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Industry news
UK's energy market most competitive in EU and G7
Thursday, January 31, 2008
The UK's energy market remains the most competitive in the EU and G7 it was revealed today, with the publication of independent research.
Business Secretary John Hutton hailed the report as evidence that the UK market was
delivering for consumers, and called for more open and transparent markets to be replicated throughout the rest of Europe.
The report, from the Oxford Economic Research Associates (OXERA), monitors the competitiveness of the energy market by assessing a range of factors. These include the market shares in generation and supply, the separation of transmission from generation and supply and the availability of regulated third party access to gas and electricity transmission and distribution networks.
Only 11 EU members and none of the other G7 countries have currently deregulated their energy markets sufficiently to be assessed. A further eight EU members are expected to qualify to be assessed in 2007.
Business Secretary John Hutton said:
"Creating an open and competitive energy market has meant that UK consumers have consistently benefited from amongst the lowest energy prices in Europe. While it is true that wholesale energy prices are rising, greater choice and transparency are clearly the best protection against these costs being disproportionably passed onto consumers.
"That is why we want to see the UK's open and transparent markets replicated throughout the rest of Europe. Liberalised energy markets - such as the one we have in the UK - could save EU consumers tens of billions of euros a year.
"We welcome the robust actions the European Commission has already taken to liberalise European energy markets, and we will continue to encourage and support further work."
DEPARTMENT FOR BUSINESS, ENTERPRISE AND REGULATORY REFORM News Release (2008/22) issued by The Government News Network on 30 January 2008
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Worry as EDF readies Scottish Power bid
Wednesday, January 30, 2008
Britain's second-largest energy company could be created from a merger between EDF Energy and Scottish Power - a move that would spark competition fears in the UK and outrage from consumer groups which are already warning about soaring electricity and gas prices.
It has emerged that EDF, the giant French energy monopoly that is London's main electricity provider, could be poised to launch a takeover bid for Iberdrola, the Spanish group that bought Scottish Power 15 months ago.
That would create the UK's secondlargest household energy provider after British Gas and cut the number of major market suppliers to five.
A tie-up in Britain between EDF Energy and Scottish Power would create a company with more than 10m gas and electricity customer accounts - over a fifth of the residential market.
It would overtake Southern Electric group Scottish and Southern Energy, which has about eightm customers.
German groups E.On (which used to trade as Powergen) and RWE, the owner of npower, share the remaining 25% of the UK market. Consumer watchdog Energywatch is already warning the Government that competition between the existing six major suppliers is not operating properly.
'It is obvious that this market is not delivering good value to consumers,' said chief executive Allan Asher, who has called on the Government to launch an investigation into the household energy market.
In Madrid, shares of Iberdrola, Spain's largest utility, have soared by a fifth in a week on speculation that a €46bn (£34bn) joint bid could come from EDF and Spanish construction giant ACS.
From www.thisismoney.co.uk
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Sustainable heat drive key to Scotland taking green energy lead
Tuesday, January 29, 2008
Interesting an insightful comment by Jason Ormiston, Chief executive of Scottish Renewables
JANUARY 2008 will be remembered as perhaps the most historic month in the renewables industry in Scotland when a 2020 vision for green energy was embraced by all north of the Border.
Legislators were out of the blocks with three proposals – the European Commission's energy plan, the UK government's energy bill and the Scottish Government's draft National Planning Framework – all aimed at tackling climate change.
The EC plans said renewables should account for 15 per cent of the UK's energy generation by 2020. Scotland, however, can and should aim to achieve at least 20 per cent, and in doing so establish itself as a country committed to a low-carbon economy.
To achieve these targets, the UK and Scottish governments need to get green about the way we use and generate heat.
The European strategy, signed up to by Westminster, should be all the inspiration needed for the government to take this issue seriously at last. Heat is so important as it represents 50 per cent of Scotland's energy use and an energy strategy that does not take this into account is no strategy at all.
Some of the UK's leading experts will look at the issue at Scottish Renewables's conference in Edinburgh on 19-20 March. Scottish Renewables is under no illusion about how difficult this is, but has consistently argued that governments north and south of the Border must promote sustainable heat solutions.
There has been some work on fuel poverty and energy conservation and a small amount of financial support for micro- renewables, but the approach has been piecemeal and has not, until relatively recently, considered how to mainstream renewables into the heat market.
Heat used in Scotland, in our homes and in industry, accounts for over a third of all carbon emissions from the energy sector, with a little under a third for electricity use and a third for transport. Clearly, an energy and transport policy that focuses on electricity almost to the exclusion of heat and expects vehicle miles travelled to increase in the coming decades does not make a balanced energy strategy.
Given the UK's current woeful all-energy renewables contribution of 2 per cent, the 15 per cent target for 2020 look
s stretching, but it seems the UK has got off the hook for being a slow mover on heat issues.
Scottish Renewables made a stab at working out Scotland's contribution in 2006 and concluded something like 6 per cent of all our energy use comes from renewables, with renewable electricity making up the vast majority of that. The EC model for targets is to add 13 percentage points to the baseline and so, accounting for growth in renewables in 2007 and 2008, Scotland should aspire to at least 20 per cent by 2020.
