then, yes,
we’ll go with that. I’m not sure what the figures are
in terms of how many people make that choice between buying in
England and Wales. It obviously does happen, so there is a market
there. I think, later on in the questions, it mentions the skills
agenda and training, and things like that. Without jumping ahead on
those, yes, there is potential there to create a market in Wales
for training. I suppose the potential risk—and this may be me
being a pessimist—is that you upskill and train everybody in
Wales, England then follow you and all the skilled labour leaves
Wales to go and work in England, because there are more houses
being built there and possibly more money being paid for the
labour, and we actually generate ourselves a problem in Wales
because we lose the labour that we’ve trained.
|
[251] Joyce
Watson: How would that make a difference to now? You’re
training builders now, and the CITB and the levy cover—. You
know, you pay into a levy anyway, and there are issues about that,
I know. But, how is that any different, because builders are
trained to deliver what they’ve got to deliver at the time?
I’m not sure I accept that.
|
[252] Mr
Harris: In the longer term, it probably isn’t that
different, because it’s the labour force that builds the
houses and they have the option to go where they want. In the short
term, possibly, when it’s seen more as a particular skill and
you’re starting on this new journey of building houses in a
different way, then there’s going to be a premium—
|
[253] Alun Ffred
Jones: Well, all that is conjecture. So, William, just to
finish off, and then Alan would just like to-
|
[254] William
Powell: Thank you, Chair. We’ve moved on to area of
questions that I was keen to pursue already, in terms of the skills
agenda. What are the main implications for the companies that you
represent in terms of the challenge of zero carbon, Passivhaus and
building energy positive homes?
|
[255] Mr
Harris: Our industry does use a lot of subcontractors. It
doesn’t use that much direct employment, so you’re
relying on companies. I guess the issue is around the certainty of
where we’re going with the types of products and types of
technology we’re using. So, people will only commit time,
money and effort into setting up the training courses for the skill
that’s needed if they know there are guaranteed jobs for a
reasonable length of time, and I think we’ve seen that around
the sprinklers. The closer that’s come, we’ve seen
Neath Port Talbot have taken up the skill training and set it up
and are doing very well with that, because they know it’s
coming in on a date, and they know it’s going to be there
forever.
|
[256] William
Powell: It’s got a certainty to it.
|
[257] Mr
Harris: Yes. We have seen, for instance, the solar industry
with the original feed-in tariff completely burned; the feed-in
tariff got halved and there was the impact on the industry. So,
skill training takes time and you need the certainty of those jobs
for the future to make it work, really, and be effective.
|
[258] William
Powell: You referred earlier to the possible brain and skills
drain of workers being tempted across into England by the scale of
work and maybe the length of time that work would be available on a
certain basis. Do you think that there’s any connection there
between the fact that, in large parts, certainly, of central Wales,
many of the key providers are already colleges in England, in the
Marches and further into England, that potentially then lead people
across, leaving us with a dearth of skills?
|
[259] Mr
Harris: I think there are issues around the boundary, and yes,
I guess, linked to that is the certainty of a job in the future. I
guess—. If Wales becomes different to England, radically
different, then there’s an argument that the training will
need to be specific to both. So, you end up potentially in a
scenario where you need to train in Wales to work in Wales.
|
[260] Alun Ffred
Jones: Not such a bad idea. Jeff, do you want to come in on
this issue?
|
[261] Jeff
Cuthbert: Yes, on this point. It’s the nature of the
construction industry that people move to where the projects are,
and we wouldn’t want to restrict people from going wherever
their skills can command a good salary. We remember Auf
Wiedersehen, Pet.
|
[262] Alun Ffred
Jones: Some of us remember. [Laughter.]
|
[263] Jeff
Cuthbert: That’s what I meant. Obviously, not the ladies,
clearly. [Laughter.] But, look, this is my main point: what
is the industry doing to be proactive here? Any industry must make
sure that it identifies the skills that are likely to be required
for future development as technology moves on. I trust that the
construction industry is no different. We get a mixed message
sometimes. ConstructionSkills have suggested there is a skills gap
that the industry has to address. Is that being done in terms of
identifying training and apprenticeship opportunities that take
account of these new technologies?
|
[264] Mr
Harris: I think there is a lot being done around skills and
training, and I think we accept as an industry that we are on
catch-up with that. Specifically around the new technologies, I
guess, as I’ve said, the incentive isn’t necessarily
there to do the skill training until you know that it’s a
specific requirement. So, I use the fire sprinklers as an example;
because we know they’re coming in on a date, there has been
an increased level of skill training and upskilling ready for that
implementation date. I guess, you know, 2020, no, it isn’t a
long way away—
|
[265] Jeff
Cuthbert: No, it isn’t at all.
|
[266] Mr
Harris: But how many businesses do actually plan that far
ahead? I don’t know.
|
[267] Jeff
Cuthbert: What are you doing as a federation, then? Surely,
wouldn’t you see this as part of your responsibility—to
guide your members to taking this matter seriously? Because you
can’t deny it’s going to happen.
|
[268] Mr
Harris: No. That is part of our role, yes, advising members on
what the changes in legislation are going to be, and what we can do
to react to that. As I say, we know there’s that 2020
requirement, but until the definition is there and it’s
understood how you meet that definition—. Another
example—and it’s one of the questions as well—is
that a lot of work was done on carbon offsetting in England, and
understanding that, and then the Government just said,
‘Actually, we’re not going to bother with carbon
offsetting.’ It may come back; it may not. So, you have to
react to the clarity of when things are coming in.
|
[269] Alun Ffred
Jones: Okay?
|
[270] Jeff
Cuthbert: Yes, that’s fine.
|
[271] Alun Ffred
Jones: Okay. Just to round off this session, I’m just
going to ask Alan Simpson—he’s our special
adviser—to ask the final question.
|
[272] Mr
Simpson: Thank you, Chair. Just three fairly quick ones, I
think, Mark. The first relates to the point that Jenny raised, and
that is: would he accept that, in terms of their configuration of
houses and estates, actually, there are shedloads of countries that
build houses on a grid system, and wriggly roads are a style issue
more than anything else. There’s nothing unusual about
building towards optimal configuration of properties. So, that
would be the first question, which I think is a fairly short
answer.
|
11.30
|
[273] Mr
Harris: Yes, obviously, if it’s done elsewhere we
can’t deny that it can be done. I mean, obviously, there are
other people who need to be brought on board: the highway
engineers, the planners and all the other people who influence the
layout. So, as long as that’s understood.
|
[274] Mr
Simpson: Great. That takes me on to the second one, which is
you said in your first answer—your comment about the SOLCER
house, separating them from the fabric issues within building
technologies and the bolt-on issues. That used to be said about
toilets. We used to have discussions in this country about the
provision of sanitation, whether that was to go in a building or
whether it was something to do with the municipal responsibilities.
