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First Report on the Economic Challenges Facing Northern Ireland

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First Report on the Economic Challenges Facing Northern Ireland Session 2006/2007 First Report COMMITTEE ON THE PREPARATION FOR GOVERNMENT Report on the Economic Challenges Facing Northern Ireland VOLUME 4 WRITTEN EVIDENCE SUBMITTED TO THE SUB-GROUP, PARTY SUBMISSIONS AND RESEARCH PAPERS Ordered by the Committee on the Preparation for Government to be printed 4 September 2006 Report: 1/06R (Committee on the Preparation for Government) Published by Authority of the Northern Ireland Assembly by the Stationery Office: Belfast £22.00 Terms of Reference Terms of Reference 1. To identify the major impediments to the development of the economy in Northern Ireland 2. To consider fiscal incentives that may promote foreign direct investment and indigenous investment. 3. To consider how other matters including an economic package/peace dividend could contribute to economic regeneration and how this might be delivered. To report to the Committee on the Preparation for Government by 25 August 2006. iii Contents Terms of Reference iii Appendix 4: Written Evidence submitted to the sub-group Section 3: Written Evidence 1. Action Renewables 1 2. Association of NI Colleges 7 3. BT/Northern Ireland Chamber of Commerce and Industry 11 4. Construction Employers Federation 43 5. International Centre for Local & Regional Development 47 6. Economic Development Forum 55 7. Freight Transport Association 81 8. Mivan 93 9. NI Manufacturing Focus Group 97 10. Northbrook Technologies 101 11. Planning Service 103 12. Quarry Products Association NI 109 13. Rural Development Council 111 14. Special EU Programmes Body 119 15. Tourism Ireland 121 16. University of Ulster 129 17. UU Tech 135 18. Youth Council for NI 139 Report on the Economic Challenges Facing Northern Ireland Section 4: Party Submissions 1. Alliance 143 2. Democratic Unionist Party 148 3. Sinn Fein 151 4. Social Democratic and Labour Party 155 5. Ulster Unionist Party Assembly Group 169 Section 5: Research Papers 1. John Bradley – Working Paper 22 177 2. John Bradley – Working Paper 23 205 3. Peter Gilleece – Innovation paper (3 Aug 06) 231 4. Peter Gilleece – Education paper (9 Aug 06) 237 5. Peter Gilleece – Economy Paper (16 May 06) 259 6. Prof Harris – Assessing the Case for a Higher R&D Tax Credits + ERINI Statement 265 i Appendix 4 Section 3: Written Evidence Written Eidence Action Renewables Economic Challenges facing Northern Ireland 1. To identify the major impediments to the development of the economy in Northern Ireland. Location Northern Ireland is isolated on the edge of the UK and the edge of Europe. This has major implications when trying to comply with national and European legislation, forcing business in Northern Ireland to pay more to remain competitive with European counterparts. For example, shipment costs of renewable energy technologies manufactured in mainland Europe, to Northern Ireland are more expensive than to GB or other European locations. Size Northern Ireland has a relatively small geographic area and population. This makes it harder in many ways for Northern Ireland as a distinct entity, to be self-sufficient. European legislation promotes self-sufficiency. Northern Ireland has no indigenous fossil fuels (other than lignite), and is reliant on imported fuels to generate the majority of electricity and domestic space-heating. Brain drain Without an improved employer base in NI, many graduates leave to GB in search of employment. This is a self-perpetuating situation, partly caused by a negative perception of NI compared with other locations. Infrastructure The proximity principle, enshrined in European legislation, dictates that waste produced should be dealt with as close as possible to the location it was generated. Northern Ireland has struggled to develop the necessary waste management infrastructure to deal with the quantities of waste produced in NI. This argument also applies to energy, that it should be produced as close as possible to the point of use. Perception Northern Ireland does not have the reputation abroad which is enjoyed by GB or RoI. This limits investment. Report on the Economic Challenges Facing Northern Ireland 2. To consider fiscal incentives that may promote foreign direct investment and indigenous investment. Greater development of renewable energy moves NI towards self-sufficiency. Promotion of the renewable energy assets of NI. Opening up of the assets of Iraq has triggered investment there. Could the same ideas be applied to wave/tidal/offshore wind/biomass resources in NI? Development of a Northern Ireland Development Plan, similar to the RoI NDP as a guide for foreign and local investors. All subsequent governments in NI would then follow the Plan, providing a greater sense of investment security. 