Revised transcript of evidence taken before

The Select Committee on Science and Technology

Inquiry on

The Resilience of Electricity Infrastructure

Evidence Session No. 11               Heard in Public               Questions 124 - 138

Tuesday 9 December 2014

10.40 am

Witnesses: Matthew Bell, Dr David Clarke and Professor Kevin Anderson

USE OF THE TRANSCRIPT

Members present

Earl of Selborne (Chairman)

Lord Broers (co-opted)

Lord Dixon-Smith

Baroness Hilton of Eggardon

Baroness Manningham-Buller

Lord O’Neill of Clackmannan

Lord Patel

Lord Peston

Lord Rees of Ludlow

Viscount Ridley

Baroness Sharp of Guildford

Lord Wade of Chorlton

Lord Willis of Knaresborough

Lord Winston

________________________

Examination of Witnesses

Matthew Bell, CEO, Committee on Climate Change (CCC), Dr David Clarke, CEO, Energy Technologies Institute (ETI), and Professor Kevin Anderson, representing the Resilient Electricity Networks for Great Britain (RESNET) project, University of Manchester

Q124   The Chairman: Welcome. We are grateful to you for joining us this morning as we take further evidence on our inquiry into electricity resilience in the United Kingdom. Would you like first of all to introduce yourselves, and if you would like to make an opening statement, please feel free to do so? I should just alert you to the fact that we are being recorded, so everything you say will be on the record. Thank you.

Dr Clarke: I am Dr David Clarke. I am Chief Executive of the Energy Technologies Institute, ETI. We are a public/private partnership carrying out design and analysis around the UK energy system out to 2050, and then investing in major technology demonstration and engineering demonstration projects to try to address the challenges in delivering those solutions.

Professor Anderson: Kevin Anderson, I am Professor of Energy and Climate Change at the University of Manchester and deputy director of the Tyndall Centre for Climate Change Research and, for my sins, today I am the principal investigator on a project looking at the resilience of the electricity network in Great Britain.

Matthew Bell: I am Matthew Bell, I am Chief Executive of the Committee on Climate Change, which is the Parliament and the Government’s independent adviser on issues related to climate change and climate budgets.

Q125   The Chairman: Thank you very much. If none of you wants to make an opening statement shall I start with a rather general first question? Would you like to tell us how you think that electricity resilience in the United Kingdom compares to that in other countries in Europe and North America? I am sorry; I have the wrong one again. Sorry, start again. I am always doing this. How do you expect climate change to impact on the resilience of the electricity system?

Matthew Bell: Shall I start off and others can jump in? It is worth saying, to start off, that there are at least three ways to think about the resilience of the electricity system as it relates to climate change.

The first of those has to do with protecting the electricity network, generating stations, substations and the extent to which it is resilient to the effects of climate change, such as flooding, high winds, weather and those kinds of things. So one issue the Committee on Climate Change and the Adaptation Sub-Committee has looked at is: is the network resilient to both climate change-related events and weather-related events?

There is a different issue, which is about meeting changes in demand that we foresee over the next 20, 30, 40 years—changes in demand because, for example, cooling becomes more important, changes in demand related to electric vehicles, changes in demand related to electricity for heating. Demand might change. Is the network and is the infrastructure we have resilient to that?

The third issue is in the generation of electricity itself: one of the recommendations coming out of the Committee, and one of the recommendations in the Government’s carbon budgets, is increased use of renewables, some of which are intermittent, so there is increased intermittency of generation—does that have an impact on the resilience and our ability to meet demand?

So the resilience of the network, when we are thinking about it, falls into each of those three categories, and what you do in each of those three areas has an influence over how resilient the network is. I will pause there, and then clearly if there are questions on any of those three areas or anyone else wants to come in—

The Chairman: Would either of your colleagues like to come on this?

Dr Clarke: From my point of view, I would like to emphasise the clarity and distinction between the questions of how we expect climate change to impact versus any response we choose to put in place to meet climate change targets in terms of energy system targets. As Matthew just highlighted, certainly in terms of climate change and the potential that we see there, there are two key issues that we had identified in the context of the UK, one of which is the potential for warming and hence an increase in demand particularly for air-conditioning in terms of electricity loads. Also, there is the potential risk for cold weather in the winters, and how long we may see cold spells, what the duration is and what the intensity is. I think that is more uncertain. But those are what I would very much classify as effects that we will see as resulting from climate change. Then there are clearly the targets that we set nationally in terms of what policy measures we want to implement, and what energy system designs we adopt as a consequence. Those two things need to be treated quite differently. One we have to react to and deal with; the other one is of our own making, in essence. We are choosing what kind of energy system we want to put in place.

The Chairman: Would you like to speculate on the first of those, the effects that climate change will have on demand patterns?

Dr Clarke: From my perspective, the air-conditioning position is one that we need to be very conscious of for two reasons, one of which is that we are seeing warming in summers. Reports even today suggest we are going to continue to see warming in summer spells. We are seeing increased rollout of air-conditioning in new build developments, in cities in particular. That is happening already, and clearly the consequence of that could be a trickledown effect to a broader section of the economy and broader sections of the residential population in terms of that happening. The demands that that places on the system are quite significant compared to most loads in a house today. I am talking about residential properties. The cold weather situation is far less clear as to what will happen and as to whether we will actually see deeper, longer cold spells or not. That is something that the Met Office are probably best placed to advise on from their perspective, and the Tyndall Centre.

Professor Anderson: I agree with both my colleagues. You can split this into supply and demand, and I am going to focus, just initially, on the demand side. Again, there could be additional air-conditioning load on the grid. To give us some sense of what that might mean, we currently consume, very approximately, about 350 terawatt hours of electricity in the UK. That is our final energy consumption. That might not mean a lot to some of you, but it might mean something to others. But the air-conditioning load from some of the work we have done within our project RESNET suggests that it could look similar to total current electricity demand. So air-conditioning load, as we go forward through the warmer climate, could be as big as the total electricity demand today.

If you add to that a lot of discussion, which some of you will no doubt have heard, about electrifying cars, at the moment cars consume—in terms of diesel and petrol, including light vans as well—about the same amount of energy as the total grid, again about 350 terawatt hours. If you then look at domestic heating in the UK, which the previous chief scientist at DECC, David MacKay, was talking about having significantly put on to the grid, principally through heat pumps, at the moment that is about 350 terawatt hours.

So if you think about this, this is a grid that is four times larger—if you put heating, air-conditioning and transport on the grid—than the current electricity demand. If you then want process heat for industry, for cement making, for steel industry and so forth, that is also about another 350 terawatt hours. So people keep talking about electrifying things, and even if you can become much more efficient and maybe reduce half of these loads—nevertheless, the size of the grid for these futures would still be very much bigger than today. I would suggest that currently the grid provides about 20% of our energy, and if we are serious about climate change then it needs to move towards 60% to 80% of all electricity demand. It needs to be three or four times larger than it is today, or we need to become phenomenally more efficient than we are now.