The Scottish Government does not have to do anything as this is a reserved matter, but with tough carbon-cutting targets set in its Climate Change Bill, it will have little option but to push the agenda for massively expanding the contribution for all renewables. If it does that, January 2008 will go down as the month we triggered the revolution in Scotland's energy industry.
From The Scotsman
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Lead the way in cutting carbon
Tuesday, January 29, 2008
MBAs in carbon management will become increasingly important as companies are forced to tackle climate change.
JONATHAN HORSLEY has embarked on a radical career change. The 46-year-old engineer has left his post as director of a division of Zytek, the electric and hybrid vehicle specialist, to take a course that he expects will pitch him into the battle against climate change.
Horsley is among the first 12 students to sign up this month for the MBA in strategic carbon management at the University of East Anglia.
Along with learning the basics of business administration, from leadership to financial management, he will gain an understanding of carbon-related matters such as environmental economics and the impact of climate change on business strategy.
This will, Horsley hopes, give him the skills needed to work in the commercial world reducing carbon emissions and mitigating the impact of climate change.
He is confident that there will be plenty of job opportunities when he graduates in a year’s time and expects to be earning at least as much as he was at Zytek. At the higher end of the scale, managing directors and sales directors of low-carbon enterprises can earn a starting salary of up to £100,000.
"But money isn’t my motivation," said Horsley. "I want to do something positive in business. Climate protection is at an embryonic stage and I am keen to get in at the ground level."
The University of East Anglia’s 12-month MBA is the first of its kind and costs students £13,500. It will soon be joined by another pioneering master’s course, a 12-month MSc in carbon management to be launched at Edinburgh University in September. This will cost £7,500.
The MSc will have a more technical, less business-orientated emphasis than the MBA but will still look at the implications of climate change for business strategy as well as its impact on government policy and national economies. It will also look at the science and the various approaches to dealing with the problem. Both qualifications are intended to set their graduates on new career paths in which they will guide businesses and public-sector organisations through carbon management, climate-change regulations and even the nascent carbon-trading markets. Other universities are expected to follow.
The business community is already beginning to find climate change an increasingly pervasive issue. Last month, the government started to factor notional carbon-damage costs into its policy and investment decisions, while European ministers announced that the aviation industry would be subject to a carbon-pollution cap by 2012.
Rory Sullivan, head of investor responsibility at Insight Investment, the asset-management arm of the Halifax and Bank of Scotland group, said: "For most companies, it will certainly become a priority issue over the next 10 years."
He predicted that a combination of new regulations and public interest would sustain growth in carbon-related jobs and that there would be a demand for people who had the right skills.
The need for skilled people to manage carbon would create a new class of professional manager, according to Kevan Williams, programme director of the University of East Anglia’s MBA course and director of the Norwich Management Development Centre.
"Climate change is a big opportunity because as people become more convinced to change their own impact, they will look for new services and products to allow them to do so," he said.
Williams predicted that their extra know-how would enable the MBA graduates to go into senior management, some as directors of corporate social responsibility, others in more mainstream roles where their expertise could give their employer a competitive edge, not least in securing public-sector contracts that increasingly demand carbon-performance information as part of the tendering process.
Craig Mackenzie, a senior lecturer in sustainable enterprise at the Edinburgh Business School and one of the principal teachers on its MSc course, said the course’s graduates would be in demand. "If you are about to embark on a career in business or in the public sector, it is almost certain that over the next 10 to 20 years, your decision-making as a business leader or policymaker will be affected by the need to mitigate climate change," he said.
David Reay, the programme director, said: "Our graduates will be able to tell companies how to get ready for climate change and prepare themselves for future legislation."
It was difficult to recruit such people at present, said Richard Tipper, technical director of the Edinburgh Centre for Carbon Management, which does research and consultancy work on climate-change mitigation. "There is a skills shortage," he said.
Tipper has a PhD in agricultural sciences from Stirling University, while many of the firm’s analysts have come from environmental and business backgrounds. He said that people with specialist carbon qualifications would interest Edinburgh Centre for Carbon Management, but only if they possessed other skills as well. "I wouldn’t say it is essential to have one of these degrees to get into the field but it may help," he said.
Sullivan agreed that the new qualifications would enhance the employability of an individual who already possessed a qualification in, say, engineering or economics. "There will be a market for graduates who understand carbon management but they will also need to have specific skills that can be applied in business," he said.
Studying for a specialist MBA was not always a sensible option, according to Steven Currall, professor of management science and innovation at University College London. He said that while there was a demand for expertise in climate change, this was not guaranteed to grow in the future. "There is a risk associated with changing trends in technology and industry that more flexible, less specialist degrees can respond to," he said.
Williams said the importance of climate change would not decline and that, with growing numbers of people with standard MBAs, having extra knowledge of carbon management would give someone an edge in a rapidly growing field.