Now, I would hope that it would be taken as a given that you
couldn’t get a property application looked at if it
didn’t have toilet facilities. Do you think that the industry
actually has problems in engaging with what will be the realities
of tomorrow’s construction requirements? It has to begin with
ceasing to call these ‘bolt-on’—the idea that
tomorrow’s housing is all going to have to be ‘energy
plus’. Is there a sub-contextual problem that you have in the
sector?
|
[275] Mr
Harris: I think the issue is around it’s such a
fast-moving industry and things change so quickly. As I say, I went
to visit a SOLCER house, and I consider myself to be a fairly green
person outside of my job, and in previous jobs I’ve been
involved with the external cladding of existing properties and so
on, but the technology, for instance, that’s used in the
SOLCER house, with the metal screen that traps the air, I’d
never, ever heard of that before. I’d never seen mention of
it, and that’s fairly critical to the design of the
house.
|
[276] Mr
Simpson: That wasn’t the question that I was asking. I
mean, actually, we have the same in sanitation: we have short-flush
toilets and we have all sorts of toilet designs. That’s the
step on from accepting that that is the new norm, and I was
just—well, maybe I’m asking you to feed back to the
sector that it needs to reset its own thinking about what has to
cease to be—
|
[277] Alun Ffred
Jones: I have to move you along.
|
[278] Mr
Simpson: Okay. Final question: I don’t have a problem
about companies making a profit. I’d rather you were in
business than not. But would it help the debate if we were to
separate out the interests of builders from the interests of land
hoarders, and, providing this was backed with an obligation to do
back-to-back deals, would it help if Wales had the ability to
fast-track compulsory purchase of land in order to facilitate
precisely the sort of buildings that Members in the committee have
been urging you to take on board? Would that separate out the
interests between those who are builders and those who are sitting
on land banks?
|
[279] Mr
Harris: It’s a big step, a big change from where we are
now, but, certainly, ultimately, if you have a known cost in the
building industry at the beginning of your project, you pass that
on to the landowner. Now, you get to a point where the landowner,
the costs you’re passing on to him, he’ll go,
‘Well, it’s not worth me selling the land, because
I’m not going to make the profit that my mate made last year
when he sold the land’, and that’s how it works.
|
[280] Mr
Simpson: It was really to explore where they are one and the
same person, and whether Wales would be best served if it had the
ability at some level of governance to compulsory purchase the land
in order to get into proper discussions with those of you who are
builders about the properties to go on it.
|
[281] Mr
Harris: Well, yes, if that would get you over the hurdle of
landowners not being willing to sell land because the relevant
level can’t be achieved, then, yes, clearly, that would
help.
|
[282] Alun Ffred
Jones: Okay, well, diolch yn fawr
iawn. Thank you very much, Mr Harris, for coming in and
giving us your evidence. It will be very useful in our
deliberations in our inquiry. Diolch
yn fawr iawn. Thank you very much. We’re moving
straight ahead to the next session.
|
11:35
|
Ymchwiliad i ‘Dyfodol Ynni Callach i
Gymru?’ Inquiry into ‘A Smarter Energy
Future for Wales?’
|
[283] Alun Ffred
Jones: We’re moving straight ahead to the next
session.
|
[284] Felly,
byddwn ni’n croesawu’r ddau dyst nesaf i’r bwrdd
mewn munud. Rwy’n croesawu yr
Athro Gareth Wyn Jones a Dr Caroline Kuzemko. A gaf i ofyn i chi, yn gyntaf, i nodi eich
enw a’ch swydd?
|
Therefore, we will welcome the next
two witnesses to the table in a minute. I welcome Professor Gareth
Wyn Jones and Dr Caroline Kuzemko. Could I ask you, first of all,
to give us your name and your position?
|
[285] Then we’ll
go straight into questions.
|
[286] Dr
Kuzemko: Thank you for inviting me here today. My name Dr
Caroline Kuzemko and I’m a senior research fellow at the
energy policy group in the University of Exeter.
|
[287] Professor
Jones: I’m Gareth Wyn Jones. I am an emeritus professor
in Bangor University. I was chairman—
|
[288]
Roeddwn i’n
gadeirydd—beth ydw i’n ei wneud yn siarad Saesneg?
[Chwerthin.] Roeddwn i’n gadeirydd is-bwyllgor ar
ddefnydd tir a newid hinsawdd i’r Comisiwn Cymru ar y Newid
yn yr Hinsawdd. Rydw i wedi ymddeol rŵan ac rwy’n cymryd
diddordeb yn y maes.
|
What am I doing speaking English?
[Laughter.] I was chair of the sub-committee on land
use and climate change at the Climate Change Commission for Wales.
I am now retired and I take an interest in this area of work.
|
[289]
Alun Ffred Jones:
Diolch yn fawr iawn. Yn amlwg, rydych
yn ymwybodol o’n hymchwiliad ni a’r gwaith yr ydym yn
ei wneud. Rydym yn chwilio am ffyrdd newydd o ddelio gydag ynni ac
arbed ynni ac rydym yn chwilio am arweiniad, a dweud y gwir, fel
pwyllgor, er mwyn i ni gael adroddiad a fydd yn rhoi llwybr neu her
i’r Llywodraeth nesaf. Dyna’r gobaith, beth bynnag. Mae
Llyr Gruffydd yn mynd i ddechrau.
|
Alun Ffred Jones: Thank you
very much. Obviously, you are aware of our inquiry and of the work
that we’re carrying out. We are looking for new ways of
dealing with energy and energy saving and we are looking for
guidance, really, as a committee, so that we can put forward a
report that will set out a path or a challenge for the next
Government. That’s the hope, anyway. Llyr Gruffydd will
begin.
|
[290]
Llyr Gruffydd:
Diolch yn fawr, Cadeirydd. Mae gen i
gwestiwn i’r Athro Gareth Wyn Jones. Yn eich papur chi, pan
rŷm ni’n sôn am y mix ynni neu am y
gwrthdaro neu’r angen i gael gwell cydbwysedd rhwng
cynhyrchiant mawr canolog a chynhyrchiant mwy lleol wedi’i
wasgaru, efallai, yn fwy cytbwys, rydych yn sôn bod yna ddau
ffactor allweddol, sef diffinio beth sy’n bosibl yn
dechnegol—ac rwy’n sylwi eich bod yn cyfeirio at yr
angen i greu rhyw fath o atlas ynni, fel y byddai rhywun efallai yn
ei ddisgrifio, a beth sydd yn bosibl yn nhirwedd Cymru—ac
hefyd yr elfen yma o beth fuasai’n dderbyniol i gymdeithas.
Efallai y byddwn yn gofyn i chi, i gychwyn, i sôn ychydig am
beth rych chi’n meddwl byddai’n helpu i drawsnewid y
ffordd y mae pobl yn ystyried eu cyfraniad nhw, beth y mae
ynni’n gallu ei gyfrannu a sut ddylai ynni gael ei
gynhyrchu.
|
Llyr Gruffydd: Thank you,
Chair. I just had a question for Professor Gareth Wyn Jones. In
your paper, when we talk about the energy mix or the need to get a
better balance between large-scale central production and more
local-based production that is dispersed on a more equitable level,
you say that there are two key factors, namely defining what is
possible technically—and I notice that you referred to the
need to create some sort of energy atlas, as some might describe
it, and what is possible in the Welsh landscape—and also this
element of what would be acceptable for society. I would perhaps
ask you to begin by talking a little bit about what you think would
help to transform how people perceive their contribution, what
energy can contribute and how energy should be produced.
|
[291]
Yr Athro Wyn Jones:
Mae yna sawl elfen. Yn y lle cyntaf,
y mwyaf lleol y mae’r ynni a’r mwyaf clos ydy’r
cysylltiad rhwng y bobl a’u hynni, y mwyaf derbyniol,
rwy’n credu, y bydd ynni adnewyddol iddyn nhw. Mae’r
ymateb yng nghanolbarth Cymru i dyrbinau, rwy’n meddwl, yn
adlewyrchu hyn—nid yw’r syniad eich bod chi’n
aberthu er mwyn i bobl eraill gael ynni gwynt rhad yn dderbyniol.
