Hill Dickinson and Place North West held a roundtable discussion at Liverpool Local Enterprise Partnership's office in 12 Princes Parade. Extracts from the discussion, covering topics such as skills, doing business in Liverpool and dealing with government red tape are summarised below.
The guests around the table were:
- Chris Acton, lead renewable consultant, Carbon Consultancy Company
- Les Bellmon, senior regeneration consultant, Eldonian Group
- Christine Darbyshire, senior environment development manager, Liverpool City Council
- Mark Knowles, head of low carbon, Liverpool LEP
- Richard Mathias, chief executive, Belvedere Energy Investments
- Alex McCann, partner, Hill Dickinson
- Steve Pimlott, senior consultant, Arup
- Alan Pugh, partner, Hill Dickinson
- Guy Shorrock, building surveyor and energy assessor, Aldrock Chartered Building Surveyors & Energy Assessors
- Peter Sutton, head of operations, DONG Energy Power (UK)
- David Williams, business development manager, Cammell Laird Shiprepairers & Shipbuilders
- Paul Unger, editor, Place North West.
Policymakers in Merseyside are devising a plan to tap into the rapidly emerging hydrogen fuel market among car manufacturers and oil giants as part of its support for firms operating in the low carbon economy.
Low carbon is one of the LEP's priority sectors targeted for growth in the coming years and, according to Mark Knowles, head of low carbon at Liverpool LEP, the sub-region needs to make the most of its assets in hydrogen generation and distribution.
Knowles said: "A unique selling point for us as a city region is hydrogen capacity. The city region has a set of facilities and assets probably unique to Europe in that it has large scale hydrogen generation centred around Halton. It has the only hydrogen distribution network in Europe. There are pipelines that run out from Ineos Chlor in Runcorn and we've also got hydrogen fuel cell development companies."
In August, Amanda Lyne, co-founder of Runcorn-based ACAL, which invented a new type of fuel cell, joined the LEP board.
The LEP, Knowles said, was "trying to corral a number of facilities in a similar way that we worked with a lot of partners around the table on offshore wind a couple of years ago to pull together a coherent strategy to exploit the assets we have."
Birkenhead-based ship repair engineer Cammell Laird moved into offshore wind turbine production, and is currently producing 158 turbine shafts for the Gwynt y Mor wind farm off North Wales. As well as bidding for further offshore work, Cammell Laird is targeting the nuclear sector, to build the large containers for the next wave of nuclear power stations, if they are approved by the government.
Knowles said the automotive and oil industries were investing heavily in hydrogen power technology globally and Liverpool city region could put itself in a strong position to benefit from this low carbon niche.
Other initiatives within the low carbon work at the LEP include increasing boat tonnage for biomass material through the port and developing new glazed insulation products with Pilkington and Liverpool University.
Local firms say they are missing out on contracts in the renewable energy sector because investors from overseas favour their own fellow national contractors.
French and German energy giants are sourcing up to 90% of content for their offshore windfarm fields around the UK from French and German companies, making it difficult for UK firms to get traction in the market, according to David Williams, business development manager at Cammell Laird Shiprepairers & Shipbuilders.
"These are UK national infrastructure projects and the UK is not being allowed to actually have a place in the building of these fields," said Williams.
Gwynt y Mor off the North Wales coast is backed by three main investors, all of them German, including the city state for Munich. Cammell Laird did manage to win the contract to supply 600-tonne turbine collar pieces for the Gwynt y Mor field. Williams said the shipyard's unique position on the Mersey and skills put it in a good position to fabricate and offload large heavy products for movement by sea. Cammell Laird is currently working on plans to make the offshore substation platforms with other partners.
However, in other fields Williams said contract notices advertised by Continental investors in the Official Journal of the European Union were "strategically formulated" in favour of overseas suppliers.
Williams urged the UK government to back domestic infrastructure projects and follow the lead of countries like Austria where city states invest in their own local power supply.
Meanwhile, a lack of investment by local authorities is also harming prospects in the renewable sector. Richard Mathias, chief executive of Liverpool-based family wealth investor Belvedere Energy Investments, said he had invested in 120 sites across the UK but it remained a "frustration that we've not been able to invest enough money in Liverpool and the region".
Belvedere invests in large-scale commercial solar panel installation, saving large occupiers money on energy production and sharing the return on electricity sold into the National Grid.
Mathias continued: "We've spoken to Liverpool City Council on a few occasions and we've said 'look this is what we do and if you want to talk come back to us' and then we don't hear anything. Basically there are more proactive people around the country and we're going to take the best opportunities."
Christine Darbyshire, senior environment development manager at Liverpool City Council, said the policy landscape did not help planned investment as public energy initiatives changed every two years and the government had not set out its long-term energy policy.
Darbyshire added: "And given the budgetary cuts that are coming into local government it's very hard to put that much energy into something on these sorts of two-year spans."
Delays by the official energy regulator in switching on new power supplies to the National Grid are putting renewable energy investors off long-term commitment to the sector.
"Ofgem is hideous, awful, ghastly," said Richard Mathias, chief executive, Belvedere Energy Investments, based in Liverpool. "To the point where I've been to Ofgem's offices just by the side of Parliament and sat with the renewables officials and said 'what's your end game here? Why are you making this so difficult? You've asked us to come in. You've asked the private sector to come and help you to hit your targets by 2020 and you do everything in your physical power to stop us from actually switching these things on and from getting what we rightly deserve.' We've got four cases in dispute at the moment, which probably are going to go to litigation with Ofgem now."
Mathias said the crux was the tariff change date when one supplier takes over from another. The grid cannot act fast enough to meet the switchover because of a backlog of applications.
"So, they're having to put back dates over that period and then they're saying 'well you weren't in in that period, you're actually in the next period.' It absolutely screws your model.
"They say they're sorry if you think it's adversarial but honestly they don't want to know.
"It's to the point where there's easier investments to make away from the sector completely."
Les Bellmon, senior regeneration consultant, Eldonian Group, agreed, saying that switching the energy on at large house projects he advises on takes longer than going through planning, public inquiry or any other aspect of the regulatory programme.
The renewable energy market is growing, driven by dwindling natural resources and rising energy prices, but the policy, legislation and taxes are so volatile it is difficult to predict where the industry will be in five years' time, said Christine Darbyshire, senior environment development manager at Liverpool City Council.
The renewable energy sector would be best served by local public-private collectives of interested companies and councils forming which would support each other through mutual action and shared strategies, Steve Pimlott, Arup, who advocated devolved local ownership of power supply.
Schools and colleges need to engage with employers and focus on improving science, technology, engineering and mathematics skills among young people if the potential of the energy sector is to be realised.
The panellists agreed that none of them started out in life thinking 'I want to work in low carbon' and they all came from other disciplines. As low carbon becomes more mainstream that should change though. Companies don't necessarily need lots of people who have got environmental management skills, but you need good engineers, you need good technicians, you need good accountants.
The university technical colleges being built around the region, including the maritime and superport colleges in Liverpool, should help improve the situation. Employers often need specific skills even from the youngest recruits; working at height, sea survival – but have we got the competencies here? The offshore contractors in Liverpool Bay and Morecambe Bay often use a training provider for sea survival skills in Middlesbrough. Why?
If and when offshore windfarms evolve from fields of 25 turbines to 1,000 will we have the labour supply to keep pace?
A couple of people around the table cited ScottishPower, which employs thousands of people in the region but a large proportion are anecdotally due to reach retirement age in the next decade. Will the skilled workers be coming up behind them to fill their boots? If not, why didn't we do something about the shortage a decade earlier?