2. The 2006 Energy Review Regional Stakeholder Seminar: Energy RD&D and Transport 23 February 2006 Carl McCamish Deputy Head of Energy Review Team

3. Energy Review: New Technologies and Transport Regional Seminar Outline 2003 Energy White Paper Goals and the Key Consultation Questions Current Situation - Transport Current Situation – RD&D Discussion Questions

4. Energy Review: New Technologies and Transport Regional Seminar Energy White Paper Goals 1. Reducing carbon emissions 2. Maintaining reliable energy supplies 3. Promoting competitive markets 4. Ensuring that every home is adequately & affordably heated

5. Energy Review: New Technologies and Transport Regional Seminar Questions in the Consultation Document (Summarised)  What more could the government do on the demand or supply side to meet our CO2 reduction targets in the medium and long term?  How do we develop our market framework for delivering reliable energy supplies ?  Are there particular considerations that should apply to nuclear ?  Are there particular considerations that should apply to carbon abatement and other low carbon technologies?  Steps to take towards ensuring that every home is adequately and affordably heated ?

6. Energy Review: New Technologies and Transport Regional Seminar Questions in the Consultation Document continued … Submissions are also requested on:  The long term potential of energy efficiency measures in transport … and how best to achieve that potential 4.Potential measures to help bring forward technologies to replace fossil fuels in transport … in the medium and long term

7. Energy Review: New Technologies and Transport Regional Seminar Transport – rising emissions…

8. Energy Review: New Technologies and Transport Regional Seminar Transport – …despite improving efficiencies

9. Energy Review: New Technologies and Transport Regional Seminar Transport drives our reliance on oil Other – 1.2% Sources of fuel for transport Oil-based products - 98.8%

10. Energy Review: New Technologies and Transport Regional Seminar Demand for oil is dominated by transport Transformation and Refineries 8% Industry 10% Other 5% Road transport 47% Air transport 15% Other transport 2% Non-energy use 13% Uses of oil, UK 2005

11. Energy Review: New Technologies and Transport Regional Seminar Future technology options in transport? Short-term- Improved fuel efficiencies (2006-2015) - Hybrids Medium-term- Sustainable Biofuels (2015-2030) Long-term- Renewable Hydrogen (2030-2050)

12. Energy Review: New Technologies and Transport Regional Seminar Current policies Reduce traffic (vehicle/passenger km) e.g. “Smarter Choices” Improve fuel efficiency (litres per km, mpg) e.g. EU Voluntary Agreements Lower the carbon content of fuel (grams per litre) e.g. the Renewable Transport Fuels Obligation

13. Energy Review: New Technologies and Transport Regional Seminar RD&D – scope of Review Priorities: Analysis of the current state of development of specific low carbon technologies Working towards a Government low carbon RD&D strategy Review of the organisation of the current landscape of Government funding for low carbon RD&D Covers all low carbon energy technologies (electricity, heat, transport, efficiency, enabling/ supporting technologies).

14. Energy Review: New Technologies and Transport Regional Seminar RD&D – structure for thinking

15. Energy Review: New Technologies and Transport Regional Seminar RD&D – current funding bodies (not comprehensive) Basic R&DApplied R&DDemonstrationInternational DemandCarbon Vision, UKERC Defra, DfT, ODPM, Carbon Trust Carbon Trust[REEEP] Conventional sources EPSRC, [TSEC]HSE, Defra, DTI, Technology Prg ITI Energy, [NaREC [CSLF, GEN IV, M2M] Low carbon sources Supergen, Fusion, [TSEC], UKERC Technology Prg, Carbon Trust ITI Energy, RDAs, Carbon Trust, DTI Capital Grants [REEEP] Infrastructure[TSEC, Supergen, DG Centre, UKERC] [Technical architecture] ITI Energy[IPHE]

16. Energy Review: New Technologies and Transport Regional Seminar RD&D – current UK funding mechanisms (not comprehensive) Academic research supported by the Research Councils (£70m by 2007/2008). Industry-led R&D supported by Technology Programme (£35m since 2004) and the Carbon Trust’s R&D Programme. Various capital grants schemes for demonstration stage (totalling over £300m). Direct Government funding not the only possible intervention – deployment-stage interventions could be designed to incentivise RD&D as well by creating market pull. Includes:

17. Energy Review: New Technologies and Transport Regional Seminar Barriers to deployment (Unit) cost Planning Regulatory Grid Infrastructure Lock-in to high carbon technologies Availability of private sector financing R&D only part of what’s needed to achieve deployment. Other barriers:

18. Energy Review: New Technologies and Transport Regional Seminar Questions for discussion Transport: RD&D: Strengths and weaknesses of current transport policy, and further steps Cost of carbon abatement compared to other sectors Technology-neutral vs. picking winners Balance between supporting deployment and supporting RD&D Drivers and barriers to industry RD&D, and which interventions can affect them Organisation of the current Government funding landscape