Yn Nenmarc, mae tua 90 y cant o ynni gwynt mewn perchnogaeth leol.
Rwy’n meddwl fod yr elfen seicolegol yn gwneud gwahaniaeth
mawr.
|
Professor Jones: There are
many elements. First of all, the more local the energy is and the
closer the connections are between the people and their energy, the
more acceptable, I believe, that renewable energy would be for
them. The response in mid Wales to wind turbines, I believe,
reflects this—the idea that you have to sacrifice for other
people to gain from wind energy is not acceptable. In Denmark,
around 90 per cent of wind energy is in local ownership. I think
that there is a psychological element there that makes a great
difference.
|
[292]
Yn ail, yn ein tŷ ni, rydym ni
wedi rhoi system ffotofoltäig ac ynysu a nawr rwy’n mynd
o gwmpas yn rhoi’r goleuadau i ffwrdd. Hynny ydy, mae yna
elfen personol—os ydych yn cynhyrchu eich ynni eich hun yn
eich tŷ eich hun, rydych yn cymryd lot mwy o sylw ohono.
Felly, mae’r elfen honno.
|
Secondly, we’ve put
photovoltaics in our house, and insulation, and now I go around
switching the lights off. There’s that personal element
there—if you produce your own energy in your own home, then
you will pay more attention to it. So, there’s that element
too.
|
[293]
Parthed beth yr ydym wedi’i
glywed o’r blaen, mae annog pobl i safio ynni yn effeithlon
yn economaidd a hefyd yn effeithlon yn amgylcheddol ac mae’n
rhan bwysig iawn o’r hafaliad. Beth yr wyf fi wedi bod yn ei
drafod ac yn ysgrifennu amdano—i ddod â ffigurau
gerbron, mae Cymru’n defnyddio o gwmpas 100 TWh y flwyddyn o
ynni; dim ond 20 y cant o hwnnw sydd fel trydan. Os ydym yn gallu
dod â’r 100 hwnnw i lawr i o gwmpas 60—ac
mae’r amcanion yn uwch yn yr Almaen ac yn
Nenmarc—oherwydd mae 60 TWh wedyn yn bendant o fewn ein
gafael ni efo ynni adnewyddol lleol Cymreig, a chanran helaeth
ohono yn dod o fewn yr elfen gymdeithasol leol. Rwy’n meddwl
fod hynny’n gweddnewid yr holl sefyllfa ac mae’n
ychwanegu at gyfoeth yng Nghymru, yn y trefi ac yng nghefn
gwlad.
|
Regarding what we have heard before, encouraging
people to save energy is an economically effective way of doing
things and is also environmentally effective, and it’s a very
important part of the equation. What I have been discussing and
writing about—in terms of figures, Wales uses about 100 TWh
of energy every year; only 20 per cent of that is as electricity.
If we can bring that sum of 100 TWh down to about 60—and
Germany and Denmark have even higher targets—because 60 TWh
is certainly within our ability in terms of having local renewable
energy in Wales, and for a large proportion of that to come from
that local and community level. I think that that would transform
the situation and would add to the wealth in the towns and the
countryside in Wales.
|
[294] Alun Ffred
Jones: Diolch yn fawr iawn. Caroline, do you want to
comment on this?
|
[295] Dr
Kuzemko: Well, I would just concur that energy efficiency
demand reduction, but also demand-side response—which is
flexibility of demand in energy—is going to be very, very
important in the transition, and I would think it should be the
most important strand of the transition to a smarter and more
sustainable economy. So, our research is focusing on governance
for, specifically, demand management—that side of things.
But, just to come back to the flexibility question, the more
dispersed your energy system is, the more flexible you need your
demand to be, so I think it’s important that we remember that
flexibility side of things as well. We’ve been doing some
work on electricity markets, actually, in particular, in the
US—in Pennsylvania and the New Jersey area—and they are
doing a lot of very high-level work to make sure that flexibility
is paid for in electricity markets in the way that supply would be
paid for. So, there is some work going on at the moment, but
it’s very progressive and it’s not happening in that
many places yet.
|
[296] Alun Ffred
Jones: Joyce.
|
[297] Joyce
Watson: Good morning, Professor Jones. I just want to pick up
on one point, if I can, that you made, about locally-produced
energy. You talked, particularly, about wind farms and, therefore,
being less likely to produce an objection. I’d like to ask
you to think about the voices that get heard—the loudest
voices, that is—who might not actually be that concerned
about paying more for their energy, because they might be able to
afford it, against the silent voices who might have greater
need.
|
[298] Professor
Jones: I’m certain you’re correct. When I was with
the Countryside Council for Wales, in the early days of wind energy
we did a survey in two communities in mid Wales. The person who
worked for me at the time was convinced that we’d find that
the great majority were tremendously anti-windfarms. It turned out
that 65 to 70 per cent—I don’t remember the exact
number—were all in favour. But, there was a minority that
made a big noise. So, there is an issue there of the silent
majority being far less antagonistic to them than you would
anticipate from the media. The figures are available; CCW had these
surveys done.
|
[299] Joyce
Watson: Can we have them?
|
[300]
Alun Ffred Jones:
Oeddet ti eisiau dod yn ôl,
Llyr?
|
Alun Ffred Jones: Did you
want to come back, Llyr?
|
[301]
Llyr Gruffydd:
Na. Mae’n iawn.
|
Llyr Gruffydd: No. It’s
fine.
|
[302] Alun Ffred
Jones: Julie. Sorry, Russell—on this point.
|
[303] Russell
George: I take your point about a silent majority, but there
were 2,000 people standing outside the Senedd when the petition
took place. The point I’m making, though, which is relevant,
is that perhaps it’s not so much an anti-windfarm issue,
it’s the infrastructure that comes with it. I think if the
question is put—. I think, perhaps, the issues in mid Wales
largely revolve around people not being made aware of what this
actually meant for the community. I think that’s the
point.
|
[304] Professor
Jones: I’m old enough to recall the electricity coming
into our community in Denbighshire—Llansannan—and the
excitement of the 1950s when the first pylons were put
up—‘Modernisation: great!’ Nowadays, the reaction
is very different, because we now see it as an imposition, which we
didn’t initially.
|
[305] I think what
people don’t realise, which I’ve tried to emphasise, is
that when we decarbonise our energy, we’re also going to
increase the amount of electricity we use. Even if we become more
efficient in electricity—and there’s obviously big
potential—then, if we decarbonise transport, which we have to
do because it’s a much bigger element than electricity now,
then we’re going to increase the demand for electricity. Now,
the more that is satisfied locally, then the less new
infrastructure we have to build. But then, as you say, you’ve
got to then have the smart grid management systems to go with it.
