Dr Tim Fox is passionate about energy and engineering, and just as passionate about why both are at a standstill in the UK. The ‘Valley of Death’ is how he describes the country’s gap between engineering innovation and commercialisation.
He sees British engineering as first class in inventiveness and consultancy: “What we don’t particularly excel at is turning that into manufacturing and products and commercialised opportunities. It is still very much a knowledge-based economy. We are not well known for turning things into products.”
UK engineering also holds a good reputation, adds Fox, the head of Energy and Environment at the Institution of Mechanical Engineers (IMechE). “British engineering is still held in very high regard. We have a very strong reputation for expertise and knowledge that people can call on and tap into,” he says. “In energy and environment we are recognised as real leaders. I hear time and time again that British engineers are good at looking at a problem and coming up with a different solution. Engineers in other countries are very good at providing textbook solutions.”
Into the Valley of Death
But he warns that this standing will slip if UK policymakers cannot provide the incentives to cross the existing no-man’s land from innovation to commercialisation.
“Something now has to happen in the way of government support to get across that Valley of Death or it’s going to disappear overseas and we’ll be buying the technology back in ten years’ time.”
At the heart of the problem, there is “no market driver for a lot of this stuff”, he argues. “It’s all about climate change and the decarbonisation agenda and sustainability, and the traditional market driver is not there. It needs some support to get it there to a point where it is commercially viable.” Carbon capture and storage (CCS) is a classic example, he adds.
Also stuck in its own Valley of Death, says Fox, is the UK energy sector. We meet at the headquarters of IMechE in Westminster, a stone’s throw from the House of Commons, where he says the government’s plans for Electricity Market Reform (EMR) under its Energy Bill (due to be published this month, but not as PEi went to press) has succeed in neutering a British bulldog of energy.
“The landscape has radically changed within the last 12 to 18 months,” he says, “and the reason for that is quite clearly a loss of confidence in the investment community in the government’s aspirations and plans for delivery. The government hasn’t got investment money – it’s relying on the public sector to come to the table. The government’s job is to create the atmosphere, the environment and the framework in which investors can have confidence and can pile in to the market happy in the knowledge that they will make a decent return on investment in time.”
The government’s current inertia also contrasts poorly with its momentum three years ago: “It had passed the Climate Change Bill, it had laid out its stall as far as its low-carbon plan was concerned – there was a real sense of momentum and confidence – but in the last 12 to 18 months that has almost vaporised to the point that we are in this hiatus. That has really stalled innovation and motivation to bring new ideas to market.”
Quite simply, the “UK is not looking as attractive as it did a couple of years ago”. So is he optimistic that momentum can be regained? “Everything really hangs on the next six months,” he says. What is needed is some stability and “in some sense it doesn’t matter what the real nitty-gritty detail is”.
The benefits of 80–20 vision
Fox did a civil engineering degree and a PhD in fluid mechanics, and he suggests the government should think like an engineer and adopt the ’80–20 rule’.
“Something is fit for purpose. It might not cross every ‘t’ and dot every ‘i ‘and it’s not going to please everybody all of the time, but it will engender stability. Everybody will know exactly where the chips have fallen and they can get on with planning. We use the 80-20 rule all the time in engineering: get it 80 per cent there and get it out the door. Don’t sweat the last 20 per cent, because you’ll never get there.”
Because he says until the government does something decisive, “the clock is really ticking. This hesitating is doing much greater damage”.
“Engineering companies, particularly big ones, make long term plans on skills, resources, training and staffing, where they’re going to invest their effort. If they wind down investment of resources in certain areas, it would take a long time to alter that course.
“Playing with the engineering resource base in this way is not clever because it’s a resource base that needs a stable timeframe to commit to for a long length of time.”
Nowhere is this more pertinent than in the nuclear industry. Two years ago there was a new build programme that was moving ahead at pace but has now stalled while potential players wait and see exactly what the market framework will be under the government’s proposed contracts for difference.
Meanwhile, Fox – who used to work for the UK Atomic Energy Authority – says that “the workforce is ageing”.
“It is geared up to transfer knowledge to another generation. If you don’t move forward quickly enough, each year you lose a chunk of that workforce and you eventually lose the goodwill to make that transfer, and that’s a dimension that the government doesn’t necessarily appreciate. Having built that momentum behind nuclear new build, they lose it at their peril.”
Fox stresses that what is unique about the nuclear industry “is not necessarily the technical dimension, it’s the cultural dimension – the safety culture, the quality culture. That is something that becomes engrained in you like a piece of Blackpool rock. It’s that culture that needs to be transferred to a new generation of engineers.
