The ETI is a partnership between a number of major industrial groups, including BP, E.ON, EDF, Rolls-Royce, Caterpillar and Shell and the UK government. It's very much focused on developing a strategic analysis and modelling capability for the UK energy system to identify what are the real challenges and the real directions we need to take for the future if we're going to meet 2020 and 2050 targets. Then having worked out those directions and challenges, we invest in major engineering and technology demonstration projects to take risk out of new energy systems for the future and make those more attractive to commercial investors.

Well the focus for our projects really so far has been to look at this issue around, we've got to deliver low carbon energy but it's got to be secure and it's got to be affordable. So over the last 18 months we've been running £60m worth of projects around a number of major areas, including offshore wind, marine technologies, electrification of transport, carbon capture and storage and small scale micro generation and distributed energy. What we're really finding out from some of those first projects actually is not necessarily here is a technology which is finished and it's on the shelf ready for the market to buy, but we've been able to put down some very accurate parameters around what is going to make a good technology in this space in offshore wind for instance for application in UK deep water where we've got very good wind speeds but we've really got the challenge of what does a turbine need to look like to significantly halve the cost of energy that comes off that machine. So now we know exactly the space we need to be in and I should say we also know the space we don't want to be in for some of those things in terms of what would really not take us in the right direction. So having got that engineering definition at the front end, we're now about to launch some major engineering demonstration projects in those same spaces based on that specification that we've now got.

Yes, that's a very good point. The challenge we've got for the UK is moving forward. We've got the potential to continue to use fossil fuels in quite a big way for the future. We've got some good low carbon alternatives such as offshore wind where we've got very good resources around the UK. But the challenge we have is how do we deliver those things whilst maintaining energy security and delivering affordable energy to the customer.

Well when we run a big project such as some of the wind turbines, some of the marine projects for carbon capture and storage, we generate a lot of IP in the process (intellectual property). That comes in a whole range of styles. Some of it is patents and some of it is designs for equipment. But an awful lot of it is just in know-how and skills and training in the suppliers who are developing this capability with us.

As I said we do this kind of strategic analysis work which is very much focused on the whole UK energy system across power, heat and transport. So it's not just about where the next power station is going to be, but it's about where are they going to be, but what do they need to be delivering from the point of view of energy as well and how is that going to provide power, for instance, for electric cars as we go into electrification of transport. So you see straight away power, heat and transport you've got to consider as a set and they integrate together.

Well from our point of view we've currently put £60m into projects over the last 18 months. We're in the process right now of launching another £100m worth of projects and each of those, to give you a feel, over the last 18 months, the average project cost has been of the order of £3m to £4m. We expected they would go about £10m to £15m per project over a period of time as we ramped up and got onto the big projects. The generation that we're launching right now are £25m plus projects.

Well this is absolutely key for the future because your point about deploying large amounts of capital, a lot of the projects we do are trying to reduce the capital cost on a future piece of technology. So we're trying to make it more affordable to deploy it, but nevertheless, the bill to put out 4,500 new wind turbines into the North Sea and in the Irish Sea is not a few million. We are now into billions and billions of pounds to actually achieve this.

Yes, absolutely. The reality is we work as I say as a partnership between the private sector and government, but the kind of technologies that we're demonstrating, if we say we're looking right now as we are at a £25m plus next generation carbon capture separation project, we're going to be putting that kind of money into just how do you separate the CO2 effectively at lower cost and more efficiency, how do you separate the CO2 out of a gas stream?

I think the task is doable. It's exceedingly difficult there is no two ways about it. If you look at any task of this scale on the timescale we're talking about, which isn't something we can fix, or have to fix in the next 12 months, this is something that we have to work at over the next 40 years if we're going to reach the 2050 target. The real thing you've got to do to really make that happen is work out what's the right direction of travel towards 2050 from a technology point of view and a societal point of view and having worked that out, more or less you've got to stick to it. You've got to develop strategies whether, from our point of view, it's the kind of modelling work we do to develop the technology strategy that can take us out towards 2050 for the UK, or whether it's from a fiscal incentive point of view which is very much the space that some of the government groups in the Green Bank type space getting into in terms of the fiscal direction we should be taking. But that's the key thing, is you've got to set the direction of travel and you've got to be pretty consistent about staying broadly within that direction of travel and that's exactly what we're trying to do in terms of setting up the technology direction that we need to take for the future. So that bit, I think we can do.