That’s why it’s an integrated
vision—whole—which you can follow, but people
don’t appreciate that. I don’t think the average punter
realises that we’re going to have to increase the amount of
electricity we use in order to decarbonise our energy system, and
the implications of that in terms of infrastructure. That would be
a very useful thing to be made public.
|
11:45
|
[306] Alun Ffred
Jones: Llyr.
|
[307]
Llyr Gruffydd:
Mae’r approach
integredig yma yn sicr yn angenrheidiol, ond, wrth gwrs, nid
yw’r pwerau fan hyn i allu gweithredu’r wleidyddiaeth y
tu ôl i hynny ar lefel integredig, ac felly mae’n rhaid
cydnabod, tra bod y grid heb gael ei ddatganoli, a tra bod y
mecanweithiau cyllido heb gael eu datganoli, bod y dasg, os nad yn
anodd, bron iawn yn amhosibl. A fyddech yn cytuno â
hynny?
|
Llyr Gruffydd: This
integrated approach is certainly vital, but the powers aren’t
in this place to be able to implement the politics behind this in
an integrated manner, so we have to acknowledge that, whilst the
grid isn’t devolved, and whilst the planning mechanisms are
not devolved, then the task is, if not impossible, very difficult.
Would you agree with that?
|
[308]
Yr Athro Wyn Jones:
Ydy. Mae yna wendidau yn y setliad
presennol.
|
Professor Jones: Yes. There
are weaknesses in the current settlement.
|
[309]
Llyr Gruffydd:
Ie, ond y pwynt yr ydw i yn ei wneud,
wrth gwrs, ydy bod yn rhaid i ni weithredu o fewn—. Gallwn ni
fynegi uchelgais, o safbwynt beth yr ydym eisiau ei gyflawni, ond
mae’n rhaid i ni, fel pwyllgor, weithredu o fewn y setliad
sydd gennym ni, ac felly rydym ni’n chwilio am atebion y
gallwn ni eu delifro yn y cyd-destun presennol.
|
Llyr Huws Gruffydd: Yes, but
the point that I am making, of course, is that we have to act
within—. We can express a vision in terms of what we want to
achieve, but we, as a committee, need to operate within the
settlement that we have, so we’re searching for answers that
we can deliver in the current context.
|
[310]
Yr Athro Wyn Jones:
Oes, ond rwy’n credu bod yna
enghreifftiau; roeddwn yn siarad gynnau am ryw gwmni Robin Hood
Energy yn Nottingham sydd efo grid lleol, ac roeddwn yn gwrando
gynnau ar y sefyllfa yn yr Alban, lle mae yna gwmni wedi’i
osod i fyny i wneud grid lleol. Nid wyf yn meddwl eich bod yn
ddi-rym, ac rwy’n credu bod yna lawer iawn y gallwch chi ei
wneud yn lleol. Cymerwch Llŷn, er enghraifft—mae yna
awydd i wneud hyn ym Mhen Llŷn ar lefel leol, a buaswn yn
meddwl bod modd rhoi anogaeth iddyn nhw a lot o lefydd
eraill, nid jest mewn
ardaloedd gwledig ond mewn ardaloedd trefol, hefyd. Rwy’n
meddwl bod yr arweiniad yr ydych chi’n ei roi, a dweud
‘Dyma’r dymuniad’, ac wedyn annog cymdeithasau a
chymdeithas leol i wneud pethau—. Mae yna ormod o falu awyr.
|
Professor Jones: Yes, but I
do think that there are examples; I was talking earlier about the
Robin Hood Energy company in Nottingham that has a local grid, and
I was listening earlier to the situation in Scotland, where a
company has been set up to have a local grid. So, I don’t
think that you are without powers, and I think that there’s a
great deal that you can do locally. Take the Llŷn peninsula,
for example—there’s a wish to do this in Pen Llŷn
on a local level, and I would imagine that that would be true of
many other places, and not just rural areas but urban areas, also.
I think that the leadership that you give, and if you say
‘This is what we wish to do’, and then encourage
organisations and society to act—. There has been too much
talking, basically.
|
[311] Alun Ffred
Jones: Caroline, would you like to add—
|
[312] Dr
Kuzemko: On the point of leadership, I do think that it is
incredibly important. I know that one of your questions was around
whether you should set targets or not. Although I think that
targets on their own are reasonably useless, because you need the
policies and the strategies underneath to drive the delivery of
those targets, I think that if Wales were of a mind to, some
specific targets around efficiency and demand reduction, like you
have in California, like you have in France, like you have in
Germany and like you have in lots of places, would give some sign
of leadership and the kind of direction that you want to go in. I
think that that’s very important, but, obviously, underneath
that, you have some pretty complex layers, don’t you, because
you have all sorts of GB-based policies and rules and regulations,
many of which probably need to be changed if we’re going to
really meet a proper low-carbon future—or, I should say, a
sustainable future.
|
[313] So, I think
it’s the bit underneath the targets, where there are layers
and layers of complexity. Our group has been working for three
years now on analysing GB rules and regulations around electricity
and heat markets. There are five of us, and we’re just
beginning to get beneath the surface of it, but it’s an
incredibly dense and complex landscape, and there’s issue
after issue that you find as you go through. But, for me, the main
problem is standing back out of that and thinking about the
question of leadership, which I think we don’t have on the GB
side at the moment. I think Scotland is trying to show a little
more leadership—I think Wales could do the same thing.
Cornwall has got an energy element in its devolution Bill, which I
think is quite interesting, and other local authorities—.
Robin Hood Energy in Nottingham—that’s making a
statement. I think most people understand the message behind that
statement.
|
[314] Alun Ffred
Jones: I think you mentioned in your evidence that targets are
useful, but then you have to back that up with specific strategies.
I think you referred to Germany in that; am I right?
|
[315] Dr
Kuzemko: Well, yes; I guess German energy governance is pretty
well progressed now. So, they are at a stage where they are having
to make phase 2-type decisions, if you know what I mean. So, they
have so much distributed renewables, and the ownership of it so
dispersed. So, they’re having to make new policies about what
to do about electricity markets that have had zero wholesale
prices. It is very uncomfortable for the big four, but the
Government don’t mind that it’s uncomfortable for the
big four because their direction is set to 2050 on all sorts of
levels and targets. What they do that’s interesting that we
don’t seem to do here at the GB level is tie their policies
to the targets. So, you’re running with a policy, it’s
working for three, four or whatever-it-is years, but once you see
that there is a real change in the markets, you’re going to
have to address the policy changes because the target has to be
met, which is why they’ve been doing so much work on coal
recently and trying to phase that out, albeit, obviously, they
haven’t delivered what progressive energy groups wanted in
Germany, but they have made that step and they are addressing it.
