Lord Truscott and the scandal of Phase 2 Low Carbon Building programme

Lord Truscott has been in the news recently. He is not terribly well known and I had not heard of him when I made a complaint to Alistair Darling about Phase 2 of the Low Carbon Building programme two years ago. Mr “framework” concept of approved suppliers but did not bother to notify the solar thermal industry’s trade association, the Solar Trade Association that a framework was being initiated and companies could submit a tender. That Darling was then Secretary of State at the Department of Trade & Industry and the Department had devised a scheme to provide 30% subsidies for renewable energy for not for profit organisations. They had decided on a meant that most of the solar thermal industry was unaware of the framework until it was too late. Genersys found out after the framework had been decided and I wrote to Mr Darling complaining and Mr Darling referred my letter to his then almost anonymous Energy Secretary, Lord Truscott. Lord Truscott is apparently an expert on the old Soviet Union and has written a biography of Mr Putin. At the time it struck me as an odd choice for energy secretary, because he seemed to have no apparent energy expertise. In the United Kingdom politicians frequently change jobs in government. At a senior ministerial level, sacking a minister or moving him or her to another post is a way that Prime Ministers use to control their government; a minister who seems to be getting too much publicity or appears to be a strong candidate for leader is often downgraded, or shunted into lower profile job. Of course Gordon Brown was immune from such shunting, presumably because of his agreement with Tony Blair, but I digress.

According to www.theyworkforyou.com Lord Truscott voted very strongly against laws to stop climate change, and he seems to support coal fired electricity generation, so he has no environmental credentials; such credentials seem to be an essential qualification for an Energy Minister, even two years ago.

When I wrote to the Government I pointed out that the Low Carbon Building Programme Phase 2 operates against the public interest by restricting framework suppliers instead of inviting wide competition so that the not for profit organisations are assured not only of a 30% subsidy (since the framework was announced this has been increased to 50%) but also of the best products on the market at the most competitive prices. In effect Lord Truscott and his cohorts have created a monopoly of suppliers for organisations that need subsidies.

I know of nowhere else in Europe that this way of doing things is undertaken, and nowhere in the United States of America. In the majority of the developed world if your product qualifies and you qualify as an installer then you can access the subsidies for your customer. Only it seems the Uk government and Lord Truscott knew better. My concerns, which I volubly expressed at the time on the Genersys website were shared by many other solar thermal industry leaders.

They also seem to have been shared by some politicians because in March 2007 Lord Razzell asked Lord Truscott then Energy Secretary the following question in the House of Lords.

Whether they (the Government) will review the existence of the framework agreement for phase 2 funding from the Low Carbon Building Programme, with a view to opening phase 2 funding to all accredited microgeneration installers. 

Lord Truscott replied

“The aim of phase 2 of the Low Carbon Building Programme is to achieve reductions in the costs of microgeneration products, against a 2005 baseline, by stimulating the industry through the guaranteed demand provided by the £50 million of capital grant funding announced in Budget 2006. A key barrier to widespread uptake of microgeneration products is the up-front cost of installations. The industry has consistently informed us that lack of certainty regarding future volumes is prohibiting the investments in the supply chain that are required to drive costs down. After consultation with industry representatives, we determined that to get the investment in the supply chain required to drive costs down and the microgeneration industry forward, greater certainty about future demand is required. A framework agreement was developed which provides seven lead contractors, chosen through a competitive process, with this greater certainty of demand. The aim is that investments made in the supply chain by those. Framework suppliers are able to sub-contract the provision of their services to other installers companies will benefit the industry as a whole and lower prices will filter across to all. To date, we have been notified of 49 sub-contractors, and we expect that this list may grow. We see no need to review the framework agreement at present.”

There are three things wrong with Lord Truscott’s answer. The first is that the seven lead contractors for Phase 2 Low Carbon Building programme were not chosen through a competitive process. There were only four of them chosen for solar thermal and they were chosen from a select few who were close to Government and could discover that a “competitive process” or tender was up for grabs. Many competent solar thermal businesses with good products, not just Genersys, were excluded from the tender process and only found out about it too late.