If we are honest about this, we do not know what the wind conditions are going to look like in the future. We can say something about mean temperatures across the UK. We are very poor at understanding what those extremes will look like, and infrastructure is very susceptible to the extremes as well as the means. The means are important; the ongoing warming has a big impact on the grid. Nevertheless, the extremes are also important, and we are not good at understanding those at the moment.

Similarly for wind, we have a very poor understanding of the extreme impacts of wind, and we have a very poor understanding of the direction of the wind going forward. Wind is interesting to think about. Even if the wind speeds only go up a little bit, the damage is roughly a cube law. You increase the wind a little bit and the amount of damage goes up by a cube of that. So there are a lot of unknowns about the future.

If you want to build resilience into that, you have to bear in mind that we do not know, first, what the grid is going to look like in terms of its demand profile. If we are serious about climate change, basically we have to electrify a huge proportion of the UK energy demand, and that has to be played out against the fact that, if we are really honest about this, we do not understand what the climate impacts will look like in terms of important characteristics such as wind, rainfall and temperature. That is probably not helping you make a very clear picture of this, but we need to be honest that the future is incredibly uncertain, both from a climate perspective and from what we are going to do in terms of our infrastructure itself.

Q126   Lord Willis of Knaresborough: Can I follow that up with a simple question, because it is a very depressing picture you have just painted? What I would like to ask all three of you, but particularly you, Professor Anderson, is whether you feel that, given the current government policy in terms of climate change that fits into international and global policy, the Government’s policy is sufficiently clear in order to maintain resilience, certainly up to 2050?

Professor Anderson: There is lot in that question, but the first thing is—and we may have some disagreement about this—that government policy on climate change domestically is not consistent with our international commitments. I have made this point repeatedly to numerous committees. You could drive a Maersk ship sideways through the gap between the two of these. So what we are agreeing to do domestically in terms of our mitigation efforts are completely inadequate for dealing with the 2°C characterisation that we often sign up for internationally, and we will again this year in Lima, and no doubt again in Paris next year. There is a big difference between those two. If you look at our domestic targets, we are probably developing policies that are broadly in line with those targets, but if the rest of the world did something similar to that, and it is not doing even as much as the UK at the moment, or at least many countries are not, then we are talking about 3°C or 4°C future temperature rises, which are very, very large indeed and, according to the CCC’s definition, which I would agree with, extremely dangerous.

Lord Willis of Knaresborough: You are saying that this disconnect between international commitments and domestic policy is something that has to be addressed and something that this Committee, as part of its response to resilience, should in fact put in because it is fundamental to resilience.

Professor Anderson: It is, and it is not just our policies; it is that the framing of climate change domestically is incompatible with our framing of climate change internationally. We have much weaker sets of targets domestically than those that we imply—that would be perhaps the best language to use—internationally, when we say, “We are definitely going to stay below 2°C and make all efforts to avoid 2°C temperature rise”, and yet our policies are much more in line, and our domestic targets, with a 3°C to 4°C temperature rise difference. So this disjuncture has been there for a long time. Lots of climate experts are fully aware of this but it is something that has been kept relatively quiet.

Matthew Bell: It is just worth, on that specific issue of resilience up to 2050, again going back to this distinction between the impact of both weather and climate-related events on the network, and some of the things that Kevin was talking about, this increase in the size of the network and the generation that we have to have. We were talking about wind and things like that, but if you look at weather-related incidents on the network today, the latest report that the Adaptation Sub-Committee has published says that weather-related incidents accounted for about 35% of annual disruptions to electricity distribution networks between 1995 and 2010, so over that 15-year period. That is things like wind, flooding and so forth.

There are currently, for example, about 700,000 homes and businesses, three water treatment works, one hospital, all of which are relying on about 57 substations that are in areas of high or very high likelihood of flooding. There is a risk there in terms of resilience of those types of things. The Adaptation Sub-Committee then looked through all the different sectors of the economy, including electricity distribution, to look at what was being done about those types of issues. Electricity transmission distribution today was the only sector that the committee felt had adequate measures in place to protect against what is foreseen to happen right now. It looked at water, electricity and a whole number of other sectors, and it felt that the electricity distribution and transmission infrastructure, as it currently is and with our current understanding of risks, is doing a lot and is adequately resilient.[1]

That follows on in some ways from the 2007 floods, and from the Pitt review. A lot of recommendations came out of that about investment that was necessary. The one caveat around that is clearly that Ofgem have just completed, in the last 10 days or so, their price-control review, which sets out what companies are allowed to spend on some of these things. We are still reviewing that in terms of the business plans that were put forward and the investment that was put forward. That is one aspect of the issue, and a serious aspect.

Certainly , as Kevin was saying, things like wind speed and stuff like that are very unpredictable. We are not sure what is going to happen, but that is one side of the issue. The other side of the issue, around what is necessary to meet the statutory domestic targets of around an 80% reduction in emissions by 2050, then involves bringing on the electrification of vehicles and bringing renewables on to the grid. That involves very significant issues and significant uncertainties, and that is part of what clearly has to be managed going forward in order for us to understand the costs. Certainly there are other countries elsewhere in the world where renewables, electric vehicles, all those things are a greater proportion of the grid than they are in the UK currently, but we will be going to levels that are even higher than those that have been achieved so far.

Q127   Lord Peston: If we place the whole subject within the context of system theory, then we would regard resilience as meaning adaptability to an unexpected shock. There should not be a resilience problem to the mean of the system, which is the point that Professor Anderson is making. Am I right?

Professor Anderson: Yes. Yes, of course, the mean is changing. So if you talk about the 2003 heat wave, there have been quite a lot of people suggesting that by 2030—with a lot of uncertainty again and caveats put on this—that could be the norm in the UK. That was a very extreme event and if you imagine the air-conditioning load that will be there you could argue that is an extreme that becomes the new mean. One of the big problems here is that we are not sure of that.

Lord Peston: I can understand that well, but that is, if you like, taking us to the next level up in terms of the difficult theory that we are dealing with anyway. What concerns me is where we know broadly what is going on, but only broadly, there should not be a problem, should there? Rational decision-makers should be able to deal with what they know is going to happen. The problem is: is the system capable of dealing with what we do not know is going to happen, to put it crudely? You could use more sophisticated language. What is your view on that? Are the people taking the decisions capable of showing resilience where they need to?

Dr Clarke: No, that was the comment I was going to make within the context of the last question as well, which is I think you need to be very cautious about asking a question such as, “Do we have policy that is going to deliver a 2050 resilient system?” We spent millions, as did many other people, including National Grid, on looking at what would be the optimum design for a future UK energy system and electricity system. I can guarantee you, if you put me on the spot and said, “What will it look like in 2050?” whatever answer I give you will be wrong. Uncertainty and statistics say it will be wrong.

If you ask me what it is going to look like in 2030, it is going to be pretty difficult to tell you. So for a broad, all-encompassing, “Is policy adequate?” yes or no statement, the answer is almost certainly, “For the very short term, probably yes. In the very long term, no, it is not”. “Can it be?” “No”. So you have to be very cautious about this policy piece for a number of reasons, one of which is just the sheer uncertainty, and the second one, as Professor Anderson highlighted, is if you assume you are going to electrify the entire UK energy system—by which I mean power, heat and transport—by any date you choose in the next 50 years, the answer is you are not going to do it. The reason you are not going to do it is that it is too expensive and there are many alternatives that are far cheaper. You have to look at the combination of power, heat and transport for exactly the reasons that have been articulated, which is that to build a system that could deliver 350 terawatt hours of heat, which is a challenging load for the UK, you would have to build an entire new National Grid. Cost? Quarter of a trillion, that kind of number.