The Marks & Spencer high-street chain recently appointed its first climate-change officer as part of a £200m ecological initiative that chief executive Sir Stuart Rose pledged would aim to make the company carbon neutral by 2012.
Finding an individual suitably qualified to take on wide-ranging, root-and-branch work had been a challenge, according to Mike Barry, Marks & Spencer’s head of corporate social responsibility. "The whole area of carbon management, from measuring your own carbon footprint to developing practical ways to reduce it, requires a new set of business skills," he said.
Graduates with appropriate skills were needed. "Both [the MBA and MSc] courses are necessary when you look at what business will have to do in the next 10 years," said Barry.
From Times Online
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Major food and drink manufacturers pledge to reduce water use
Monday, January 28, 2008
Twenty-one of the UK’s leading food and drink manufacturers have today signed an historic agreement to improve their water efficiency and thereby reduce water use. Once rolled out across the sector as a whole, the initiative could save some 140 million litres of water per day – equivalent to 56 Olympic-size swimming pools – and a combined financial saving of around £60m per year on water bills.
Under the Federation House Commitment, jointly developed by the Food and Drink Federation (FDF) and resource efficiency experts Envirowise, the first 21 signatories have pledged to review their on-site water use and take action to reduce this wherever possible.
The signatories are: apetito; Birds Eye Iglo; Britvic; Cadbury Schweppes; Coca-Cola Enterprises; GlaxoSmithKline; Kellogg Marketing & Sales Co; Kraft Foods UK; Mars Snackfood; Müller Dairy (UK); Nestlé UK; PepsiCo UK; Premier Foods; Tate & Lyle; UIN Foods; Unilever UK; Uniq; United Biscuits; Warburtons; Weetabix; and Young’s Seafood. These companies generate a combined annual turnover of over £15 billion.
The Commitment will help FDF members to achieve their water reduction goals, as set out in the Federation’s recently launched Five-fold Environmental Ambition. It will also be central to achieving the industry-wide target in the Food Industry Sustainability Strategy to reduce water use, outside of that embedded in products themselves, by 20% by 2020 compared to 2007.
Companies working with Envirowise will review their current water use and develop site specific action plans to significantly cut water use and costs within six months of signing up to the commitment. They will report annually to Envirowise on water and cost savings made on site. Envirowise will offer signatories a package of support measures to help them.
Lord Rooker, Minister for Sustainable Food and Farming and Animal Health, said:
"I am very pleased to support this joint FDF and Envirowise initiative which has resulted in the first voluntary framework under which food and drink companies can work systematically towards improving efficiency and reducing water use wherever possible. It is particularly pleasing to see so many influential companies, responsible for well known household brands, signing up on day one. I would like to urge more companies in the sector to follow the leadership and commitment being shown by FDF and its members to the environment."
Callton Young OBE, Director of Sustainability & Competitiveness, FDF said:
"Last October FDF chose to be bold about the environment by targeting priorities where we can make the biggest difference through collective action. Today’s signing of the Federation House Commitment by many of our largest member companies is an important demonstration of this commitment and their desire to reduce the environmental impacts of our sector through the widespread adoption of water efficiency best practice. The leadership that they are bringing to bear on this important issue is to be applauded."
Dr Martin Gibson, Programme Director, Envirowise added:
"We are very pleased to have jointly developed The Federation House Commitment with FDF. The agreement has an important role to play in helping to improve water efficiency in the food and drink industry and to achieving significant savings of a precious resource. Envirowise worked on the strategic aims of the Food Industry Sustainability Strategy and we look forward to working with industry to help them achieve their water reduction goals."
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Scotland set for "Zero waste" plans
Monday, January 28, 2008
Plans to create a "zero waste Scotland" by boosting recycling and capping waste incineration have been announced by Scottish government chiefs.
In a statement to the Scottish Parliament on Thursday, Environment Secretary Richard Lochhead outlined ministers' ambitions to recycle or compost at least 50% of municipal waste by 2013, rising to at least 60% by 2020 and a minimum of 70% by 2025.
The government aims to reduce the amount of landfilled municipal waste to a maximum of 5% by 2025 and allow only a quarter of household waste - 4% of the country's waste - to be treated by small, efficient energy-from-waste plants.
Mr Lochhead told MSPs: "The government is opposed to large, inefficient energy-from-waste plants. Such plants could easily become white elephants and drain public funds."
More than £150m is set to be spent on zero waste projects over the next three years to support recycling and composting infrastructure, tackle commercial and industrial waste, and run education and awareness programmes.
Mr Lochhead said: "Prior to the Scottish Parliament, Scotland's record was dreadful. We were a throwaway society, burying our waste out of sight and out of mind and recycling barely 5% of household waste. As everyone acknowledges, we need to move away from landfill."
Green MSPs criticised the decision to allow 25% of household rubbish to be sent to energy-from-waste plants.
Scottish Green Party Co-convenor Robin Harper said: "It is grossly misleading for ministers to describe burning up to a quarter of Scotland's waste as part of a zero waste strategy."
