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10 | 23rd - 29th May 2014 | UtILIty WEEK Interview work on alternatives to big nuclear like the European Pressurised Water reactor destined for Hinkley Point. The ETI is looking into small, low-cost modular reactors – which, Clarke says, could have greater economic value to the UK and a lower cost capital. The three "lowest cost levers" – CCS, nuclear and biomass – are, Clarke says, among six "big ticket items" that will serve up "the lowest cost energy system to 2050 that is sus- tainable and secure". They are: • greater energy efficiency to reduced demand; • CCS to exploit low-cost fossil fuels; • new-build nuclear taken to the maximum affordable extent; • biomass – particularly with CCS to extract carbon from the environment through "negative emissions"; • gas in all its forms to go into heating and CCS; • offshore renewables. "It makes sense to establish offshore wind as a hedge in case the UK doesn't deliver success on other technolo- gies," he says. Taking a still broader view, among Clarke's defining tasks for the ETI is "proving new business concepts". Where does he see that happening? "We have worked with the financial community – major insurers and banks – to find what would incen- tivise them to put funding into a CCS project," Clarke says. This work was conducted in partnership with climate change investment management firm, the Ecofin Research Foundation, "someone very credible with the financial community." He says this partnership has given the ETI "traction with the industrial and financial communities", that goes beyond demonstration projects. "It's been a long process but we have brought the engi- neering and technology piece together with the finance piece," he says. ETI's closer linkage with the financial players has been reflected in a change in the make-up of the organi- sation's people. "When we started ETI it was predominantly an engineering and technology organisation. If you went now into our strategy team looking at future UK energy systems planning, 20 per cent are economists," he says. Clarke emphasises that an important element of the ETI's strategy is to focus its efforts not on the technolo- gies and other measures that are already established in the market. Its support is aimed at technologies that meet the low-carbon, secure and sustainable criteria but which need to be better proven as sound commercial prospects. "If there is a very clear market, we wouldn't get involved. The market would invest because they can see the return," says Clarke. "The challenge has, over the past six or seven years, been in part the economic crisis but also the industry's reticence to invest unless it can see a short-term return," Clarke adds. He goes on: "Privatisation slashed research and development and the industry was sweating its assets. In terms of big technology leaps, there were no plans for new assets. "Then we had an economic crisis, which meant there were still no plans for new assets because nobody could afford any. "Now we see a programme to rebuild the energy system with a recognition that it will cost hundreds of billions of pounds to cover everything." As well as changes to address the growing impor- tance of cultivating a relationship with the investment community, the ETI has also embraced consumers' mores. "The most challenging has been in heat delivery," he says. Aside from investigating smart heat technologies, the ETI has embarked on studies into customer behaviour. "This has been an emerging journey because we started on the technology side then realised we needed to look much more at business models and consumers." The work will include studies of "why people leave windows open then turn up the central heating – that sort of thing". The business model work might include looking at how heat is paid for: "Do we pay for fuel like now or maybe we pay for comfort?" The bulk of the £80 million ETI smart heat pro- gramme will end up being spent on engineering and technology but "the entire programme will be based on the consumer view of requirements", Clarke says. Clarke has been at the helm of the ETI for almost its entire existence. He has steered it through much change – internal and external – including: changes in its technology focus to include nuclear; change in economic circumstances as the recession recedes; and a shi away from a pure technology focus to encompass what motivates the banks and the consumer. Its funding has until 2017 to run. By that time the UK will be operating its capacity mechanism. Possibly it will be closer to having a shale gas industry. Maybe tidal and wave power will be looking for refinements akin to the way offshore wind is doing so now. And beyond 2017 a lot of the ETI's investments are expected to be generat- ing revenue. It seems reasonable, then, to assume that there will be an abundant array of engineering, econom- ics and consumer-related opportunities for the ETI. Clarke, however, is noncommittal about the future of the ETI beyond 2017. "We'll see," he says. "In five years' time will we still be operating? I don't know. We have had a successful independent review and this year we are looking beyond 2017 and are in discussions about future investment with government and industry." He is looking down a road that includes still more change. For starters there is a general election, shale gas possibilities and Scottish independence, all of which could have an impact on the prospects for renewables. But one thing at least will endure, says Clarke: "There will still be a need in the UK for what the ETI does." "Privatisation slashed R&D and the industry was sweating its assets. In terms of big technology leaps, there were no plans for new assets." David Clarke – genetic engineering Dr David Clarke is a Rolls-Royce engineer – literally and metaphorically. He is a Fellow of the Royal Academy of Engineering, a Fellow of the Institute of Materials, Metals and Mining, a Fellow of the Energy Institute and a chartered engineer. His grandfather worked on Rolls-Royce car engines, and his father worked on Rolls-Royce aircra engines. He joined the ETI as chief executive in 2008 from his previous role as head of technology strategy at Rolls-Royce. The ETI is an industry and government partnership set up to evaluate and demonstrate low-carbon energy systems and technologies in power, heat and transport "in line with the strategic needs of the UK's future energy system." Its work is in nine areas: offshore wind, marine, distributed energy, build- ings, energy storage and distribution, smart systems and heat, carbon capture and storage, transport and bioenergy. Clarke defines the ETI's role as: • proving new technology and business concepts; • creating and benefiting UK economic development; • building a better understanding of UK energy challenges; • creating new innovation collaborations informing policy.