He explains that there is a danger that you lose “sufficient critical mass of that knowledge within companies to be able to empathetically transfer that knowledge from one generation to another. You could sit in as many lectures as you like – you need existing practising engineers alongside you for that culture to rub off on you. I think that is something the government has not understood.”
If there is a flip side to the nuclear industry in the UK, it is shale gas, a fledging market which could deliver a jobs and skills boom but which has not taken off – rightly or wrongly – because of environmental concerns.
Riding the shale gale
Fox, who entered the power industry via an interest in heat exchangers, is under no illusion that shale gas is a “silver bullet that is going to solve the UK’s energy security issues”.
But he is certain the time has come to move it forward, which requires the government to “put in place an environmental framework that gives confidence to the public but also enables the fracking activity to move forward… and where investors and engineering companies feel confident about moving into that market”.
And he believes few countries are better placed to do this than Britain. “There is no reason to delay. The UK is in a superb position of having a very good solid environmental and health and safety framework in place. It is fit for purpose for the exploration phase. It needs to be strengthened for the production phase.
“A substantial amount of the framework is there. It just needs the political will to move forward. That would be a major step forward in ensuring that the industry works within the best practice at the lowest possible environmental risk and that it establishes public confidence.”
Reaching the suite spot
Whether it is nuclear, shale gas or CCS, Fox says the underlying problem of them all is that the “government is loath to pick a winner, but it’s not about picking a winner – it’s about picking a suite of winners”.
What would his suite be, given that we’ve already established it would include nuclear and shale gas. He adds to the list a “continued use of gas and coal with CCS” along with “an opportunity for a suite of renewables”.
|Ferrybridge power plant, site of a CCS project: Fox says CCS is in need of a government kick-start
But he believes the UK has placed “too much emphasis” on offshore wind, which has been “far more technically challenging than the government first understood”. He adds that “the whole marine energy area is the one that needs the most attention from a fundamental development point of view, because a lot of them are at a small-scale pilot plant stage”.
And what of the Smart Grid? Fox winces. “There has been an over-reliance on the Smart Grid to solve all the distribution and operation problems. The government thinking has been around the deploying of generation kit on the ground without much thinking of how that kit will integrate the grid and beyond.”
The Smart Grid, he says, is “fundamentally an extremely large software project – very complex and very high risk. We should be looking at derisking that through the use of energy storage.”
“There are a lot of energy storage technologies which have come onto the radar which are scaleable, flexible, have possibilities, and are innovative. The government really should be taking a look at storage – how it fits in and what values it brings – with some rigour, and not place all its aspitarions and expectations at the door of Smart Grid.
So that’s energy storage added to what he calls his “bag of winners for the UK”, but with the caveat that it needs government involvement at an early stage to get it to the point where it can function at anything like a commercial level.
Which brings Fox back to his point about stability. “It is really about putting in place a stable framework, committing to it and then walking away from it and not tinkering with it and leaving it to do its job. That will get us moving in the right direction and that is more important than ‘are we going to have x per cent of wind versus x per cent of nuclear and x per cent of whatever else’.”
In a way, he says, the government is trying to “pick a winner on a grandiose scale – which is the EMR – instead of just getting on with it”.
“There’s a huge amount of ‘navel gazing’ around individual pieces of technology but when it comes to backing the biggest power industry project for a long time, it’s getting itself tied up in knots. We want to see something in place and we want to see it in place now.”
Fox says that the “inevitable reality” of what many call dithering in Whitehall is that “the longer you wait, the higher the price will be”.
“You’ve got a gap coming in the generation market as a result of kit coming offline and the need for substantial replacement, not only of the generating kit but also of the transmission and distribution infrastructure,” he states. “All of that is in a state of hiatus. The longer you leave it to fix, the closer you are going to be to that drop dead date, which will push the price of that kit up. Because the law of supply and demand will come into play as you’re going to need a lot more kit in a lot shorter time than if you had got moving now or two years ago. That will inevitably pressurise the supply chain, which will enevitably move to a higher prices situation. Each day you wait, the price of the final bill is going up, because of that looming gap.”
You might think that all this angst about who is going to do what and when might give Fox a downbeat view of the energy industry, but the opposite is true.
“The energy sector right now is the most exciting place to be in the world. If you want a career that is going to be exciting for its full duration, then you should think about the energy sector. The range of challeges that it faces – and the longevity of those challenges: we’re talking about 2050 and beyond – mean you are pretty much guaranteed that if you do engineering at university and go into the power sector, then you will get a good career out of it.”