Genersys expose flaws in Phase 2 Low Carbon Buildings Program
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Homepage « News « Genersys expose flaws in Phase 2 Low Carbon Buildings Program

Genersys expose flaws in Phase 2 Low Carbon Buildings Program
Posted on Thursday 25th January 2007, 06:29.

Robert Kyriakides, Chief Executive of Genersys has written to Alistair Darling, Secretary of State for the Department of Trade and Industry, explaining the flaws in Government funding under Phase 2 of the Low Carbon Buildings Program. He highlights concerns that this will be damaging for many smaller eco-entrepreneurs and for the environment generally and that the Government will, if these funding proposals proceed get very poor value for money.

Read the correspondence here and also look at links to relevant articles.

So far, no reply has been received from Mr Darling.

News article added: 2007-01-25 11:29:04
 
 
 
Date added: 2007-01-23 14:56:58 Filesize: 14
Alistair Darling MP, Secretary of State for Trade and Industry. Click here for more information from the DTI website.
Date added: 2007-01-23 14:56:58 Filesize: 11
Robert Kyriakides, CEO Genersys Plc.
Date added: 2007-01-23 14:56:58 Filesize: 48
The Energy Age, by Robert Kyriakides. Click for a look inside the book. A guide to the use and abuse of energy in the world today.
 
Related links:
DTI Website and profile for Alistair Darling:
http://www.dti.gov.uk/about/dti-ministerial-team/page28168.html

edie news centre -coverage of this story.
http://www.edie.net/news/news_story.asp?id=12498&channel=0

Alistair Darling
Department of Trade & Industry
Response Centre
1 Victoria Street
London SW1H 0ET

11 January 2007

Dear Mr Darling

I am writing to you to ask you to review the way in which Phase 2 of the Low Carbon Building Programme has been set up and in particular the provision for only seven frame work suppliers under this scheme. The scheme is deeply flawed and will represent poor value for taxpayers’ money and will be anti-competitive. The scheme has been devised by someone with no experience or knowledge of the UK’s renewable industry, which will be highly damaged by the arrangements.

Genersys plc is probably the UK’s largest flat plate thermal solar company. Over the past five years we have trained over a hundred independent installation businesses in the installation of our product. We have encouraged them to market the product extensively both to private households and to not for profit organisations, using our engineering design resources and our web facilities. Our business has created hundreds of jobs directly and indirectly in this country and has thousands of satisfied customers whose use of the systems is saving thousands of tonnes of carbon each year in the UK.

Virtually all Genersys installation companies have strong links with their local communities and many have provided thermal solar systems to not for profit organisations establishing goodwill and a strong track record for doing excellent work in their communities.

These installation companies are entrepreneurial and like all smaller businesses in the renewable industry are formed by individuals who take significant risks. They do this against the background that they expect the government to encourage them and provide a level playing field to all those in the industry. They prepare their business plans understanding that (inter alia) they will be able to provide renewable energy systems under the Government’s low carbon building programme provided that they have the requisite qualifications.

I have learned that Phase 2, which provides for very significant government funding, has been structured so that only seven framework companies will be allowed to participate. Of those seven only Filsol, British Gas and LPC will be allowed to apply for grants for not for profit organisations that wish to install thermal solar systems. There was no general consultation about this proposal; indeed there was no publicity given to these proposals by the Solar Trade Association so that Genersys did not have an opportunity to consider this prior to these proposals being implemented.

I understand that the tender was only publicised in the Official Journal of European Communities; you will appreciate that very few businesses in our field have the time to scan this august journal or constantly review the dti’s website for announcements.

There is no advantage in having only three companies permitted to undertake this work in the solar thermal field, especially when you consider the nature of the chosen framework suppliers. The qualifications of the three chosen framework suppliers is not clear; only Filsol (whose managing director is Chairman of the Solar Trade Association) manufacture solar thermal products; I know that British Gas have limited thermal solar experience (how many large thermal solar projects have they actually undertaken) and I am unaware of any work that LCP have done in this field.

What is patently wrong is the fact that the framework suppliers have been limited to just three companies. This is anti competitive and will create many undesirable consequences including:-

1. Pricing for the work will be uncompetitive

2. Those many smaller businesses with excellent qualifications as consultants and installers with local links and local markets that trust them find themselves, as a stroke, cut off from a significant market which they have hitherto served

3. Manufacturers, including those with better products and more extensive experience will de facto be excluded from this market.

4. Any partnering arrangements that the framework suppliers bring in will inevitably introduce another layer of cost and margin, making bad value even worse.

5. Business development in this field by non framework companies and all the investment in it will have been made worthless at a stroke.

6. Existing satisfied customers have to turn to new suppliers; for example one of our installers fitted a system to a local organisation in the South West; the organisation was very satisfied with the work and was able to compare it with previously fitted solar thermal systems with which it was not satisfied; if the programme remains as presently constructed the satisfied customer has to look for a different installer (choice of three) that will use a different product where the choice may only be of one.

7. The renewable industry will be poorer, less confident and much damaged.

The renewable market as a whole (including the thermal solar industry) needs as many entrepreneurs to develop the market as possible. The market needs these smaller eco entrepreneurs whose customers like and trust them and who do an excellent job. I have no doubt that the effect of this decision will be that some of these eco entrepreneurs will lose their businesses.

Making decisions is a difficult process and sometimes you make the wrong decision. That happens. When it does it is better to admit the mistake and correct it and I trust that you will do that in this case.

Yours sincerely


Robert Kyriakides
Chief Executive
Genersys plc


 

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