To give you another piece of context, if you think you are going to deliver heat in the way that we all understand heat today, where we have a gas boiler in the main, or an oil boiler, or a coal fire that you turn on and off, you cannot do that using electricity. This is a simplistic view, but on 18 December 2010 gas demand on a Saturday morning in the UK when it was very cold went up by 132 gigawatts in less than an hour—in other words, more than the capacity of the National Grid was turned on in terms of gas heating in one hour. In the next 60 minutes it went off again, because all the houses are warmed up and it came straight back down.

So this is my point: you have to look at this as a system and look at how you would deliver the system in the future, and in that context you can start to see affordable alternatives. All the design work we do suggests that to meet the 2050 targets that we have set ourselves involves of the order of 1% to 2% of GDP additional to a kind of business-as-usual, no-climate-change-targets kind of world. The whole point about the system piece is absolutely correct, but it is very important that we do not constrain ourselves into a mindset saying, “It is an electric system, end of story”. I think we have to look at this as being a question of how you deliver across power, heat and transport and utilise all the waste heat that comes off various industrial processes, off power plants, to deliver heat in the future, rather than simply focusing on delivering electricity into heat, because if we do, the system will not do it at anything like an affordable level.

Q128   Viscount Ridley: This follows on from what Dr Clarke was just saying. Leaving on one side for a moment the question of floods and winds, because we have an issue as to whether we are talking about weather or climate there, whether having adjusted to weather we can cope with climate change, most of what I am hearing suggests to me that three-quarters of the resilience problem that we face in the long term comes from climate policy, not from climate change. In other words, it comes from the desire to go fully to electrification and so on. Now, Professor Anderson said that there could be a 350 terawatt—presumably per year?

Professor Anderson: That is what we consume per year, yes.

Viscount Ridley: Yes, in a year, exactly. You say that there could be such an increase from air-conditioning alone. What are the assumptions behind that? How much temperature increase are you expecting to see and how much rollout of air-conditioning? Anyone can throw a number out, so what are the assumptions that have gone into that calculation?

Professor Anderson: The project is still ongoing and with air-conditioning we were looking at more extreme temperatures. Having said that, I used half the number that we have come up with so far. All I can say is that the air-conditioning load looks very large. Some of our very—

Viscount Ridley: What temperature assumptions?

Professor Anderson: We are talking about the more extreme ends of the climate change realm. So if you talked about us globally being unsuccessful on climate change, which would be the current track, then probably 3°C to 4°C global average, and then looking at how that played out within the UK.

Viscount Ridley: What does that say for the UK?

Professor Anderson: I would have to go back to look at the details of how that came out for the UK.

Viscount Ridley: But it was more than 3°C to 4°C.

Professor Anderson: No, we would probably be somewhere near the average, I would have thought.

Viscount Ridley: So 3°C to 4°C over what period?

Professor Anderson: This would be playing out to 2050.

Viscount Ridley: By 2050, 3°C to 4°C?

Professor Anderson: This analysis goes out between 2050 and 2080. What I am trying to say is that there are many uncertainties as to how climate change will play out in that period, not least what our emissions will be. So what we are trying to look at for air-conditioning load is what the extreme would look like. The reason for this was to test the grid and then to start to say, “How could you come back from the extreme?” First, the temperatures may not be that bad. Secondly, we may significantly improve the housing infrastructure. So there are a whole suite of things we can do and if you put some of those in place, assuming the worst end of climate change, that brings you down to 350 terawatt hours. There is no doubt that there are other things that we can do, and are, looking at to try to bring it lower than that. Also, we normalise those sorts of practices. It is not as if you just have to have that to live. You normalise living in those sorts of properties. Most of us here were brought up in houses that we would never warm to the levels to which we warm them today, and of course most of us here probably do not air-condition our houses today. So how we respond is not just relating to temperature. How we respond relates to the new norms that we put in place.

When we looked at those collectively—as I say, this work is ongoing—then it looks as though the air-conditioning load could be very large. So what we need to be able to do, because we are working with National Grid, is to let National Grid know that that is a potential big impact. For them, they are not so interested in the terawatt hours; they are interested in the peaks, because of course this occurs primarily in the summer. The actual impact on the grid is enormous because it is not spread evenly over the year, quite obviously. It is spread across, principally, the summer periods, and that is a real problem for National Grid.

Viscount Ridley: Looking at Mr Bell for a second here, am I right in thinking that contrasting with 3°C to 4°C over the next 35 years, which Professor Anderson has mentioned, the warming over the last 35 years has been about half a degree or less?

Matthew Bell: Yes. We have not seen warming of 3°C to 4°C over the last 35 years. That is correct.[2]

Viscount Ridley: Exactly. Why this sudden jump this year?

Professor Anderson: We do not have any graphics here, but here we have the CO2 emissions in the last 50 years, here we have the CO2 emissions currently and here is looking at trends. CO2 is a greenhouse gas—you link the two together and that gives you something that links the temperature.

Q129   Lord Wade of Chorlton: In a way that discussion you have just had was the sort of discussion that I wanted to have, because I must tell you that I am sceptical of the Tyndall Centre. They always take extreme positions. I have had experience with them at Manchester in the past. Again, I ask you the question in a way that has just been asked. The point is that the temperature has not gone up. There are an awful lot of people who might believe like you do, but there are an awful lot of people who do not believe like you do. Why are they always wrong and you are always right? What evidence do you have? You have none that proves that your concepts are right and everybody else is wrong. Maybe temperatures will not go up. I am much more inclined to agree with Mr Clarke’s concept and to think that to make sudden decisions now to solve problems that may never appear is something that you would never do in a business. You would never sensibly invest money to say, “Look, this is the worst situation that may happen in 20 or 30 years’ time, so I am now going to borrow all this money to solve a problem”—it might never come. Surely the way to deal with these issues is to have a plan that you can deal with them if the problem arises and, as Dr Clarke rightly says, we adopt a system that is more adaptable as time and circumstances change. At the moment there is no proof that what you are saying will ever happen.

Dr Clarke: Can I just make one comment about the system adaptability piece before we perhaps pick up on that? I think it is very important that, if you adopt an approach that says, “We have a system and we are seeking to adapt it”, we should understand the implications of how we would adapt it and understand those early. You do not want to be making it up on the fly in 2030 and making billion-pound decisions at that point without the evidence to know what you are doing and why.

Lord Wade of Chorlton: The way I understood it was that if you were to make a decision that these changes are going to have to be made in the future then some fundamental changes need to be made in our policy at this stage. We have taken evidence already that if we assume that there is going to be a big serious problem from carbonisation, we should perhaps change how we produce temperature. Maybe we should spend much more on trying to produce energy in a different form and invest into those activities rather than trying to solve the carbonisation problem. In other words, if I knew that some problem was going to arise as a result of something that I did not really know, I would say, “Is this the best system to be using to cope with that problem if it arises?” Maybe it is not.

