Rendering of the Novel Offshore Vertical Axis wind turbine (Project NOVA). The main partners of the project are QinetiQ, Wind Power Ltd. and CEFAS Source: WPL/Grimshaw Architects
PEi: Where is funding for the ETI coming from?
Dr. David Clarke, CEO of the UK’s Energy Technologies Institute
Clarke: The commitment is from our private sector partners BP, Shell, E.ON, EDF, Caterpillar and Rolls-Royce – to each put in £5 million per year for each of the next ten years. This funding is then matched by the UK government. The commitment we have today is £600 million, as we have six partners, but the UK government is committed to support up to 11 partners. The challenge is then with us to recruit those additional partners, and we making progress.
PEi: Is the fact that only two out of the six companies are UK-owned a concern?
Clarke: No. The big challenge for ETI is to get the right people with the right skills, whether that’s as board members or within the project teams. So actually we’re after the right groups who can bring skills, technology and market access, and whether they are UK-owned or not is secondary.
The reality is that all our partners have a major presence in the UK. They are large employers and, critically, they supply major parts of the UK energy infrastructure whether as a distributor, generator or provider of equipment.
PEi: Where does the UK government fit into this partnership?
Clarke: The ETI has been set up as a limited liability company in partnership between the UK government and the private sector. The Technology Strategy Board and the Engineering and Physical Sciences Research Council are the two governmental groups to which ETI will work closest.
The Department of Innovation, Universities and Skills (DIUS) is our legal government member and the line-of-sight body for ETI to central government. John Denham, the Secretary of State for DIUS will sit on the board just like the other board members, but he will not have any special powers. We are a separate legal entity.
PEi: On the day of the ETI launch, you announced three wind turbine projects – Project Deepwater Turbine, Helm Wind and Novel Offshore Vertical Axis – and one marine turbine project ReDAPT. How long will it be until these projects are ready to move from the drawing board to commericalization?
Clarke: These are not theoretical projects they are already underway and are operating. The three wind projects launched are each around scheduled for 18 months in duration, they are running in parallel and they will all finish, give or take a few weeks, at the same time.
The ReDAPT marine turbine project is longer: a three-and-a-half year project. This project splits into three phases: firstly, the development of the turbine; secondly, its installation in the Orkney Islands [Northern Scotland]; and then thirdly its operation and collection of data. In parallel with the final stage there will be the development of toolsets for more generic environmental modeling and analytical purposes.
PEi: And if the various projects are commercially viable, where they would be manufactured?
Clarke: Generally the ETI would draw up a confidential commercial agreement with a particular consortium, but the location of manufacture would come down to the implementation plans of the consortia themselves. ReDAPT, for example, is essentially a UK-based consortium.
PEi: Do you think the government will offer incentives for the manufacture and uptake of ETI projects?
Clarke: Clearly there is a huge opportunity in the UK for low carbon jobs of the future. We are seeing, slowly but steadily, a reduction in demand from the offshore oil and gas industry for skilled engineers, as well as manufacturers and maintenance support. This is an area where the oil and gas guys could pick that up.
Will there be tax breaks specifically for companies of this sort? Well, that’s for government policy to decide. But we are now seeing the likelihood of the UK adopting feed-in tariffs (as in Germany) as a consequence of the current Strategic Review.
We are clearly seeing Regional Development Agencies looking to attract new manufacturing industries. It appears the big jobs opportunities are to found in the Northeast of England and Scotland, because they are close to where the wind/marine farms would be sited. Longer-term there are opportunities in the Southwest of England as well, for marine energy and the Atlantic Array wind farm for example.
As these major sites come onstream, I would expect to see installation, maintenance and support groups operating in those areas. As for manufacturing, there is more scope for that being outside of those immediate regions, but clearly the big assembly manufacturing operations for these technologies shouldn’t take place too far from the final installation.
You can move these things around the coast on barges, but it is challenging and it takes time. That’s one of the issues that the ETI faces – the rate at which the UK needs to install renewable energy infrastructure to achieve its targets suggests, from a costs point of view, these turbines would have to be assembled close to their final installation position.
The combination of the need to strengthen the skill base, the need to develop low carbon technologies and the need for more affordable energy means that schemes like the ETI offer a win-win-win across all three.
PEi: Is carbon capture and storage (CCS) expected play a role in the ETI?
Clarke: Yes. We will be launching a CCS project within the next six months. We hope to address two issues with CCS. The first is simple: where is the storage capacity within the UK and how much of it is there?
We understand the depleted oil and gasfield position well and where those are. But the questions around other storage sites, particularly saline aquifers, are much more open for debate. The bounds of where the potential storage sites aren’t particularly well understood.
Once we’ve gone through that, BERR (the Department for Business, Enterprise and Regulatory Reform) and DECC (the Department for Energy and Climate Change) will then implement a CCS demonstration project in parallel with the ETI’s study.