So, the policies are always linked to meeting the targets.
|
[316] Alun Ffred
Jones: Jenny.
|
[317] Jenny
Rathbone: Given that the UK Government—the Department of
Energy and Climate Change—seems to have dismantled most of
the green incentives, do you think that Wales has now missed the
boat in terms of getting citizens to engage in community energy
projects and that, therefore, the house as power station—is
that another way forward, because of the demonstration effect
there? Or how do we seize the opportunities of community energy
without subsidies?
|
[318] Dr
Kuzemko: Yes, I mean, clearly, the changes are incredibly
un-useful, particularly at that sort of community and small-scale
kind of level. So, what the solution for that is in the medium term
is unclear to me, definitely. But if you move the emphasis back on
efficiency—. I mean, that’s the distributed energy side
of it, isn’t it, but if you move the focus back on energy
efficiency, I think that there is more possibility in that kind of
area, and I think there’s more possibility in terms of just
building up a bit of trust again. If you want
consumers—they’re not consumers, they’re voters;
they’re householders—. If you want them to become more
involved in what’s going on, you need to build that trust
element back up again.
|
[319] There are some
energy companies that haven’t been very helpful on the trust
front who have very low customer satisfaction. You have large
quantities of customers sitting on standard variable tariffs that
are much higher than their other tariffs, so they’re paying a
much higher percentage of the cost of what’s been done so far
in terms of changing transmission, distribution, policies, et
cetera. But there are some companies that are coming through now
that are more interesting. Some of them make a profit but they have
a specific ethical element to the business, like Good Energy or
Ecotricity, who only sell renewables, obviously on the electricity
side.
|
[320] Then, you have
some not-for-profits emerging on the local authority level, which
are very interesting. Some work through a company called OVO, who
have something called a white label contract. OVO is the company
that has the formal agreement with Ofgem, and they have to take on
the full burden of the supplier licence and the codes and, believe
you me, it’s a very big burden and it has been a barrier to
entry. So, OVO have that relationship with Ofgem, but then the
local authority goes through kind of onto OVO’s books in
terms of their customers and OVO provide certain services, but the
local authority can brand it as Robin Hood Energy, although it
hasn’t used that contract. Robin Hood have their own full
supplier licence with Ofgem. But other local authorities that are
going through OVO can decide on the tariffs, they can decide not to
make any profit, they can decide how they want to brand it in terms
of affordability for the people in the community. So, I think that
builds more trust and I think that gives customers more interest
in, ‘Oh, well, actually, why am I sitting with this big six
guy when I could be with my local community and paying considerably
less money per annum?’
|
[321] Jenny
Rathbone: How does that get round the requirement—? OVO
has to sell it to the national grid, and then the national grid
sells it back to the distributors who give it to the
customers—
|
[322] Dr
Kuzemko: So, these are just supply retail contracts.
|
[323] Jenny
Rathbone: So, is OVO able to both receive the energy and sell
it back to the designated community?
|
[324] Dr
Kuzemko: OVO does all its buying on the market, so it’s
not going to be a generator at all. It’s just a retailer, so
they just go to the markets for their supply.
|
[325] Alun Ffred
Jones: Julie.
|
[326] Julie
Morgan: Jenny has covered the question I was going to ask,
actually, but you spoke about gaining trust and I think you
mentioned the most vulnerable customers in your evidence, so how do
you think the trust can be gained of those very vulnerable
people?
|
[327] Dr
Kuzemko: I think that getting the most vulnerable people off
the types of tariffs that are most harmful would be a really good
first step. So, some of them are on Economy 7 meters, and
they’re paying pre-payment tariffs, which are more expensive
for them. So, getting those—. I think what you need for that
is knowledge about who all these people are. I think that that has
been not very well shared by energy companies. So, I think the
entrance of these new independents to the market is interesting in
that way because we’re going to be, through them, finding out
more about who the vulnerable customers are. But local authorities,
I think, have to be incredibly useful in providing decent evidence
of who the vulnerable people are, getting them off the pre-payments
and putting them on a smart meter. Soon, we’re all going to
have to have smart meters, but that would sort of get around the
fear that energy companies have that they’re not going to be
paying. So, smart meters would just replace the Economy 7 meters
and, obviously, getting vulnerable customers off the standard
variable tariffs, because a lot of them are just people who
haven’t switched, even since liberalisation. So,
they’ve just sat on these much higher tariffs. We need to
know who these householders are.
|
[328] Julie
Morgan: So, you see local authorities as being key in all of
this.
|
[329] Dr
Kuzemko: Yes, I do. Absolutely. I know in Cornwall, on the
energy efficiency side, part of their devolution deal has been to
take back control over how the ECO is targeted and which households
are approached, because they don’t feel that the nationally
held datasets that the GB ECO policy has been based on have been
particularly accurate for them. So, they’ve taken back
control over that so that, through local authorities and
communities, they can target the right households.
|
[330] Joyce
Watson: Can I ask a question about smart meters?
|
[331] Alun Ffred
Jones: Just a minute—just to come back on that issue in
Cornwall, what have Cornwall done?
|
[332] Dr
Kuzemko: It’s part of their devolution deal.
They’ve just done a devolution deal. They just made the
comment that they felt that the nationally held datasets that the
ECO uses to target particular households was not very accurate for
their area. So, they just decided that they would take back the
targeting—which households would be targeted through the
ECO—using their own local knowledge, and local authorities,
obviously, to make those decisions.
|
[333] Alun Ffred
Jones: What’s the situation in Wales? Does anybody know?
No. Okay. Joyce.
|
[334] Joyce
Watson: I just want to—. Perhaps it’s my
misunderstanding—you talked about putting people on smart
meters as being a solution, probably so that they can control what
they’re using. I have a problem with smart
meters—I’ll put it on the table now—because they
also have a choice, then, of switching things off because they know
their usage and they might be running short of money. So, I would
like you to expand how you avoid that self-disconnection, if you
like, because you’re switching everything off in any case. I
can’t see that it’s useful.
|
[335] Dr
Kuzemko: Well, I referred to it just in the case of getting
customers off pre-payment meters. I mean, the argument that energy
companies put forward is that you have to have the pre-payment
meter because otherwise certain households will default and not
pay. So, I was just trying to get around that argument that they
might put forward by suggesting a smart meter instead. I
don’t have an answer, I’m afraid, to what you’ve
identified, which may well happen, of course, in some
instances.
|
[336] Joyce
Watson: It will happen. There’s no doubt about it. When
people know that they’re running out of money they’re
going to switch stuff off. Anyway, that was my question, but
you’ve given me the clarity. Thanks.
|
[337] Alun Ffred
Jones: William Powell.
|
[338] William
Powell: Thank you, Chair. Moving to the issue of public
investment, what is the scope, in your view, for an injection of
public investment to support the development of innovation in terms
of encouraging local renewable energy generation?
|
[339] Professor
Jones: That’s a big question. It’s at various
levels, isn’t it? There is the level of the actual control of
the grid, smart grids, energy storage and all these other things
that are coming on board, and we don’t have a lot of
expertise in Wales. What expertise there is, it tends to be in the
companies. I would like to suggest that it would be very desirable
to set up a small centre of technical expertise—one in the
north, say, in Glyndŵr, and one in the south, say, in
Swansea—for grid management; and in the fullness of time,
energy and electricity storage as part of that. So, I think there
is a case for setting up units that provide expertise at a
technical level. Also, I think we lack advisory networks for people
wanting to set up community schemes. There are many more advisers
available in Scotland than there are in Wales. So, that would be
useful. The other useful thing would be to decrease the
bureaucracy, so that there was a very clear policy steer that
community energy schemes should not, by default, be disputed, but
should if possible be agreed, whereas the situation now is rather
the opposite. There’s a rather negative framework for
action.
|
12:00
|
[340] William
Powell: Would you welcome a fresh technical advice note on that
very issue, to give local authorities confidence?
|
[341] Professor
Jones: Yes, I would. There are specific issues. There’s a
famous issue in Wrexham where they were trying to put up an
anaerobic digester—Calon Wen, the milk company. They were
wanting to bring in food waste to increase the energy density, and
they’ve had endless problems with this, because the local
authority then deemed it was an industrial process to bring in food
waste to supplement an anaerobic digester using slurry from an
organic farm. That was refused initially, and this is just a lack
of imagination in the system. So, I think technical advice saying
that this is the Government policy would be very useful.