Dr Clarke: What I would want to do now in my world, which is exactly what we try to do, is to be testing possible designs, which is important from an engineering point of view. Why? To do these big demonstrations, like CCS demonstrations and so on.

Lord Wade of Chorlton: Absolutely, alternatives. Correct.

Dr Clarke: So it is important we test—

The Chairman: Can we hear from Professor Anderson, please?

Professor Anderson: If you could give me some evidence outside the Committee about the extremes that you think we have taken, I would be happy to respond to those and see whether I would agree or not.

The second point is that I am not interested in your, anyone else’s or scientists’ beliefs, I am interested in conclusions. I am not sure what the general public think about quantum mechanics and I am also not sure what the general public think about cancer treatment, but I would probably go to the specialist for both of those. Similarly, you may well be right along with other people who take—I do not know about your background—a non-scientific approach to concluding some scientific issue. But, by and large, I would take the views of the experts. Looking at what other evidence is out there from the majority of climate scientists, they broadly hold to the position that was demonstrated very clearly in the recent Intergovernmental Panel on Climate Change reports. You may well believe that they are wrong. I will go with the scientists’ and the experts’ conclusions, rather than the beliefs of yourself or indeed other non-experts in that area. You can choose which set to go to. You can listen to the astrologists or the other people that may give you health treatment, or you can go to the experts. My personal view is to go to the experts. We may differ on that.

Q130   Lord Broers: Perhaps I can follow up on that. I am an engineer. I am used to large calculations. I am quite an expert in that, and I know that it is extremely difficult to draw up boundary conditions and to understand what you are doing. I have looked at the overall temperature thing. I can see that you can come up with some credible models for the overall model of the atmosphere and predict temperature increases. But you said yourself, just now, that you have a very poor understanding of how you will predict weather and violent weather, and yet the panels have made confident statements that the weather is becoming more violent. So you have contradicted yourself. Now, can you—

Professor Anderson: Who says it is becoming more violent?

Lord Broers: I hear it all the time.

Professor Anderson: No, not the panel. We are not saying that.

Lord Broers: We have it in our evidence here. I could read it out. I will not find it now. There is evidence here that we are already seeing floods consistent with the projected consequences of climate change, and storms highlighted against the cost, damage and disruption. It is all in here. So this statement is made quite often. It has always baffled me quite how you calculate the weather changes and the likelihood of storms, when you have relatively small changes in temperature. So my more constructive question is: is enough being done to improve these models?

Professor Anderson: You ask the modellers and they will always want a larger computer. Certainly, the models are improving. I am not a modeller. I am not a climate change modeller. I am an engineer, too. One of the big problems is you need to bring models down to a level where they can give you some useful information at smaller grid square areas, so smaller geographical areas. At the moment, they are reliable at larger grid square areas, but if you are trying to bring them down to understand infrastructure issues in particular parts of a country, or even a country as small as the UK, it is very challenging to do that. So the models need to be improved and, indeed, the new suite of models that are coming out will give us better robustness at smaller grid squares. But if we ever expect to be able to predict storms, what will happen in particular months within 2050 or 2060, then we will be sorely disappointed. We will not be able to give that sort of output. But we know that we are putting more energy into the system, so there may be small temperature rises, but the energy increase in the system is very large, and that energy generally plays out in a whole series of events, with increases in means and also increases in extremes.

I somewhat take umbrage with your saying that we are always talking about the extreme weather now being related to climate change. I read a lot of the science reports, not the ones in the press; I am not interested in what the journalists tell us. The IPCC are incredibly careful in the language they use. No doubt, if you hunted through the several thousand pages of documents, you can find the odd exception but, by and large, the IPCC and the climate change community have been very careful in the language it uses. It does not ascribe, for instance, Sandy or Haiyan, or indeed what happened here in the UK last year, to climate change. It may well say they are exacerbated by climate change.

Lord Broers: I wonder if I am being given the wrong papers. I am reading here that the Adaptation Sub-Committee of the Committee of Climate Change stated in its 2014 progress report: “The global climate has already changed as a result of manmade greenhouse gas emissions. Here in the UK, land and sea temperatures have increased, sea levels have risen, and rain storms appear to be intensifying. Last winter’s floods are consistent with the projected consequences of climate change, and the storms highlighted again the cost, damages and disruption that extreme weather can cause”.

Professor Anderson: I would agree with all of that. There is nothing—

Matthew Bell: Given that that was my organisation that said it, let us—

Lord Broers: Is that not predicting that this is going—

Matthew Bell: Let us try to be clear. I think Lord Ridley is very helpful in mentioning climate and weather, and being clear about these things. There are some changes that scientists have ascribed to climate change and manmade climate change to do with—as you were quoting—sea level rise, changes in temperature, those types of things. They have been linked as well to increased storms. Increased sea level, temperature, sea level rise, those are measurable events and you can have a discussion about them. What the quote that you read out does not say is that a particular flood, or a particular storm, or a particular high wind event has been caused by—

Lord Broers: “Last winter’s floods are consistent with the projected consequences of climate change”.

Matthew Bell: Are consistent, that is right, yes. So the—

Lord Broers: What does that say? It says, “Last winter’s floods are consistent with the projected consequences of climate change”. This is the Committee of Climate Change that said that.

Matthew Bell: The modelling indicates that if you have higher sea level rises, then the chances are more probable that you will get more flooding. But it does not say particular flood—

Lord Broers: “Last winter’s floods”.

Matthew Bell: To bring this back to the issue of resilience, those types of activities, whatever their cause, the question is: is the electricity system resilient to them? Going back to some of the things that I was saying earlier, is the electricity network resilient to flooding, high winds, those types of things, whatever their cause? It is important that we understand that, and that is partly, clearly, what the Adaptation Sub-Committee—

Lord Peston: I am sorry to interrupt. I would like to hear the witnesses answer the questions. This is not about an argument backwards and forwards.

The Chairman: That is fair comment. I think we would like to hear from Mr Bell. Then I wanted to ask Lord Ridley to come to the next question. But if you would like to complete, Mr Bell, I am sorry you are being interrupted.

Matthew Bell: Just to finish that thought, there are some things that the climate change scientists and the climate change models ascribe quite closely to climate change—things like sea level temperature, sea level rise, air temperature. There are other things where the uncertainty is much greater, which is a lot to do with wind speeds, as Kevin was saying, flooding, lightning storms, all those kind of things, where all the climate scientists, I think, would agree that there is a great deal more uncertainty around the links and exactly how they happen. The issue of resilience is one of whether the networks and delivery of energy and electricity to households and businesses are resilient to those types of unpredictable events. Also, over the next 30, 40, 50 years, are we doing the types of activities that David was suggesting: testing the technologies, starting to embed the technologies and bringing the cost of those technologies down, consistent with what the Committee on Climate Change would say is the most cost-effective path to get us to where we want to be in about 2050?