Many fledgling businesses that planned to sell solar and other renewables to the non profit sector were ruined by the imposition of a framework supply; these had no place to go and are an essential part of any industry; just because there are grants does not mean to say that organisations will buy.

The second thing that is wrong about Lord Truscott’s answer is that sub contracting to a few framework suppliers adds to the cost, not reduces it. Does Lord Truscott think, for example, that an installer working as a sub contractor for British Gas (a framework supplier that has almost no solar thermal experience) mean that the overall price of the system will be the same as if the customer could access the installer direct, without having to allow for British gas’s margin?

Thirdly, a modest UK solar thermal plan for subsidies (ignore the reference to £50 million, the solar thermal part of this is £5 million) will not in any way prove an investment in the supply chain; around 80% of solar thermal panels are sourced from abroad and in the case of every foreign manufacturer a small uplift in requirement by the United Kingdom will not drive prices down. At best it may enable a manufacturer to increase production by one or two percent. Phase 2 Low Carbon Buildings programme was very badly handled by the Government, with Lord Truscott as Energy Minister. Phase 2 of the Low Carbon Building Programme cannot be said to be successful, as only 65 awards totalling £345,806.19 have been made for solar thermal systems in the past two years.

There has been no effect on supply chain or prices, and there are still many industry concerns about the way in which Phase 2 is hampering the development of the solar thermal industry. Lord Truscott has hardly covered himself in environmental glory since, with his voting record on climate change. My view two years ago was that Phase 2 of the Low Carbon Building Programme was a scandal. I tried to interest journalists in the scandal then; perhaps they will be more interested in looking at the matter today.

You can read my correspondence with Lord Truscott at http://www.genersys-solar.com/news.asp?ID=104

17 Responses

  1. Robert,

    The Uk has had its chance to implement a sustainable Energy policy, the chance has not been used, the current Government in its final days has chosen to attempt to save the banking industry.
    I am reading that there is money for a large £30 Billion Renewable Energy Scheme, enough to provide 5% of the UKs Electricity! it does not look very good for wildlife in the Severn, Ed Miliband can find £30 Billion even in these hard times!?

    How many Solar Thermal installations could be installed for this £30 Billion? Given that there are 24.7 +/- Households in the UK then it would be £1200 +/- per household in the UK so I think that a great proportion of the households in the UK could have Solar thermal installed.

    What percentage of the UK energy total requirements could this £1200 per household provide?

    With regards to your correspondence with Lord Truscott, the £7 Milliion (£3.50 per UK household) compared to this £30 Billion Severn Estuary, looks like you are fighting for crumbs of bread falling onto the floor of a feast!

    I think you are wasting your energy! I suggest that you close down Genersys here in the UK and use your knowledge and capability in another country which has recently modified its tax legislation to assist a much needed growing Renewable Energy Industry, that country is The Philippines with its Renewable Energy Act 2008, The Philippines is the world’s Number one Geothermal Electricity producer using a similar tax free investment scheme.

    Best Regards Peter.

  2. I agree with Robert Kyriakides. Indeed, Lord Truscott has gobsmacked me twice now.

    The first gobsmacking was when I heard him speak at at evening event about temperatures being measured in percent- rather than in degrees! How competent can our Energy Minister be? I wondered. Then i dismissed the thought. Perhaps I should not have.

    I was re-gobsmacked to hear the name of Lord Trustme in connection with fees and sleaze. Suddenly questions clicked into place…

    Perhaps Lord Trustnot was too busy with his priority work (his paid interests) to take (not just Robert’s but also) our correspondence on what we see as the improper allocation of grants seriously? Perhaps this being too busy was what stopped him from properly investigating similar matters to Robert Kyriakeses’ which we at Solartwin also raised with him, but from a different angle?

    In summary, the concerns which we communicated to Lord Stuffgut were (and still are) that state grants worth millions of pounds were being unreasonably withheld from the funding of what are valid and in some cases potentially superior solar heating technologies – seemingly because they were not in favour with the main players in the industry at the time. That it seemed that unfair favouritism might have been taking place.

    This is why we would like to see a genuinely independent body investigate the whole issue of the whole Low Carbon Buildings Programme was set up as well as how funds were then allocated.

