RENEWABLE ENERGY ASSOCIATION

17 OCTOBER 2006

  Q120  Rob Marris: But I just wanted to check, so that is individualised?

  Mr Miles: Absolutely. We have a number of schemes in the country particularly with private landowners. Basically they stick a biomass boiler in and then are charging all of their tenants. However, I would add that there is the issue of regulation. There is in this country a perception that if we go to community heating, some people do wonder, "Am I then tied to the supplier? Is this regulated?" Some utilities have said to me, "Well, we would actually prefer it if it was regulated", hence if Ofgem were regulating community heating, which is, to my knowledge, at the moment an unregulated area, it would certainly make consumers feel, "Yes, I'm protected if there is only one heating source" with this new development.

  Q121  Rob Marris: You are not at the mercy of your landlord?

  Mr Miles: You are not at the mercy of your landlord, and I think it does require some sort of regulation.

  Q122  Chairman: Do you have a view on the Department's proposals for the Renewables Obligation? Does it help you?

  Mr Wolfe: Yes, we do have views and of course we will be responding to that. I think it is important to remember that the RO is fundamentally targeted at large-scale, fairly centralised generation and that is the area it is addressing, and it will be of only marginal interest at the levels we have been talking about today, so one cannot rely on the RO really to deliver all the things we have been talking about today.

  Q123  Chairman: I have a pet hobby horse which I am keen to ride. You have not brought along any representatives of micro-hydro schemes. Do you have any in the membership of your organisation?

  Mr Wolfe: We certainly have, yes, but you have already criticised us for the size of our delegation!

  Q124  Chairman: That is an entirely fair point, but if you could get that member to brief me, I would be very grateful. I think the Government is underplaying the potential of micro-hydro in England.

  Mr Wolfe: Yes, we would be delighted certainly.

  Q125  Chairman: Finally, can I just ask you to compare and contrast—and this is not meant to be a university essay or dissertation or whatever, but to compare and contrast—the British Government's and our country's approach to distributed energy compared to other countries, say, of a similar size in Europe. You mentioned Germany as being well ahead of us in some factors, but how do we compare?

  Mr Wolfe: We are pretty close to bottom of the European league table in terms of renewables across the board. We generate of our total energy something like 1.5% from renewables against a European average of over 10%, so we are way, way behind and that applies pretty much across the board. Certainly those countries that have adopted the feed-in tariff mechanism have been far more successful at ramping up their level of renewables penetration. There are many countries which have been much more successful than we have in terms of using their indigenous biomass resource, and countries like Austria, Finland and Denmark are meeting 10 times as much as a proportion of their energy from those sources than we are, so you say not to give a schoolroom essay, but we are pretty close to the bottom of the class.

  Q126  Chairman: Is that because we are quite used to cheap energy in this country and actually the real driver for your industry is going to be the higher energy costs of gas in particular where we have actually seen the consumer taking a rational decision to take a greater interest in it?

  Mr Wolfe: I think partly, but it is also, I have no doubt, partly related to the extent to which we have deregulated our energy industry and that makes it less easy for us as a nation to target individual energy suppliers and make them do what we want. It is a far more liberal market and that means that even models like the feed-in tariff are more difficult to adopt in a fully liberalised energy system than they are in a more monopolistic energy system. There are a number of reasons, a number of excuses we can use, but really we have to stop falling back on them and make the changes that are necessary.

  Q127  Chairman: People are motivated by their own pockets rather than a desire to do something for the planet frankly and they are going to feel that pinch more and more, are they not?

  Mr Wolfe: And they are also influenced by what they see around them and I think it is very important, for example, that the Government takes the lead in the government estate. At the moment it is a very, very low user of renewables in decentralised energy.

  Q128  Chairman: Schools and hospitals, for example?

  Mr Wolfe: Exactly.

  Q129  Chairman: Well, I think it has been a very useful evidence session which we have enjoyed. We are very grateful to you and thank you for managing your large team so efficiently!

  Mr Wolfe: Thank you for inviting us here.