The Chairman: Now we must move on. Lord Ridley, you were going to ask the next question.

Q131   Viscount Ridley: It follows closely on from what we have just been discussing, because we want to know whether there are adequate plans in place to ensure that the electricity system can deal with the impacts of climate change. It is important to distinguish here between, on the one hand, the impacts of climate change policy, which we have briefly talked about and, on the other hand, the impacts of weather—as you said, 35% of current disruptions are caused by weather and will go on being caused by weather. We can adapt to those and we can adjust to those. What is the extra work that needs to be done for, say, a 10% increase in wind speed—maximum wind speed, presumably—or whatever percentage you think is likely? What is the extra work that has to be done because of a change in sea level or a flood risk that would not be done anyway to cope with weather and give you a margin of error?

Dr Clarke: From our point of view, from an engineering perspective, in terms of the answer on that, we have been funding a project recently to look at hazards to the UK energy system, and the message we are getting back from that is that, fundamentally, there are good systems in place nationally, with individual major companies and with government. There are good systems in place for engineering—I will call it that—related risks around particular weather events and the consequences of an increase in a particular one, wind speed or whatever it is—icing around power stations and lines and substations and so on.

The thing where there seems to be less a consistent answer, and the area which we are seeing as an area that we need to consider more, is around combinations of events. So the individual events are covered, we think, broadly, but it is combinations of events—the sea level piece with a wind speed piece, the icing with a sea level piece and so on. Many of these things go together, to do with air pressure and so on, and they tend to get linked. That is the area that we are seeing where there is potentially some risk that needs to be considered more carefully, in terms of how we plan. It is about combinations of risks, but also being realistic about the combinations of risks and not necessarily seeking every kind of edge-of-envelope possibility. What are the realistic combinations of risk we think we face in the future? We are now looking at how we would seek to identify those and what groups in the UK are best placed to do that, and we have not completed that yet.

Viscount Ridley: What I am concerned about is that this could be a very small effect—this combination effect, this extra effect, this marginal difference that climate change will make—because, presumably, ice storms and sea level rise combine anyway, as it were. The sea level has been rising for hundreds of years, so we are already seeing small impacts of that, and so on. In weather like we have this week, we could have an ice storm because it is cold but very windy, but it is not quite cold enough to be snow, so it could be rain falling on ice and that kind of thing. What is the extra? The extra could be quite small, because we could move through that phase into a phase where ice storms are less likely or something like that.

Professor Anderson: It could be quite small, and it could be very large. Again, we cannot give you much information on that either way, partly because the science is very unclear about those particular extreme events, but I would say probably the largest thing is that we have no idea how the global community is going to respond to climate change. Currently, it is doing nothing in terms of reducing its emissions, which are going up at a three times faster rate of growth than during the 1990s. So we do not know how much energy there will be in the system going forward, because we do not know what the greenhouse gas concentration in the atmosphere will be. We have no idea how we will respond to that challenge, let alone the idea that there are huge difficulties in trying to make accurate predictions of weather. We can be fairly robust on climate, but the difference between climate and weather, as I think most of us understand, is important to understand.

Most of you are probably familiar with this, but if you think about splitting the grid into two parts, you have the National Grid, the big transmission stuff, the high voltage part of the system, and you have the district network operators, the DNOs, the lower voltage part of the system. My impression is that National Grid are more up to speed with the sorts of impacts that they may well see in the short to medium term than the DNOs, the district network operators, are. It would be fair to say you should question them as to whether they would agree with that or not. Most of the outages we see are not caused by the National Grid going down; they are caused by more localised effects. I think 35% of all outages, short-term outages, are from lightning strikes. Again, we are poor at predicting what the impact of lightning will be going forward. I am not trying to make great claims as to what we can do, but what we know is there is more energy system going forward and that these extreme events will likely play out more regularly.

The other point to bear in mind, and I am having to rely on my colleagues for this, is that, as I said before, the small increase in wind speed you referred to has a much larger impact in terms of damage, because there is this cube law associated with it. We have to understand that we may describe it as a small increase in wind speed, but we have to be fair about that and use the language then that would imply a very large impact in damage, or it could do, depending on exactly what those numbers were. But we have to draw that important distinction between those two.

The other thing about whether it is resilient enough or not comes back to the comment about systems. We have an electricity system and we have a whole set of nested systems. At the moment, electricity provides us with our lighting and numerous other things. It does not provide us with much transport. It provides us with some trains and trams and some buses, I suppose. But going forward, if more things are on the grid, you might make the argument that we have a whole suite of nested systems that are now reliant on electricity, so the level of resilience might have to be much higher.

Viscount Ridley: But that is the point about climate policy impacting.

Professor Anderson: It is not just climate policy. Without climate policy, we are putting more on the grid. I notice one or two laptops around here—previously they would have been pens and paper. So we are already reliant on a whole host of infrastructures that we would not have been using 10 or 15 years ago. ICT is very important to us now, so I would argue that, without climate policy, the issue of resilience is changing anyway because we are using electricity for a whole suite of things we were not using it for before. I would argue, on top of that, that climate policy will add additional things to those anyway.

Q132   Lord Dixon-Smith: I am becoming slightly puzzled. Of course one needs to be aware of the possibility of the extremes, but I live by the weather in my other career, when I am not in this place, and I have done that all my life. I am bound to say to those who think that climate is not changing that the climate is dramatically different from anything that I grew up in. I used to skate every winter. I have not skated for years.

But going the other way, I did not understand why you were so concerned about a possible air-conditioning power demand surge, because I spent 18 months in Malaya—God help me, over 50 years ago now—and I have to say that nobody out there at that time had heard of air-conditioning, or virtually nobody. It was not an issue and, frankly, we lived very, very comfortably. We did have a record low temperature while I was there. It was only 59°F. I cannot put that instinctively into centigrade degrees. But the adaptability of people, in my book, will mean that there is not anything like the demand for air-conditioning that you are describing. It was you, Professor Anderson, right at the beginning. I listen to that and, I am sorry, when you question one bit—

The Chairman: Lord Dixon-Smith, we will hear from Professor Anderson. Thank you.

Professor Anderson: In many respects, I would agree with you. It is not that we need air-conditioning; it is that we are already normalising to it. I have colleagues now, in a 1960s building, who have bought portable air-conditioning units for their offices. They have been working in those offices for years and the climate has not changed that dramatically but they still have to move to AC units.

The problem is that we normalise new types of practices and behaviours. I lived in the north-east for a while and I can tell you that people in the north-east were wearing T-shirts, where people from London would have been wearing coats in that weather. We normalise to certain behaviours. I am not saying we have to go down that particular route. We could retrofit our houses to help as well, no doubt, and we can learn to put coats and jumpers on. We can do all those things, but there is a real risk that the grid has to consider, which is that people will, unless there is some legislation to stop it, likely start to move towards air-conditioning loads. We already start to see it in some of the more prestige properties that are being built. They are putting air-conditioning units in there. You can already buy retrofit air-conditioning units.