Friends of the Earth Scotland welcomed the announcement, and the decision to focus on smaller, more efficient energy-from-waste plants, but said there was a lot of work to be done to meet the ambitious targets.
Head of campaigns Stuart Hay said: "Some countries already recycle twice as much waste as Scotland.
"This shows that we still need more investment in the right facilities if we are to shake off the tag of 'dirty man of Europe'. We also need to slash the amount of waste we produce."
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Energy watchdog says price increases 'unjustifed'
Monday, January 28, 2008
Energy companies such as British Gas which have increased household bills by over 15 per cent should be referred to the Competition Commission, according to consumer watchdog Energywatch.
In the past month, British Gas, EDF Energy and Npower have all increased utility bills, hitting more than two-thirds of UK households. The average annual bill is now over £1,000, double that of 2003.
Scottish Power and Eon are also expected to increase prices soon while Scottish and Southern Energy has promised to freeze prices until April.
Speaking on BBC News yesterday, Allan Asher, chief executive of Energywatch, said the energy market was uncompetitive and the price rises were unjustified. 'Sadly the market is not working well and that's leading to consumers paying much, much more than they need to,' he said.
This month regulator Ofgem was forced to assure Gordon Brown that energy suppliers were not colluding on price rises. Energywatch questions why companies are so slow to pass on savings from lower wholesale gas and electricity prices but so quick to increase bills when wholesale prices rise.
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Gazprom aims for 14% of UK gas market in 3 years
Monday, January 28, 2008
According to Thomson Financial News, the head of Marketing and Trading at Gazprom is targeting 14 per cent of the UK's commercial and industrial gas market within three years. Gazprom currently hold only 1.5 per cent of the UK gas market today.
Vitaly Vasiliev, the Russian energy giant's head of Marketing and Trading was quoted by the Wall Street Journal as saying, "Gazprom wants to be an energy company, not just a supplier of gas. We want to participate in the whole value chain."
Gazprom had previously expressed interest in buying UK utility Centrica PLC in 2006. They already supply around 25% of the wholesale gas across Europe.
Courtesy of Thomson Financial News
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UK homes to get super-fast fibre
Monday, January 28, 2008
The UK's first "fibre town" could go online in the autumn, delivering speeds of about 100Mbps (megabits per second) to consumers' homes.
Fibre firm H2O provides super-fast broadband via the sewers and either Bournemouth, Northampton or Dundee will be offered the service first.
It will compete with more established companies, such as Virgin Media, which is speeding up its cable network.
It follows government concerns that the UK is not embracing next-gen broadband.
Transforming services?
While other countries' plans for next generation broadband - offering speeds of up to 100Mbps - are well advanced, the UK has slipped down the speed league tables.
For consumers, super-fast net connections could create a range of new applications including on-demand high definition (HD) TV, DVD quality film downloads in minutes, online video messaging, CCTV home surveillance and HD gaming services.
Last month BT announced that its own fibre to the home trial at Ebbsfleet in Kent would see the first homes connected by August of this year.
But this will initially be limited to around 600 new houses. The development will eventually have some 10,000 homes connected via fibre with speeds of up to 100Mbps but the project will take until 2020 to complete.
"We are talking here about fibre speed; not that dreaded word broadband"
Elfed Thomas, H20
While BT has pledged to provide all new housing estates in the UK with fibre connections it has not yet made clear its plans for existing homes.
The current telecommunications system was never designed to carry data and many have called for an urgent fibre upgrade.
BT has argued that with costs of up to £15bn to roll out such a network it needs to be convinced of demand and have assurances from the government that it will be able to recoup its investment.
At the end of last year, Virgin Media announced that it would be upgrading its entire cable network - which covers half of UK homes - to provide speeds of up to 50Mbps (megabits per second) and this is expected to begin towards the end of this year and be completed in 2009.
London-based firm Geo, which also offers fibre via the sewers, serves mainly businesses but also leases its fibre to consumer providers such as Tiscali and Carphone Warehouse.
Broadband caution
Antony Walker, head of the UK's Broadband Stakeholder's Group, cautioned that the H20 scheme could not create a fibred Britain alone.
"There are clearly benefits to using the sewers and this fibre deployment is good news but it is only a small piece of the jigsaw," he said.
The burgeoning fibre market is going to be a tough one for providers, according to Ian Fogg, an analyst with JupiterResearch.
"An optimistic view is that they will need penetration rates of between 15 and 20% of households in a particular area and with so many providers offering services that makes the business case very challenging," he said.
Mr Thomas of H2O is confident that its mega-fast service will have instant appeal for consumers and is pleased to be the first to offer such high speeds.
"We are talking here about fibre speed; not that dreaded word broadband," he said.
The service will be delivered to individual homes via a four-inch box attached to the house.
It will also serve local businesses and council services.
Bournemouth, Northampton and Dundee have been selected because H20 has already installed its fibre service to local council buildings.
The fact that the sewer-based fibre takes advantage of existing ducting means there is no need for expensive and disruptive road digging, making the system faster and cheaper to deliver.