But in the long term the ETI will explore how to go about undertaking a carbon storage operation and infrastructure in the UK and to the benefit of the UK. Once you look at the economics of this, you find that carbon dioxide, from a pumping point of view, is a significant cost item.
Power plants with CCS therefore may need to be in reasonably close proximity to the storage location, which of course may not be an ideal location in regards to the demand centres. So there are a number of geographical considerations for the ETI to examine and report to DECC and BERR.
The second issue of interest to the ETI is what I would call ‘next generation’ carbon separation and capture systems. It may sound strange for me to talk about ‘next generation’ CCS when the first generation hasn’t been implemented yet, but the question we’re wrestling with is what could a next generation system look like. The point being is that it is going to take considerable time and there will have to be significant ‘de-risking’ of that technology before any group would consider taking it to production scale.
We recognize that CCS is a long game and would not be implemented until post-2020, but we are assuming that by then the ‘first generation’ CCS like amine scrubbers would be installed and operating on a commercial basis. The ‘next generation’ CCS entail a more efficient carbon separation system that would make CCS more affordable.
Current CCS technologies incur a significant efficiency and cost penalty to the generator, typically 30 per cent on top, and we are looking for a lot less than that. Clearly it will be challenging to undertake any kind of cost analysis and get a good cost baseline on next generation CCS, when we haven’t yet fully implemented the first generation system.
PEi: Do you expect Shell and BP to use their extensive expertise in the North Sea oil and gasfields in ETI’s work in the field of carbon dioxide storage?
Clarke: There are two quite separate questions around the mechanics and the geology of storing carbon dioxide. We are getting knowledge across the industry, for example from the Statoil project, in terms of understanding how CO2 behaves underground.
For the UK, the question the ETI is asking is where would we put it? Where have we got those kind of formations? We have very fuzzy areas on maps, but we need understanding based on knowledge from current carbon storage operations to ascertain the right geological structures to be aiming for.
Shell and BP know about North Sea oil and gasfields, but until now they have had no interest in saline aquifers, so we are working with the British Geological Survey on this. Shell, BP, Schlumberger and so on understand the ways CO2 can be stored in a depleted oil and gas field, but from a volume point of view, we need a much bigger geological area.
PEi: Do you envisage that the UK will have a comprehensive CO2 pipeline network similar to the existing natural gas network?
Clarke: The cost and the scale of plant that needs to be operated suggests that, for the foreseeable future anyway, CCS could only implemented on large, static installations. I can’t see it happening, for instance, on domestic scale boilers. So, I can’t see a comprehensive CO2 network that say, starts in London and runs north.
However, I can envisage a network that links major power stations to major storage facilities. This would be mainly on the east coast of Britain, but there are also some opportunities towards Northwest England and the Irish Sea. Most of the current large coal fired plants are in the middle of England (near the coal), and we must think carefully about where we will site plants in the future with regards to CCS as well as grid connections.
PEi: What will be the day-to-day work of the ETI?
Clarke: Initially we have 35 employees based at the Loughborough University Technology Park. There two main pools of talent and activity. One is the in-house brains which are very much focused on the development of the technology strategy for ETI, but also the development of an underpinning energy system model for the UK.
When finished we will use this as a modelling approach and make it available to other groups such as the Technology Strategy Board, the Carbon Trust and central government. It’s a toolset that we’re developing to enable us to address strategic questions about the UK energy base.
Critically we then have access to a pool of capability in our members both in the industry and in the public sector that forms the external brain power in conjunction with the project teams. They will help us think through some of these problems in terms of strategic planning to give us the right framework.
That’s very much in-house team led, but challenged and supported by our industry members who work in the market. So they know the real problems and what the issues are. And we can’t get the information we need off that then we’re looking at a broader group of people, like advisory groups that include specialists from across the industry. This would apply, for example, to the issues arising from the day-to-day running of offshore wind farms.
PEi: Will the intellectual property (IP) rights to the ETI projects be available to the industry?
Clarke: What we are trying to do is develop capability and see it exploited. When we set up ETI we were all, that is to say the government and the industry members, of a like mind.
We don’t want to see IP developed and then locked in a box. This is not about hiding IP or locking people out from it. This is about developing the energy base in the UK and developing the industrial opportunities that go with that from the point of view of export sales.
So what we are looking for from the IP is that it is owned and hence managed, protected and defended by the people best placed to do that. In most cases, that will be the consortia or project teams. This clearly arouses some issues because if, for example, an academic group led a project, they may not be in a position to defend the IP rights from a financial and technological point of view.
Therefore, the projects will probably be led by industry groups rather than academic groups or they might be led by larger SMEs (small and medium enterprises) or corporations rather than ‘one man’ groups. Fundamentally we expect IP rights to be protected and exploited, so we think the project team that probably has all the background IP, but to provide a license for the ETI industry members to use the arising IP in addition to the consortia being able to use it.
The ‘motto’ of ETI is ‘equal in, equal out’. That is to say everybody puts in the same, everybody gets the same thing out. All the bills are split equally, all the IP goes to everybody.