A few years ago, people would have said that you would never heat your garden to have a barbecue outside in winter, but we now heat our gardens. There are a whole suite of practices that we put in place that lock in these types of behaviours and normalise them. I am with you. I think there are many things that we can do, and that is one of the things we are looking at in the project, to try to bring down what could be the air-conditioning load. Are there other things we can do? Are there practices we can adopt? Are there forms of legislation that could help to reduce the uptake of air-conditioning load? Are there retrofit opportunities for the houses we live in? Nevertheless, in the absence of those things, there is quite a lot of evidence in other countries that we’ll see an uptake in air-conditioning load, and we are already seeing that in the UK. We already see the bottom of the curve. I am with you. I hope the curve suddenly drops off, and I am sure National Grid do as well. Nevertheless, in the absence of other policies to put that in place, it is unlikely we will not see an ongoing increase in air-conditioning load. It will not be like Malaya in the 1950s; it will be more like Dubai now.

Q133   Lord Rees of Ludlow: I want to follow up on the impact of climate policy. The first question is: do you think the policies we have are ever likely to achieve the targets by 2050? Secondly, clearly, there are going to be impacts on the nature of the grid and its resilience from the greater dependence on renewables. I wonder if Dr Clarke would like to start on that.

Dr Clarke: I will take those in reverse order and start with the impact of renewables on the grid. It is not just renewables; it is the broader spectrum of what technologies we implement. To some extent, going back to your last question around the consumer end of this and what people expect, the reality is that we always talk about security, affordability and sustainability, but we may as well also talk about the trilemma issue of technology, consumers and then policy and business models, and how those three things fit together. The consequence of that is—probably the greatest certainty—that consumers, and I am going to use a very bad phrase, will demand stuff in the future. We do not know what it will be, and that is the uncertain bit, but there will be changes. People will want new technology; they will want different approaches to how they engage with it. That can be supported or destroyed by policy, as we all know, and the easy example I always use is, right now we have about 220 significant power stations on the grid, bigger than 5 megawatts—220, that is it. We have 575,000 solar installations of less than 4 kilowatts. Five years ago, eight years ago, they did not exist. Things change. That was driven by policy; that was the take-up. Now the cost of that is coming down and policy is stepping away from it, for good reason. I stress that because it can change and the grid can change in its nature quite quickly. We have never seen that before in this country, and it is happening. The point is that consumers can demand things. Whether it makes rational sense or not, it can happen.

You ask how we see these things changing. From an electricity point of view, the two issues primarily to be considered are vehicles and how electric charging may work on vehicles. But frankly, it is a tractable problem, because, in the main, you have the ability to charge your vehicle overnight. Heat is the issue. If we move towards electric heating, in general terms, when is everyone going to want to turn the heating on? Five or six o’clock on a Friday night in winter, and they will all come on simultaneously if we use conventional heating solutions. So you now say the only way of managing that, if you are in an electric heating world, is to look at the building fabric—you have to look at how the consumer uses their heating and how the actual heating system works. So, suddenly, it is technology, it is incentives to make people retrofit their buildings, it is the business model in terms of how they buy the electricity and off whom. It is not a trivial problem and I think it is impossible to separate the technology, the policy, and the consumer piece.

Lord Dixon-Smith: Can I follow up that last just slightly? The late Battersea Power Station used to heat most of Battersea and half of Chelsea, and not least of our problems is that we insist on putting our power stations miles away from anywhere, so that half the energy they produce is wasted—waste heat. A radical change in that, just from a planning perspective, could in fact do a very great deal to sort that out.

Dr Clarke: The reality of what you just said is absolutely correct. The challenge is building an economic power station at a scale and with the infrastructure that can be installed in a near urban location. It does not have to be in Battersea—10 miles away would be adequate. You can pipe water that far, hot, without a problem. I agree with you, and that is why it is important to look at the system and how we utilise that waste heat.

Today, the vast majority of our power stations with heat generation attached, spare heat, are very large installations, which we have had to place out of town for infrastructure reasons to do with fuel supply and to do with emissions. We have been looking recently at where you could site power stations in the future. If you accept you are going to a slightly smaller scale, then the benefit of the scale is you probably need less cooling water. That is one of the critical drivers, cooling water, on where you site a significant power station.

What we are starting to see is, certainly in England, 30 to 50 sites where you could put a power station, either thermal or small nuclear, potentially. You could put that within an acceptable distance of an urban conurbation to be able to use the waste heat, and most of those are brownfield sites. But you are tremendously restricted by a whole range of issues, not just the obvious ones of logistics of getting fuel in, of getting cooling water, but air corridors over power stations are restrained for obvious reasons, for security and so on. There are all sorts of issues, but we are seeing 30 to 50 sites where we think you could start to place either a small thermal or a small nuclear plant in the future, when you could use the waste heat. I absolutely agree with you, using waste heat is crucial in keeping the cost acceptable at a national level for the infrastructure in the future.

Q134   Lord Rees of Ludlow: It is clear that any investment decision we make now will have an impact extending to 2050 and beyond and I would like to ask, again perhaps Dr Clarke, who mentioned CCS, whether you think we can ever realistically reach the 2050 targets without CCS? Given that, do you really think CCS will ever be scalable?

Dr Clarke: As I said, we carry out quite detailed analysis around potential designs for the UK energy system out into the future, in the context of meeting energy sustainability targets. The number one message that we would take out of that is—this is across power, heat, transport, fully integrated—if you elect not to use CCS, and therefore essentially do not use fossil fuels out to 2050 in terms of power generation, the first question is: can you still meet climate change targets? Our analysis says you can. So you can do without fossil fuels, but only at a cost. The cost is of the order of 1% or more of GDP. That one decision is the single biggest decision you make about the UK energy system in terms of the cost of the system and that gets passed on to consumers.

So the question: is CCS important? To my mind, it is critical in keeping costs down. How do you operate without it? The answer is, you have to rely very heavily on nuclear and you have to rely very heavily on offshore renewables, which is doable, but it brings cost penalties. How do you prove off CCS? How do you prepare yourself for this world of 2050 and test it? The answer is, you look at what is going on around the world, you utilise that expertise to a degree, but you need to prove it in the context of the UK engineering systems, and the regulatory systems in the UK, and the financial desire to invest in the UK from major investors. All of that says you need to continue with the current commercialisation projects that DECC are doing, which are absolutely critical, and you need to get probably between two and five full-scale plants up and running by the mid-2020s, certainly by 2030, so that the investment community can see the viability or not of those systems. But that is crucial.

Professor Anderson: I would agree with a lot of what David said, but I would probably want to come back a little bit on the CCS issue. First, we are often vague in our discussion around climate change, a sort of nebulous framing of it. We have an 80% target for 2050. What I am saying is that this target has almost nothing to do with climate change. We have said this repeatedly for a long time. It is the cumulative emissions that matter. What happens in 2050 is an irrelevance. It is what happens in the pathway up to 2050. According to the IPCC carbon budgets, we have left it so late that it is what happens between now and 2030. So we are talking about a much tighter timeframe and it must be related to the carbon budget. So if we follow the UK policy at the moment—and if the rest of the world is following suit, which, as I say, it is not anyway—we would not be aiming for 2°C, we would be aiming for something that the CCC and many others have defined as extremely dangerous. Certainly, if you live in the southern hemisphere on a low-lying island, you would see it like that.