|
[342] Dr
Kuzemko: Are you asking about the role of public money,
generally, in energy transitions or the scope for it, currently, in
GB?
|
[343] William
Powell: I think the desirable level to actually make a
meaningful difference in the future, rather than what the case is
now.
|
[344] Dr
Kuzemko: Right. I think that—. I don’t know what
the overall level should be. I mean, you see quotes everywhere,
don’t you, as to what it should be, but I do think that the
focus on efficiency and demand reduction and flexibility would be
the cheapest route, because then you don’t have to do so much
spending—big transmission spend—and you don’t
have to have huge new nuclear power stations that are very
expensive. So, I think that a focus on that route would lower the
overall amount needed, but I would also make the point—and I
know that it’s difficult in an era of fiscal
austerity—that the public sector can access funding at rates
lower than commercial rates, and that was the problem with the
Green Deal, frankly, because they put it at commercial rates and
people didn’t take it up; it just didn’t work.
Obviously, the comparison is Germany, and I hate to hark back
again, but their sustainability bank lends at 1 or 2 per cent for
those kinds of, you know, basic insulation et cetera.
|
[345] Alun Ffred
Jones: Is that backed by Government, then? Is that how
it’s so cheap?
|
[346] Dr
Kuzemko: Kind of. It was originally, but they are directed by
Government to lend in sustainability projects. They are also
directed to lend at lower rates and, to be honest, rates are pretty
low in Germany at the moment, anyway. They are also directed to
recycle any money back into sustainability projects, so as moneys
are paid back in, they must be recycled out again and to more
sustainability projects.
|
[347] Alun Ffred
Jones: So, was that bank set up specifically for that
purpose?
|
[348] Dr
Kuzemko: No, no. It was set up a long—. It was a Marshall
plan thing; it was set up ages ago. It just happens to be
incredibly well capitalised.
|
[349] William
Powell: That’s a bizarre idea [Laughter.]
|
[350] Dr
Kuzemko: Yes. They could have done it here.
[Laughter.]
|
[351] William
Powell: Just one other issue, Chair: do you think that the
creation of energy parks, backed by public investment, would also
have a significant contribution to make?
|
[352] Professor
Jones: I’m not sure. I’m not sure the record
of—. What do you mean by an energy park?
|
[353] William
Powell: I’m aware you’ve got the infrastructure in
place to have a diverse mix of different renewables in a particular
zone where you’ve got the appropriate grid infrastructure,
and, potentially, a local settlement and planning regime that
facilitates it.
|
[354] Professor
Jones: I don’t quite know how to answer that, really,
because it seems to me that the characteristic of renewables is
that they are specific for localities. So, where you would put
micro-hydro is not necessarily where you would put solar. Well, any
energy park would have to be a very extended concept for it to make
any sense at all, so, not just locating them all in one
place—
|
[355] Alun Ffred
Jones: Perhaps we could change the national parks into energy
parks. [Laughter.]
|
[356] Professor
Jones: That would be an excellent idea. [Laughter.]
But, to go back to the point you were making, within your
constituency, sir, there’s a very good example of this
business of the rate at which you can loan money. With the Hafod y
Llan scheme, the National Trust centrally was loaning the money to
the scheme at 5 per cent, but if you look at the scheme in
Abergwyngregyn, they are actually having to borrow money much more
expensively for a community scheme. I think they’re paying 7
per cent—and I’m a shareholder, so I’m getting 7
per cent—which is ridiculous, really, for a community
micro-hydro scheme. They should be allowed to borrow much more
cheaply. The same was true when we talked about anaerobic
digestors. When we talked to the farmers, they were prepared to
borrow money on the commercial market, but their problem there was
that they needed some guarantee system, and if the Government would
act as guarantors, then they would be prepared to make the
investments. So, there are lots of ways in which Government, at
very modest cost, can actually help with the processes you’ve
been describing.
|
[357] Alun Ffred
Jones: Who wanted to come in there? Russell.
|
[358] Russell
George: I think you mentioned earlier about the planning
process being a barrier as well for small-scale energy schemes. Am
I right that you said that?
|
[359] Professor
Jones: I did say that. I’ve said it before.
|
[360] Russell
George: I must have read it. Can you just go a little bit more
into detail, now? Is it the lack of experience of local
authorities, is it a lack of political will, is it third-party
organisations, like Natural Resources Wales? What are the
obstacles, specifically?
|
[361] Professor
Jones: I think the obstacles vary under different
circumstances. I had a colleague down in the Teifi valley who was
trying to restart an old water mill, and I lodged correspondence
with this committee on the number of permissions that had to be
achieved in order to restart a windmill in a river flowing into the
Teifi. I can tell you now that they gave up, even though there was
an existing installation there, because of all the permissions that
were required. They made it very difficult. But, if you talk to the
Anafon scheme, the people in Abergwyngregyn, they will tell you
that Natural Resources Wales was extremely helpful, and the problem
was not with Natural Resources Wales in that case, the problem was
with the lawyers and other people—. They had to go to
Shresbury to get a legal company to give them advice, and they said
they were incredibly slow and incredibly inefficient.
|
[362] Alun Ffred
Jones: Be very careful what you say; we have a lawyer here.
[Laughter.]
|
[363] Professor
Jones: Oh, yes, lawyers are always reasonable. I’m sorry,
I missed out that. [Laughter.]
|
[364] So, it depends
on circumstances.
|
[365] Russell
George: But how do we overcome that? It’s too big a
question, really, isn’t it?
|
[366] Professor
Jones: As I understand it, in Scotland, with small schemes
below 50 MW, there is a presumed consent, and that would be very
helpful because it’s a signal, isn’t it, of presumed
consent for a small micro-hydro scheme? There’s a presumed
consent, unless there is a very specific reason for saying,
‘No, there is another important environmental interest that
has to be protected’.
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[367] Russell
George: That’s usually what happens; that’s usually
the obstacle that comes before—
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[368] Professor
Jones: It’s the other way around at the moment. There is
a presumption that, ‘We will not consent’. So, there
are things like this that you could do.
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[369] Russell
George: The other question I had, on a separate note, was: you
mentioned advisers as well, and that we need more advisers, but who
should facilitate that? Should that be local authorities, the Welsh
Government, or NRW? Who should facilitate that advisory role to
community groups?
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[370] Professor
Jones: I don’t have a strong view, but I would have
thought that consortia of local authorities would probably be the
best location for them—so, work through the local
authorities. But, that’s just a thought. I don’t know
what you think.
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[371] Dr
Kuzemko: I personally think that a transition to a
low-carbon future is a very long-term and quite complex process,
and the more knowledge capacity that you have to make sure that
that process goes ahead—. There’ll be balances that
will need to be struck all the way through, and you need to
understand both sides of each argument as each situation arises.
You see this in countries that are a little bit further down the
road—the process can be quite political. So, the more
knowledge capacity that you have at your hand, so that you can say,
‘No, I don’t accept that argument because we happen to
have our own information that says x or y’, and it also has
to do with the availability of data, which is something that
you’ve talked about. And in Denmark, for example, they have a
data hub and all data to do with energy—market supply,
demand, transmission, distribution, everything—is publicly
held in the data hub. Clearly, you have to have some expertise to
access the data and understand what it means, but I would recommend
that you have as much advisory as you can possibly afford to have.