3. To consider how other matters including an economic package/peace dividend could contribute to economic regeneration and how this might be delivered. Developing the potential of distributed, embedded generation of electricity, alleviating the demand on imported fossil fuels. Northern Ireland has a desire to move towards self-sufficiency. For example, early indications are that the EREF Household Fund as announced by Peter Hain has received a majority of applications for pellet boilers. This is explained by rising oil prices and the feeling within the population of Northern Ireland that it is unwise to be subject to global variations in prices beyond our control. Northern Ireland is literally at the end of the pipe for gas and oil, and this does not sit well with the population. The issues of fuel security, rocketing energy prices and the impending threat from climate change have placed an increased emphasis on the availability of renewable sources of energy and it has instilled a renewed focus on what resources are available in NI and how we should deploy them. There is clearly an opportunity to bolster the Secretary of State’s EREF and integrate renewable energy development into any economic regeneration programme. Written Eidence Renewable Energy Technology Issues relevant to Economic Development in Northern Ireland Andy McCrea Director, Action Renewables Further to our previous brief submission; The following issues are relevant to the development of renewable energy, particularly in relation to business applications and investments; 1. R&D Marine Technologies Ireland as an island and Northern Ireland in particular, is very well placed from a resource perspective, in respect of marine technology development (specifically with marine current tidal conversion devices). These devices are not yet at the fully commercial stage and would need investment and development over the next five to ten years. Previous work done in Northern Ireland universities, notably in QUB, has placed NI at the forefront of world performance from a knowledge base. Current studies underway at Strangford Lough with a tidal energy MCT device, will also give a greater understanding of the energy in this resource and how it may be converted to provide significant amounts of renewable electricity. Similarly, Ireland as an island and the west coast of the island in particular (and perhaps in very limited areas around NI), is very well placed from a wave energy resource perspective. Considerable effort has already been expended on wave energy conversion devices, particularly at QUB although they are not yet at the fully commercial stage and would need investment and development over the next five to ten years. Previous work done in NI universities, again notably in QUB (by Professors Adrian Long and Trevor Whittaker), has placed NI at the forefront of world performance from a knowledge base. A number of R&D seeded companies have recently been established to further develop these devices. Biomass Technologies It is widely recognised that Northern Ireland has a good climate, appropriate soils and increasingly, an excellent knowledge base for the exploitation and greater deployment of biomass technologies. There are a number of streams to this technology including coppiced willow, and purpose-grown energy crops (oil seed rape & perhaps Miscanthus), although wood waste from a range of sources grain and other farm produce can be appropriate fuels. There are significant renewable heat opportunities and perhaps a more limited biomass electricity opportunity (through gasification). A significant knowledge base and some excellent early commercial experience of these technologies exists locally. Report on the Economic Challenges Facing Northern Ireland Energy From Waste EfW holds significant potential for NI and there are also a number of opportunities around raw farm wastes (and food processing wastes) using anaerobic digester plants. 2. Skills and Education Action Renewables in partnership with SEI in RoI have developed a major renewable energy skills initiative called the Renewable Energy Installer Academy (REIA). We have also recently concluded a RE jobs prospects report for NI. There are significant gaps in this market at present and an over-arching strategy which recognises the opportunities and which puts in place the required skills training framework needs to be developed as soon as possible. 3. Renewable energy based NI companies There are a number of companies based in NI which have taken the lead in the manufacture and servicing of renewable technologies; Thermomax (Bangor) – solar thermal hot water panels manufacture, principal markets Spain, Germany, Europe. Copelands (Cookstown) – Heat pump design and manufacture of pumps/compressors for heat pumps used widely across Europe. Harland & Wolff – have recently won a
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