We have to be very clear about what we are talking about in terms of the climate change issues. When it comes to issues of affordability, we also have to be careful to say we are not interested in the price of energy, despite the fact that we all talk about that. We are interested in the price of services. No one cares about the price of energy. What you care about is the price of light, or listening to your CD, or hoovering, or travelling a mile. That is about the combination of efficiency, both technical and behavioural efficiency, and the price of energy, and we have to bear that in mind. If we are going to become twice as efficient, which is fairly easy to do in our inefficient world, then you can double the price of energy and the price of services remains the same. We have to move away from the idea where the price of energy is important or is not important.

For the CHP issue, combined heat and power, I am completely in agreement with David and this is really important from the grid perspective. There has been so much discussion around heat pumps, which require a lot of energy, electrical energy, to provide heating and we are wasting more than half. For most power stations, nearly 60% to 70% of the energy goes up as waste heat. We cannot use all of that for various thermodynamic reasons. Nevertheless, we could use a significant proportion of it. If we are going to go ahead with new nuclear stations, we should be seriously considering that.

One of my PhDs, who has now submitted and passed his PhD, looked in some detail at nuclear CHP. He was looking at Hartlepool, because there are many houses around Hartlepool, where they have a nuclear power station. If they go ahead with another one, those houses could be provided with heating at virtually no reduction of efficiency from the nuclear plant. Now, the problem with that is we have economists, and economists in this country like to have high discount rates. If you have a high discount rate, you will build nothing that requires money to be spent on significant capital upfront. Until you change the economists and the discount rate they apply, you will not build things that have a high capital cost, unless it is driven by some other government policies around that.

The Chairman: It is good to deflect the blame in a direction that is—

Professor Anderson: Finally, I come back to the CCS issue. Carbon capture and storage is not a low-carbon option. Let us be clear about this, as people often think of it as zero carbon, yet it has high emissions. These are still quite theoretical assessments because we do not have that many operating plants to assess, but there are a few papers out there saying if CCS is done well they are going to be over 80 grams of carbon dioxide per kilowatt hour, which is five to 10 times greater than that from nuclear or renewables. So it is still a high-carbon energy source, even with a successful CCS, and that is taken across the life cycle of a plant—not just the plant itself, but the emissions across the whole fossil fuel chain, and that is running it fairly efficiently, or as efficiently as we can imagine we can do. So it is still relatively high carbon. You then have to ask the question, going back to quantifying our concern around climate change: does that fit in the carbon budgets? It fits in our domestic budgets for an 80% target. As I say, that is not related to climate change. It does not fit within any decent budgets for 2°C for the UK. We can be quite clear quantitatively about this whether it fits or not.

Q135   Baroness Sharp of Guildford: Let me carry this forward a little bit. You have talked quite a lot about the use of low-carbon electricity for heating and transport, and in particular there has been a lot of talk about heat pumps on the one hand and electrifying the transport system on the other. What sort of timeframe is it envisaged that electric vehicles and heat pumps will be taken up in? Secondly, will the electrification of the whole energy system decrease the resilience by reducing diversity? It is almost bound to, from the discussion we have been having. I think it is fairly clear that this is so.

Dr Clarke: You ask, “Would widespread electrification decrease resilience?” I am sorry to give you the engineering answer, but it depends how we implement it. I know this is a pretty trite answer, but you would design it so that it did not. That is the crux point; you would have to set out to design it so that it did not. That implies you have an approach to designing the system that is controlled quite closely. If you were designing for very widespread electrification, you would almost certainly be looking at local units, if you see what I mean. You would be breaking it up in that sense to give you the resilience. There are ways and means of doing it, but it implies careful thought and it implies there is a group tasked with delivering that system design. This is the kind of thing the IET have been proposing about system architect for the UK and so on. It implies that, and I think it is correct that you need that kind of thought in terms of the design standards.

Baroness Sharp of Guildford: Can I just break in? Does the development of microgeneration make this whole question of design much more difficult?

Dr Clarke: Yes, but again it is a fine engineering challenge, if you see what I mean. Yes, it makes it more difficult. Perhaps I should say, to be more precise, it makes it different. Does it make it more difficult? It is debateable. The real issue to some extent goes to the first part of your question about the rate of take-up and rollout of heat pumps or vehicles. It will be very nice to look at the UK or even England or one of the other nations and say, on average, we would see rollout of electric vehicles to the tune of a few per cent of the car population by 2025. The reality of what you will probably find is that it is very segmented geographically. For the sake of argument—I am not picking this for any particular reason—you may find that Battersea, going back to an earlier comment, becomes heavily electrified in terms of vehicles. That brings all sorts of local issues around the local distribution systems in that area, but nationally you would not even notice it, clearly. I think that is the challenge, the whole point around microgeneration and take-up of some of these new technologies. It brings local issues. Where I live on the end of a relatively small gridline, a very few solar installations can push the voltage up in summer and it causes a problem on the local transformer.

Baroness Sharp of Guildford: I was also going to ask you about the air-conditioning load. Surely the development of solar installations will have some effect on this, will it not?

Dr Clarke: It could do. I say that carefully. It could do. The reality is that solar works when the sun shines. If you want the air-conditioning at the same time, which sounds sensible and logical, then broadly speaking you may argue that the two balance out. If the sun turns off for 30 seconds with a cloud, you have a blip in the system, which has to be managed. The challenge you quickly come to is: how do you manage storage and those short-duration effects? Yes. It is all about the system design, I am afraid, at the end of the day.

Q136   Lord Winston: We are running out of time, unfortunately, but perhaps, succinctly, you would like to just tell us a little bit about the impact of the smart grid and smart meters and what the barriers are to their implementation. Also, if somebody could give us a word on cybersecurity and whether you see that as a problem in the future, that would be helpful as well.

Dr Clarke: I can comment on cybersecurity. The answer is yes. There is quite a serious issue there that needs early consideration. There have been a number of challenges, not just around security but around personal privacy and data, and that is being managed through the smart meter programme at the moment. Clearly, everyone is worried about the ability from a cybersecurity viewpoint for tampering with the electricity system. Equally important, though, is tampering with the demand side, because it is very easy, and I know a number of people are worried about the concept of the ability for somebody to change the charging codes, for instance, in electric vehicles, such that they do not all turn themselves on at night, but they do all turn themselves on at 5 o’clock on a Friday. It could lead to quite a big cascade failure in local areas, so it is a key issue, absolutely.

Lord Winston: Is there a problem about, for example, having a firewall between smart meters and the grid? Does that help? Would that help?

Dr Clarke: I would put it in the class of it is a manageable problem in the same way as we manage cybersecurity in other areas, but it needs early consideration, and it is not just the security issue. It is the personal data privacy issue as well, which just needs to be thought through very carefully, and the Smart Metering Group and National Grid are working on this.

Lord Winston: Finally, if you would—and if that is all right, Lord Chairman—can you give us some estimate about the effect on the resilience of our electrical suppliers? Is that possible, do you think, or do you think that is just another example—

Dr Clarke: I do not have any particular data on it.