I would also recommend that you work with non-government
organisations and universities and institutes that are of a like
mind and who also want to see a more progressive future.
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[372] Alun Ffred
Jones: What does the data hub in Denmark provide? What does it
hold?
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[373] Dr
Kuzemko: All the information about how the electricity and gas
markets are trading, prices, demand, where demand is coming from,
where supply is coming from—all the nitty-gritty, tiny little
detail-y things that you need to know if you want to make some big
changes.
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[374] Mr
Simpson: Real-time information?
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[375] Dr
Kuzemko: I don’t know if it’s real time or not, but
I can check for you.
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[376] Alun Ffred
Jones: Joyce, you wanted to ask, then Jeff.
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[377] Joyce
Watson: Following on from that and, indeed, from the question I
was going to ask, if you’ve got those real-time data—if
they are real-time data—about where energy exists and
where it’s needed, would it be of value—I’m
trying to link this to what we were doing in the earlier part of
our inquiry on passive housing or any other form of
energy-efficient housing—would there be an advantage in
linking these two things together, and how to proceed with that?
Let’s take an example: we’ve got a local energy
provider that’s looking at producing energy and keeping
energy in local hands. Should we link that up at the same
time—coming back to what you said earlier—with a policy
that says ‘And we want low-energy-use housing or
zero-energy-use housing’, so that the two co-exist?
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[378] Dr
Kuzemko: I think that would be sensible, but I suppose the
point would be just to know how the demand profile is changing
within each locality. So, if you’re really talking about this
distributed or dispersed energy future, it will make much more
sense if you know what your supply is, which will actually depend
on the weather in many instances. So, it will be about forecasting
the weather—that’s what they’re finding out in
Germany. All the distribution network operators now are just
becoming weather forecasters, because they need to know
what’s going to be happening in terms of their
systems—the load they’re going to be carrying. So, I
think you would need to have—. I agree completely with the
zero carbon homes idea and moving forward in that direction, but I
think you will need to know what your supply is, but also what your
demand is going to be at points in time during the day, and
particularly those peak kind of hours where you’ll need the
flexibility.
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[379] Alun Ffred
Jones: But, that’s already known by the National
Grid.
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[380] Dr
Kuzemko: Yes, which is a private company.
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[381] Professor
Jones: I agree totally, but there are two other elements in the
equation. One, of course, is energy storage. As you know, the
companies are now coming in with new battery systems that can be in
houses, but you also need energy storage on a bigger scale than
that. Of course, we’ve got the biggest one in Dinorwig, and
that is important.
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[382] And the other
thing, which I hadn’t appreciated until recently from talking
to engineers, is that there is a very important consideration,
which is the inertia in the system. So, you actually have to have
large generators, because if you have lots of photovoltaics, for
instance, once the sun goes in the electrons stop flowing. Whereas
if you have a big generator, it still goes round and still
generates an inertia in the system, which is actually important to
keep the grid going. So, there are technical issues involved in
this at both a local level and a macro, international level,
because it’s pan-European at this stage. So, there are these
issues there.
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[383] The other thing
we haven’t talked about at all, to date, is transportation
and moving to electrical cars, which is another part of the
equation, which is why you’ve got to have a very large-scale
plan that you’re following over a 10 to 20-year period. And
then the thought is that the car batteries will form a storage
system onto which you can draw, let’s say in the late
evening, when the commuters are home, and then you use the
batteries as a storage system.
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12:15
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[384] So, it’s a
completely different way of looking at energy. Britain is, you
know, I almost say light years behind, but that’s a little
bit unfair; we’re very much behind the curve compared with
many other countries. You visited Germany, didn’t you, as a
group, so you’ve seen the difference?
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[385] Joyce
Watson: Thank you.
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[386] Alun Ffred
Jones: Jeff.
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[387] Jeff
Cuthbert: Yes, I think this is an opportune time. You mentioned
knowledge. I want to talk in terms of knowledge and skills. You
will have heard me—I think you were in the room when I asked
the Home Builders Federation the question. In your view, do you
think we have a significant skills gap in Wales in terms of these
new technologies? Do you think that higher education, further
education, are properly geared up for it? I remember when we went
to the European Commission; the view was that, generally across
Europe, there are skills gaps, although there are some very good
projects under way. What is your view on where we are in terms of
the ability to physically deliver these technologies?
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[388] Dr
Kuzemko: I’m afraid I can’t comment specifically on
Wales, because I don’t know what you have in place here in
terms of skills and training. And, I can only speak anecdotally
about GB. I live in the midlands and we recently built a
low-emissions house, but also—
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[389] Jeff
Cuthbert: A what, sorry?
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[390] Dr
Kuzemko: A low-emissions house. So, we put all sorts of fancy
stuff into it, and now, six years on, when we need anything to be
maintained in our house, the regular boiler man or whoever will
come and go, ‘I tell you what this is’—
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[391] Jeff
Cuthbert: And whistle between their teeth probably.
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[392] Dr
Kuzemko: ‘And all because the climate’s
changing’, kind of thing. [Laughter.] So, we have not,
as yet, found anybody who can understand the system that has been
put in. So, I do think the maintenance-type supply chains around
both the efficiency side, but also the renewable side, are lacking
in the UK. It’s partly because supporters have come and gone,
and policies have come and gone, and there hasn’t been enough
consistency in terms of the message. I know that a lot of the
critique of energy efficiency policy is that it hasn’t
established a really proper market. When you have a proper market,
then you have the costs of these things coming down as well. We
have wet solar, so solar panels for heating and hot water, and we
wanted to put electricity solar on as well, but the cost of it is
so high, and when I talked to people in Germany who were looking at
doing the same kind of thing, it was about half the cost. And
it’s not the cost of the panel; it’s the cost of all of
the supply chain that goes around it—the skills and the
expertise. So, only on an anecdotal level, I would suggest that we
are quite far behind.
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[393] On that question
of skills, it makes me think of jobs, and what surprised me when I
went to Germany is that I had assumed that the jobs were on the
renewable side, the solar in particular, where they had quite a
strong industrial policy around that, but the jobs were on the
energy-efficiency side. So, they had hundreds of thousands of new
jobs around insulation, the supply chains around it, et cetera, et
cetera. It’s a proper jobs thing, and if you want to get
people buying in to a change, you do have to show that there can be
employment around it as well, and you need the skills and the
training for the employment.
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[394] Janet
Haworth: I have one question, which comes to mind from what the
Home Builders Federation was saying, and it was almost a nightmare
scenario when I think about it. They were talking about solar
panels; they were talking about how long a solar panel will last,
and that when you need to replace those solar panels, you will need
to replace a substantial part of your roof. Now, today’s
average price for replacing a roof is about £8,000. It does
make me think that, in a few years’ time, will we see people
whose solar panels are no longer efficient, who can’t afford
to replace their roof, and will they be in even more serious fuel
poverty than they were at the beginning? Is that something we need
to think about as a kind of unintended consequence? These solar
panels do not have a significant lifespan.