"While deploying traditional fibre over a two-kilometre area would be six to 12 months in the planning. We can do it in four hours," said Mr Thomas.
Mr Thomas said the sewers solution was a lot cheaper than the conventional route of digging up roads.
"An average town of 75,000 homes would cost someone deploying traditional fibre between £50m and £70m. We can do it for 20 to 30% of that," said Mr Thomas.
H20 said it is in "advanced talks" with media partners and internet service providers who will offer the service to consumers. The first of these partners is due to be announced next month.
Roll-out in the chosen town will begin in September and take 18 months to complete.
Mr Thomas hopes to add another 14 towns over the next five years.
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UK tops customer churn league
Wednesday, January 09, 2008
The UK is the customer churn capital of Europe, with the worst record in retaining consumers, according to new research.
The study, carried out by Pitney Bowes Group 1 Software, reveals that customer defection rates in the UK have risen by 15 per cent since 2005, mainly in the supermarket, general insurance sectors. Mobile telecoms has witnessed a customer churn rate of 38.6 per cent.
The key reasons consumers decide to switch loyalty include not being recognised as a valuable customer, unhelpful staff and ineffective call centres.
The research also shows that customer defection rates are higher in Britain than in any other European country.
Andrew Greenyer, vice president of international marketing at Pitney Bowes Group 1 Software, comments: "As churn rates continue to grow across all industries, it is clear that we are seeing a polarisation between companies successfully adopting the techniques and technology associated with customer retention, and those who are not.
"The more successful organisations are prioritising customer profiling to identify the habitual switchers and high value customers, implemented data-driven marketing techniques to deliver relevant and timely customer communications, and drawn customer information from across the enterprise and out of legacy systems."
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Climate change makes water the new oil
Wednesday, January 09, 2008
Water has long been considered a right in the UK. But with the onslaught of climate change and shifting demographics, its value is changing. Natural disasters are no longer things that happen elsewhere in the world as every nation's climate hangs in the balance. At the same time, consumption is increasing at an exponential rate.
In The Telegraph's interview with Philip Green, chief executive of United Utilities, one of Britain's largest water companies with a market value of £6.5bn, he says: "Water is to the global agenda [today] what oil has been for the last few decades."
So, as climate change bites, will water be rationed? "No, hopefully we'll use things like desalination to maintain supply." United Utilities has a joint venture to develop desalination technology while the Government is backing a new plant in the Thames Gateway.
Companies like United Utilities operate under huge pressures, which have been exacerbated by last summer's floods. So vital is their role in the battle to cope with changing weather patterns that MPs are to conduct an inquiry into how the water industry can meet these challenges.
Meanwhile, the utilities companies are mid-way through an extensive price review, which culminates in 2010 when the regulator sets prices for the next five years. For the first time, Ofwat has asked companies to give a 25-year view. Green says: "When I first joined United Utilities, I thought it odd that one would review asset planning every five years when the assets themselves last several decades."
Part of the Ofwat review will address climate change, a theme as important as you would expect to a man named Green. United Utilities is spending £40m on cutting emissions by 26pc by 2012, changing not only light bulbs but also power sources. Like other water companies, United Utilities has been using more electricity, and thus carbon, to meet EU directives on water quality. In the past, sewage was simply dumped. Now gas from effluence is being converted into electricity. "It's efficient and we get financial payback," he says.
Personally, he has also made sacrifices, surrendering his beloved BMW 7 series. "It's partly financial, partly environmental a decision. I just don't need a big car." Instead he car-shares with colleagues and his wife. At a professional level, he is helping the Prince of Wales with his May Day summit preparations and is promoting Business in the Community's environmental campaign. He is to meet Ben Verwaayen, BT chief executive, this month to discuss merging the BITC initiative with a drive by the CBI to persuade business to cut emissions and exploit green technology.
Unlike other heavy emitters, water utilities are at the sharp end of climate change. During the UK floods of last summer, the companies provided fresh water to thousands of inhabitants and then cleaned up the mess. Since then, the debate over flood defences and who is responsible for them has rumbled on.
A critical question is what to prepare for. United Utilities has calculated that building defences for storms that happen between once in 100 and once in 1,000 years would cost an extra £1bn.
Green says United Utilities can find the money if it's spread over ten years, but it is up to the Government how much should be invested.
They must also decide whether customers or taxpayers pick up the bill. Green says with so many factors to consider it's too early to predict prices in 2010. But United Utilities's report to Ofwat predicts that prices will rise no faster than income over the next 25 years, though there will be periods when they spike due to fluctuations in investment and demand.
Often described as the "other Philip Green", to distinguish him from the retail billionaire and Arcadia boss, Green describes himself as a "professional manager". He has spent 25 years in four different industries, from logistics at DHL to media at Reuters. Before joining United Utilities, he was chief executive of container shipping business P&O Nedlloyd, which he sold to Danish company Maersk, walking away with a £5m in payoff and shares.
"Working in different fields gives you perspectives that few managers have. The negative is that you will never have the depth of knowledge of industry lifers."