Professor Anderson: Again, we still have another two years to go on the project, but from some of the early work on smart meters we know that, again, it depends very much on how they are implemented and how the public respond to them. Remember, these are something the public can be dynamically engaged with, and that is always a challenge to predict. Smart meters may well give us an ability to have greater resilience in the grid.

Also, if you think about that from an intermittency point of view, if we are going to have more renewables on the grid—which we certainly will do in the short term and, from a climate perspective, we should do in the longer term—then it may well be that smart metering techniques allow you to look at the weather for the next six hours, two days and so forth and, via smart metering, start to allow the demand to follow supply. We always have this idea that supply follows demand, but with smart meters and intermittent supply you can then start—at least for some areas of demand—to adjust the demand in accordance with the intermittent supply, if it is as intermittent as some people suggest. That, in a sense, gives you a greater level of resilience, but also bear in mind that smart meters themselves do not save you any energy particularly. They might save you a little bit. They allow you to run your system, if they are appropriately put in place, much more efficiently, make more use of your capital stock and reduce your operating costs and so forth. They do not themselves solve climate change, but they allow you to look at a much more complex system and try to run it in a more efficient manner.

At the moment, the meters we are putting in place, where you effectively just get a little dial that tells you how much energy you have used, these are just less dumb meters. They are not really smart meters. Smart meters are where you start to get some correspondence between your refrigerator and the supply network.

I will not go into cyber issues, but there are lots of protocols you could put in place to try to resolve those, but they are an issue for people who are experts in that area, which I do not think any of us particularly is.

The other thing I would say is just to re-emphasise that smart meters are not just a technical issue. It is very much a personal issue. We will get engaged in the same way that solar power is something we have got engaged with. It changes how consumers use energy. Similarly, smart meters may well do that, so we have to be very careful when we design these things to take account that there will be lots more Rumsfeldian unknowns out there.

The Chairman: We have pretty well run out of time. In fact, we have overrun our time, but I know that Lord Ridley and Lord Peston both want to ask questions. Lord Ridley.

Viscount Ridley: Very quickly.

The Chairman: Very quickly. Ten seconds.

Q137   Viscount Ridley: What I am hearing this morning very clearly is that electrification and renewables policies are a threat to resilience in themselves, or rather, if they are not to be, then they are a threat to affordability. In other words, we can buy resilience in this newer world, but only at a cost.

Matthew Bell: To draw that together with some of the discussions around the links to policy from Lord Rees and smart meters and things, the policy framework is such that we have the 2050 target for 80%. We have set out, and Parliament and Government have agreed, out to 2027 what needs to be done. There is still a lot of policy that has to be developed in order to meet those targets.

We have not touched on the affordability and the cost side of this, but what is clear is that there is a lower cost way of doing it and there are more expensive ways of doing it. That was the example of CCS and that was the example of other things. Right now we do not know what technology mix will be the best technology mix and what demand-side response will be the best demand-side response to get us to where we need to be, and that is why it is sensible to be looking at and trialling and piloting a range of different technologies and a range of different measures. We will see which ones emerge as the most cost-effective ones, but we are, from the Committee’s point of view, trying to maintain ourselves on that least-cost, most cost-effective path and see which ones come out.

In terms of specifically the costs of the intermittency—I appreciate lots of us have said this; it is not that much help right now—we are doing a very detailed piece of work right now on the cost of intermittency and trying to understand what it is. We did a piece of work, which is public so we can certainly share it, in about 2011 that looked at the cost of intermittency, and that estimated that it would add about 1p per kilowatt hour to build the more resilient network that was needed, with the evidence that we had at that point in time. To give you a sense of 1p per kilowatt hour,[3] we are currently delivering energy to households at about 15p per kilowatt hour. That gives you an order of magnitude feel, but there is lots of uncertainty, as we have emphasised, around all these things.

Professor Anderson: You can just quickly turn that on its head. I think you can make an argument that renewables improve your resilience and affordability because they reduce your susceptibility to price volatility of fossil fuels. As more demand comes on the fossil fuel market internationally from China and other parts of the world, the price of fossil fuels will vary significantly. The price of the wind will remain roughly the same. It does not cost much to blow.

Viscount Ridley: The cost of fossil fuels has gone down in price—

Professor Anderson: Yes, but I said volatility, which goes up and down. The price of fossil fuels goes up and down, and volatility is itself an issue if you are trying to spend money on capital. I think you could argue, particularly going forward, that there are benefits from an affordability perspective, and if you look at the capital cost of some of the renewable options now, if you apply very high market discount rates, they do not work out so well. If you apply more social discount rates such as they use in the Green Book, then a lot of the renewables now are on a par with some of the fossil fuels, and you do not have to pay for the fuel afterwards.

The Chairman: With integration costs?

Professor Anderson: Even if you include the integration costs, yes.

Q138   Lord Peston: Just briefly I want to get the context right as we come to a conclusion. Following from Lord Winston’s question on smart meters, which are a good idea but have a downside, what worries me about all our discussion, as Professor Anderson pointed out, is that we have in front of us more computing power than John von Neumann or Alan Turing ever dreamed of when they were winning the war, or rather Alan was, but all of these great technical advances have a downside. You cannot hack into an e-mail if you do not have e-mails. You cannot ruin people’s calculations if they are not able to do incredibly advanced calculations. Do you agree that we must place all this in the context that all the advances—the plus side—clearly must always have a minus side?

Matthew Bell: I agree that there is no free lunch and that there is always a cost associated with these things. In a policy context, the question that was before us today in a climate change context is: what does the world look like without doing anything, what does the world look like with doing something, and what are the costs and benefits of acting compared to not acting?

Dr Clarke: If I can just say, from the point of view of getting to 2050, I was trying to think of it perhaps to some extent in this way: power, heat and transport, cars. We change cars about every eight years, on average, so you have three goes at that between now and 2050, maybe four. We change boilers in houses about every 15 years. You have two goes. That is it. Power stations last 25 to 50 years, so you have one go, and that go is now. When you look at those, the first two, cars and boilers, basically it is a consumer decision, and the technology that goes into your house—anybody’s house—is pretty much driven by regulatory standards and legislation in terms of its efficiency and European standards and so on. The power stations to some extent are driven by regulation and standards and so on, but a lot of it is driven by government policy and what incentives there are to invest. If you had to look at those three, then I think there is an important piece that says the consumer is absolutely critical on two out of three. Government is crucial on all of them, but particularly on the power station one. If you look to getting to 2050, we have about a 10-year window from now to test out whatever options we think we need, and there are options. There is not one size that fits all. They all come with downsides and penalties—all of them, other than business as usual—so now is the time to focus, I think, on the options, to test the options, and then we have to go for a rollout.

The Chairman: I had better close the session now because we have overrun. We are most grateful to you. We have not, I suspect, had a total meeting of minds on every subject, but we have agreed, I think, there is no such thing as a free lunch, we have agreed that we need to test the options and that the issues are what we do not understand as much as what we do understand. Thank you very much. If we have been at times scratchy, I apologise, but that is because you have stimulated a lively discussion. Thank you very much.