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[395] Alun Ffred
Jones: I don’t think—I think I’m correcting
you—. I think he referred to the SOLCER experience of perhaps
in the future having to replace the whole roof. I don’t think
replacing the panels actually means that you have to replace the
whole roof.
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[396] Janet
Haworth: Well, I was just interested in your views on this.
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[397] Professor
Jones: Well, there are different types of installation.
We’ve put PVs on our house. We were an early adopter, so we
had no grants at all—or, hardly any—so, we’ve
been unlucky, shall we say. But, on our PVs, there’s an
under-tray of plastic below, and replacing those PVs doesn’t
require replacing the roof. There are other systems, which are
actually better, in which the PVs are raised above the roof,
because solar panels work better at lower temperatures, so you
don’t want to actually have them embedded in the roof, if
possible—from a photochemical perspective now—you want
them raised so there’s air circulation. I’m sure
that’s a solvable problem. I don’t think it’s a
technical issue that should worry this committee, and I’m
sure a competent technician could solve it quite readily so
there’s an easy replaceability. He was making a lot of it. I
was listening to him, and I thought, ‘Come off it’.
It’s not a big problem.
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[398] Alun Ffred
Jones: We’re coming to the end of our—.
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[399] Professor
Jones: Can I just say about the training? It’s
fantastic—Coleg Menai have put all this work into training
people up for nuclear; there’s no equivalent on the renewable
energy side. If we put a fraction of the effort that they’ve
put, in Anglesey, into training up for nuclear into renewables,
I’m sure the return would be much greater.
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[400] Janet
Haworth: Could I just come back on that? Because I think
there’s also an opportunity for cross-skilling, isn’t
there? We shouldn’t really just be talking about nuclear
engineers; we should be talking about energy engineers who are able
to work across different disciplines.
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[401] Professor
Jones: Yes. Glyndŵr have a course on renewable energy as a
degree, but the take-up has gone down because of the policy
vacillations that were referred to by Mr Cuthbert.
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[402] Janet
Haworth: But is it possible to do that cross-skilling within
the energy field? I’m talking about producing energy
engineers.
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[403] Professor
Jones: There’s a lot one could do. This is why these
meetings are so important, because you can set a pattern of what
should happen.
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[404] Alun Ffred
Jones: Caroline, obviously, was in agreement with you on your
first point so I won’t ask her the same question. Now then,
before you leave, I want you to give us an indication of what you
think should be done in order to achieve the changes we are seeking
to outline in our report. But Alan wants to come in on
a—.
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[405] Mr
Simpson: I’ve just got two questions, Chair, and one sort
of separate point. For Caroline, you mentioned the RobinHoodenergy
company—they’re going to give evidence to the committee
a bit later in the process—and we’ve also heard about
Our Power Energy in Scotland, but Wales actually has a model of a
not-for-profit utility company in the form of Welsh Water. Do you
think there’s a case for recommending an Owain Glyndŵr
energy company, a not-for-profit, Welsh holding company, that
attempts to do exactly what is being done in other parts of the
country? And, if so, would it also be helpful if the Welsh
Government were in a position to set carbon budgets in the way
that, in Germany, it’s not just about having more localised
powers, but the duties to meet national targets within local
frameworks too? So, that would be my question for you.
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[406] Dr
Kuzemko: Yes. Of course, in Germany, you have federal targets,
but then, each Land has its own set of targets too, and some
Länder are more progressive and some are, frankly, not very
progressive at all. So, there’s plenty of precedent for
having targets at different kinds of constitutional levels. I
wouldn’t personally just set carbon budgets, as in emissions
reduction budgets, but I would have targets around how much less
you want to consume, more specific targets than those—which
is what a lot of other countries are doing now, they’re being
more specific about—. Having emissions reductions as a target
could mean a hundred different things, but if, below that, you say,
‘Well, actually, what this is going to mean for us is
distributed resources, less consumption or more flexible’, or
whatever you want it to be—I would be more specific at that
kind of level.
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[407] Mr
Simpson: Perhaps it would be helpful if you just let the
committee have a shopping list of those specific things.
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[408] Dr
Kuzemko: Sure. Yes. I’ve got some of them here, but I can
send some more.
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[409] Mr
Simpson: And my question for Professor Jones. I have to
confess, Chair, I had the privilege of a breakfast conversation
earlier, which was fabulous for me. You made the point—
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[410] Alun Ffred
Jones: So, you’ve corrupted the witness.
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[411] Mr
Simpson: I think I must have done, yes, or vice versa.
[Laughter.] You made the point in one of your opening
comments about the benefits to society. When coal was king, people
who produced the coal got free coal. Coal lorries rolled down the
street and you—. Is the point that you’re making a
compelling case for Wales to claim the right to have local energy
markets, where the energy produced in a locality isn’t just
owned by the community of shareholders but can be sold back to the
community at lower prices? So, in terms of steps going forward, is
that something that the committee should look for? My second part
of that question to you is: across the EU there are now 6,500 smart
cities aiming to become their own virtual power stations and really
drive that transformation agenda. Would you just like to mention to
the committee something of your thoughts about this eisteddfods
idea for Wales?
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[412] Professor
Jones: It’s partly that, but also there’s another
macro-concern. I’ve great sympathy with what you’re
saying, but it appears to be at a UK level that the policy is to go
nuclear and to use foreign capital, to which we then have to pay
interest for the next 30 or 40 years, and so you’re tying in
an extraordinarily expensive system when, in fact, the technology
on the renewables side is actually getting more and more efficient
and more and more cheap. So, that seems to me a curious policy,
shall we say.
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[413] Mr
Simpson: But what is it that this committee should be
recommending that Wales does?
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[414] Professor
Jones: I would set up two or three pilots that you would fund
around Wales, some rural and some urban, where you would look at
the practicality of a local grid and a local municipalised grid
company. I’m not sufficient in technical expertise to know
where those should be, nor which communities are likely to really
react to it. Possibly Wrexham, when they had the PV
factory—Sharp was there. If you go to a Wrexham housing
estate, it’s full of PVs, which is great. So, I would go for
two or three communities in Wales and then have, as we talked over
breakfast, an eisteddfod-type situation—a competition around
how others could emulate that and seek both efficiency and
generation within their own communities, or closely adjacent to
those communities. But start with two or three pilots to see what
could work and what might then take off.
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[415] Alun Ffred
Jones: Okay. That’s your parting shot. Do you want to
leave us with a last thought, Caroline?
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[416] Dr
Kuzemko: It just reminds me of the old municipal services of
Victorian times, when municipalities provided bundled water, heat
and light services. There is precedent for this, and there’s
a movement back towards that also in Germany at the moment. So, I
think it would be—. But it requires capacity at the municipal
level.
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[417]
Alun Ffred Jones:
Reit. A gaf i ddiolch yn fawr iawn
ichi?
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Alun Ffred Jones: Right. May
I thank you very much?
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[418] May I thank both
of you for coming in, and for your evidence?
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[419] Dr
Kuzemko: Pleasure.
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[420] Alun Ffred
Jones: It will prove very useful as we try to put our inquiry
into shape later on. Diolch yn fawr iawn. Thank you.
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[421] I have a feeling
that there is a desire to leave this room from the Members.
[Laughter.] Our next meeting is on next Thursday.
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Daeth rhan gyhoeddus y cyfarfod i
ben am 12:29. The public part of the meeting
ended at 12:29.
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