Nonetheless, his switch to the water industry surprised some. It shouldn't have. Green's other passion is Africa. He has climbed Kilimanjaro twice in the last five years, he and his wife have built a school in a local township in South Africa and he is taking his management team to Zambia to work for a week in a village installing water and sanitation on behalf of Water Aid.
Back at United Utilities, Green has also focused on improving operational performance and customer satisfaction. After years of missing leakage targets, United finally met them last year and is on track to do the same this year. He has also raised the watchdog's customer satisfaction score from 45pc to about 80pc and rid the company of anti-tendering practices which resulted in an £8.5m fine from Ofwat last April.
Shareholders, meanwhile, have seen their portfolio overhauled. Non-core assets such as outsourcing arm Vertex and telecoms business Thus, originally acquired amid the rush to build mini-conglomerates in the 1990s, have been ditched.
Just days before Christmas, Green completed his biggest deal yet, selling the Norweb distribution network for an eye-watering £1.78 billion, 45pc above regulated asset value, to investors led by Citigroup - and retained the management contract.
Meanwhile, United Utilities is expanding. Green plans to export its management and building services (already provided to rivals in the UK) in an "asset-lite" manner to "low-risk geographies" such as Australia and the Middle East.
Green is adamant that British companies like United Utilities should be at the forefront of providing technology and services to the rest of the world, and to that end has joined Gordon Brown's Commission on Skills and Employment.
So far, then, Green has accomplished most of the targets he set himself in 2006. So will he move on? "I have no plans, intentions or inclinations to move. There's still a lot of work to be done here."
But he admits that tackling a slow-moving barge like the water industry can be frustrating, not least changing cultures. One of the first steps he took on arriving at United Utilities was to stop serving bottled water to guests. Instead it's straight from the tap, even if that means swallowing rival Thames's product. "I am not averse to spending quite a lot of money on a bottle of wine. I resent greatly spending money on bottled water when we have such high quality tap water." Let's hope it stays that way.
Courtesy of The Telegraph.co.uk
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Time to take another look at water power
Wednesday, January 09, 2008
YESTERDAY (7th January, 2008) marked a milestone in the construction of Scotland's largest hydro- electric power scheme for half a century, when a giant boring machine completed a five-mile tunnel through the mountains above Loch Ness at Glendoe.
When completed, the Scottish & Southern Energy plant will collect rainwater from the mountains and channel it through vast turbines before allowing the water to drain into Loch Ness itself. As energy projects go, the cost is relatively modest – £140 million – yet it will provide clean, renewable electricity sufficient to light the homes of a city the size of Glasgow.
The question arises: why not more hydro power? It is a proven technology in which Scotland had led since the 1950s. Unlike many other forms of renewable energy, hydro power can be pumped into the UK national grid at the flip of a switch: when operational next year, the Glendoe plant will be able to start generating at full capacity in only 30 seconds. Above all, hydro power is cheap in an era when oil costs $100 a barrel. Scottish & Southern estimates that the operating cost of producing electricity from Glendoe will be a tenth of that of a conventional gas or coal-fired station.
However, there are drawbacks to installing further hydro power, at least of the traditional model. Public opinion will no longer allow the damning of glens to create the water pressure necessary to drive the turbines. An alternative technology – drawing water from fast-flowing Highland rivers – runs the risk of draining those rivers dry. An infamous case in point is the River Garry, a tributary of the Tay, which is denuded of water for a 13-mile stretch as a result of an earlier hydro scheme. Local people are attempting to use the new EU Water Framework Directive to get Scottish & Southern to remedy the damage – a demand the company should take to heart.
Yet the potential shown by the Glendoe project suggests we should give hydro power a second look – provided the damage to our rivers, glens and wildlife
can be contained. There may be limited potential for gigantic schemes, but smaller projects could be used as part of a sensible mixed- generating portfolio. For instance, there is great potential for new pump storage schemes coupled to wind farms. The drawback of wind power is that it is intermittent and unpredictable. But if the windmills are used to pump water into reservoirs whenever the wind is strong, the stored water can be released when required to generate power on demand.
Currently, the Scottish Environment Protection Agency (SEPA) is conducting a consultation to identify how Scotland's existing hydro-electric network can be made more environmentally friendly. Rather than turn our backs on hydro power, it would make sense for SEPA, the power industry and the various environmental bodies to work jointly to unlock Scotland's original renewable energy source – our water supply.
Courtesy of The Scotsman
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Ten simple ways we can all help save the planet
Wednesday, January 09, 2008
TODAY the Scottish Government and The Scotsman join forces to launch a campaign to persuade the nation to "go green" and sign up to a more environmentally friendly lifestyle.
There is a need to change the way we live in order to fulfil the requirements of the fight against climate change. Scientists and politicians across the world are in almost unanimous agreement that the time for argument is over.
Unless humanity takes steps to reduce greenhouse gas emissions, the world will be hit by famine, drought, floods, storms of increasing intensity and rising sea levels. How bad this will be and when it will strike may be uncertain, but a worst-case scenario would result in vast tracts of the planet becoming uninhabitable, prompting mass migrations towards the poles and wars over territory.