    • Barry

      Thanks for sharing your experiences of the former energy minister, a man who decided and implemented UK energy policy. The confusion between degrees and percentages is perfectable understandable for a man who is a consultant to so many industries.

      Robert

  3. Barry, May I suggest that you and Robert both pack up your suitcase + briefcase and head off to The Philippines, to take advantage of the new tax incentives, I guess the Solar Voltaic pump would have the lack of reliable electricity in the philippines covered!
    Well the guy at number 10 Downing street is advocating globalisation, so given the lack of incentive here in the uk I you should do exactly that whatever the scale of a renewable energy business in the philippines it has a lot better chance than here in the uk!
    So Solartwin is also fighting for the crumbs as well, may I say as a young new entrant to renwable energy and hoping for a career that the prospects here in the UK do not look as bright as they should do, it is sad that those with solutions are fiercely competing to trade instead of getting on with the job in hand due to lack of Goverment support and incentive. There should be a shortage of technicians capable of working with Renewable energy yet there is a surplus I have tried to get specific experience through employment for one year now despite having a great deal of qualifications Technical & Business.
    I am studying T206 Renewable Energy at the OU but I don’t think I will be working in the UK after I complete that course.
    I think its will be Philipppines any Renewable energy is qualifies for 0% tax, so you would need to wait like a dog, for some Quango appointed Lord to bless you with a subsidy!

  4. Any chance of a job by the way? ! I think you have got my CV.

  5. Did you check out the Wikipedia page for Lord Truscott?

    Note: Politics + Peerage + corruption + Mining & Energy !

    Contents [hide]
    1 Political career
    1.1 Political organiser and MEP
    1.2 Peerage
    1.3 Corruption allegations
    2 Involvement with energy and mining firms
    3 Bibliography
    4 See also
    5 References
    6 External links

    Truscott is a consultant and non-executive director working mainly with non-renewable resource extraction and public affairs companies throughout Europe and Russia.

  6. Lord Truscott’s Parlimentary Register of Lords Interests he really should not be in the job he is in:

    http://www.publications.parliament.uk/pa/ld/ldreg/reg23.htm

    Lord Truscott represents Russia a major exporter of Gas to the EU as a parlimentary Ambassador, owns an Energy consultancy company working mainly for the oil industry, etc etc he is not at all impartial.

    Of the the Lords investigated by Channel 4 it would seem he has the longest list of interests:
    http://www.channel4.com/news/articles/politics/domestic_politics/peers+investigation+full+list+of+interests/2911182

    The Channel 4 video about the Peers investigated including Lord Truscott is here:http://link.brightcove.com/services/link/bcpid1184614595/bctid9055101001

  7. Robert, I think that you may have a better understandinding about Lord Truscott,the Daily Mail today describes him as “Slippery..” that sounds just like Sid!

    “…An official who worked with him in the Labour Party said: ‘He was a slippery character. He was like a bar of soap. He would be Left-wing talking to one person and Right-wing talking to another…”

    http://www.dailymail.co.uk/news/article-1133117/Revealed-The-secret-Soviet-past-sleaze-peer-Truscott.html

    • I have never met the gentleman, Peter. Perhaps if I did I would understand why he was “ennobled”; for the time being the presumption of innocence prevails in respect of the allegations he faces. In respect of his judgment, the way he has treated energy policy speaks for itself.

      Robert

  8. Unfortunately the Government of the UK is just as corrupt as those countries it criticises, unless there is some form of money to be made, this Govenment are not interested in the Environment, all they do is raise taxes in the name of been “Green”, but these taxes are never used for any schemes that are a benefit to the environment, the billions that must of been raised from fuel tax, that has been added in the name of been “Green”, where has this all gone, I look around the roof of the UK, and I travel a fair bit, there are hardly any solar panels installed, thermal or PV and yet in countries such as Germany, it is unusual to see a house without solar.

  9. I agree that the Government of the UK seems just as corrupt as those countries it criticises. What amazes me about UK is the level it goes to create elaborate and gentlemanly pretences that it is not corrupt.

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