Many climate scientists believe we have about ten years to start reducing greenhouse gas emissions or face dangerous global warming as the planet's average temperature rises 2C above the pre-industrial figure.
The new campaign centres around ten pledges designed to help people get involved in reducing their carbon emissions: advertisements for the campaign appear throughout today's newspaper.
The Scotsman is working with the Scottish Government to push the message in forthcoming weeks. Stories will appear under the campaign logo "Let's Go Green Together", because there is a vital third party in this initiative – the people of Scotland.
The campaign asks as many people as possible to adopt some or all of the ten pledges printed on this page.
Together, enough of us can make a difference – one person recycling a glass bottle would save the energy required to power a television for an hour and a half.
BY ITSELF, that would be insignificant in the fight against climate change, but it is estimated that if every person in the country joined in the campaign, we could cut our energy use by as much as 40 per cent.
The Scotsman and the Scottish Government have set up websites to record people's pledges to join the campaign. These names will be printed in The Scotsman over the coming months.
Alex Salmond, the First Minister, said: "Climate change is a challenge for us all. Here in Scotland, we have an abundance of natural resources and massive renewable energy potential.
"We have a vast future as a green energy powerhouse for Europe, and we must now think big about how to bring it into being.
"At the same time, however, we each have an individual role to play. The decisions we make in our daily lives have a significance that should not be underestimated, and I'd encourage everyone to make one or more pledges in 2008."
Today, The Scotsman's masthead is printed in green – only the second time in its history it has been changed in support of a campaign – the other was publication of The Scotswoman in the 1990s. Mike Gilson, the Editor, said: "I think many people now believe we need to take steps to address the threat posed by global warming but are uncertain about what to do, how they can really make a difference.
"The ten pledges provide a manifesto for change that we can all at least aspire to. Some are harder than others, but if everyone in Scotland was to fulfil at least one pledge, that would make a real difference.
"The important thing is for everyone to try, to do their best, and no-one should be put off if they feel able to do only a few of the pledges.
"There may be some people who are doing all of them already, but the Scottish Government should be praised for promoting them in an attempt to make this a real mass movement."
He went on: "The change of our masthead's colour is a sign of how seriously this newspaper takes this issue. It is time for the people of Scotland to pull together and say with one voice 'Let's go green'."
Global warming might seem a distant threat to some in Scotland, but today we highlight the plight of the Cook Islands in the South Pacific, where there have been dramatic increases in storms and hurricanes, associated with rising sea temperatures.
PEOPLE there fear islands will become uninhabitable, and last month's United Nations climate change conference in Bali heard the country's representative speak movingly to the assembled world delegates, saying the islanders were "asking for our survival, nothing more, nothing less".
The Cook Islands may be among the first to experience what climate change will bring, and should serve as a warning to the world.
Robin Harper, the Scottish Green MSP, said the world could not wait for governments to solve the problem, but "people power" could make a real difference almost immediately.
"If we wait for governments, it will be too slow," he said "But there are things we can do tomorrow. We could reduce our energy consumption by 40 per cent tomorrow by simply going down the route the government is suggesting. All we need individually is the will to do it."
Duncan McLaren, chief executive of Friends of the Earth Scotland, said: "It is a positive initiative and the government has got to put the sort of effort behind this that it has previously put behind health information campaigns."
Dan Barlow, WWF Scotland's acting director, said: "In Scotland, we use resources and generate pollution as if we had three planets. Given our large ecological footprint and the growing impacts of climate change, there can be no doubt about the scale of the challenge we face and the urgent need for action."
1. Recycle household waste using facilities provided locally.
THE average person in Scotland throws away their own body weight in waste every seven weeks.
The present "throwaway" society means energy and resources must be expended to replace what we get rid of or fail to use.
More than £800 million of food is simply wasted in Scotland each year.
Stopping this would result in a reduction in carbon dioxide emissions equivalent to taking one in four cars off the road.
But even small actions can have a surprisingly large effect – recycling a single glass bottle saves enough energy to power a television for an hour and a half.
It takes only 25 recycled two-litre plastic bottles to make a fleece jacket.
Three-quarters of Scottish homes have access to kerbside recycling, while facilities are now available at most supermarkets, council refuse centres and other locations, providing ample opportunities to do the right thing. wasteawarescotland.org.uk www.sort-it.org.uk
2. Turn the tap off when brushing your teeth.
THE concentration of the population in the Central Belt means most rain does not fall in the areas where water is in most demand.
It is not always possible to move water to the places where it is needed, and doing so takes energy and can damage the environment.
A tap that drips once a second will waste 33 litres of water a day, and over the course of a year would have provided enough water for 446 showers. One of the easiest ways to save water is to get out of the habit of leaving the tap running while brushing your teeth. Putting a plug in, rather than leaving taps running, is another simple step.
Other tips include fitting a water-saving device to the toilet, showers instead of baths and running washing machines and dishwashers with a full load only. Using a watering can for plants and a bucket to wash the car is more efficient than a hose. www.scottishwater.co.uk
3. Switch to using energy-saving light bulbs
LOW-ENERGY light bulbs last up to 15 times longer than standard bulbs and save up to £9 in electricity a year.
Increasing energy efficiency is seen as one of the simplest and most effective ways of cutting our impact on the planet.
If every house in Scotland installed one extra energy-efficient light, the electricity saved could power 23,000 homes for a year.
It is thought that about 30 per cent of people have no energy efficient bulbs in their home.
Traditional bulbs translate just five per cent of incoming energy into light, with much of the rest turned into heat.
However, those resistant to low-energy alternatives will soon have no alternative. Europe, the US and China are all expected to ban incandescents in the next few years.
ban-the-bulb.blogspot.com energysavingtrust.org.uk
4. Leave the car at home at least once a week and cycle, walk, share a car or use public transport more often.
CARS and other vehicles are responsible for nearly a fifth of Scotland's greenhouse gas emissions.
They are expensive – car ownership costs on average £2,200 a year – and emit other gases that affect air quality and health. Nearly half of car journeys are under three miles and, in cities, cycling can be as quick. Taking the bus or train will also reduce emissions compared to driving alone in a car.
Sharing a car, using park-and-ride services and choosing a vehicle with good fuel efficiency are ways of reducing the impact of car journeys.
Regular servicing, not leaving the engine idling too long and driving at a sensible speed, avoiding hard accelerating and braking, also help.
www.sustrans.org.uk
www.travelinescotland.com
www.transportdirect.info
5. Use rechargeable batteries instead of disposable ones.
BATTERIES contain heavy metals which can leak out, causing pollution of the soil and water if they are simply thrown away.
The number of batteries we consume is staggering. Scotland alone uses around 41 million batteries a year, while the figure for the UK is more than 600 million.
Traditional batteries are designed for relatively short-term use and have been thrown away in vast quantities in the past. But even after they are run down, they contain valuable chemicals and metal which could be reused.
A policy of only using rechargeable batteries would dramatically cut such waste and be substantially cheaper.
Scotland recently opened a battery recycling plant in Golspie designed to take lithium-ion batteries, which are rechargeable and used mainly in modern portable devices such as mobile phones. Last year, some 13 tonnes of batteries was recycled.
www.sort-it.org.uk
6. Reuse carrier bags when you shop
THE waste of plastic bags has become a cause célèbre within the environmental movement.
The average time a plastic carrier bag is used has been estimated at just 12 minutes, but a typical bag could last several hundred years.
Plastic bags are a major component of household waste and the average home in Scotland produces just over a tonne a year, a figure that is increasing by about two per cent annually.
One of the simplest ways to cut the amount of waste you produce is to reuse old carriers, get a "bag for life" or a traditional shopping bag, or use a rucksack, rather than picking up several new carrier bags for every trip, only to throw them away at home.
adoptabeach .org.uk
abolishplasticbags .org.uk
carbontrust.co.uk
7. Buy more seasonal and unpackaged food
BUYING food out of season means more carbon emissions will have been created in its production or transportation from a favourable climate.
Locally grown fresh vegetables and fruit should have lost fewer of their nutrients than those stored in transit for a longer time.
Excess packaging adds to waste and makes up a significant proportion of rubbish sent to landfill. Avoiding convenience foods that have lots of packaging and buying loose fruit and vegetables can reduce this.
www.fifediet. wordpress.com/flying
wwwscotlands footprint.org
8. Hang your washing up to dry rather than using a tumbler dryer
NOT long ago in Scotland, it was rare to find a tumble drier in someone's home.
Today they are among the main household appliances, each year, consuming £1.3 billion-worth of electricity and responsible for more than five million tonnes of carbon dioxide in the UK.
Use a washing line or drying room or, if you must buy a tumble drier, choose one
with the Energy Saving Recommended logo, which means it uses less energy, produces fewer emissions and is cheaper to run.
www.energysavingtrust.org.uk/flying
9. Organise or volunteer in an environmental project in your local community.
THIS may sound daunting, but volunteering to do something practical to help the environment can be immensely rewarding.
Carrying out physical work outside is a good way to get fitter. It is also an opportunity to learn more about nature and
can give a sense of satisfaction that you have done something meaningful, helping to repair damage to the land caused by today's society.
Volunteering is also more relaxed than paid workplaces and offers an opportunity
to meet like-minded people with an interest in a similar area and learn new skills.
It is thought about 23,340 people currently carry out environmental volunteering in Scotland, completing about 91,000 hours of work a month.
wwwwww2.btcv.org.uk/flying
www.scotlink.org/flying
www.csv.org.uk/flying
www.chooseclim ate.org/flying
10. Pay back the environmental impact of any flights you take and choose not to fly when there's a suitable alternative.
FLYING from Edinburgh to London creates nearly five times more emissions per passenger than taking the train.
The train journey takes four to five hours while, on paper, the plane will take about an hour. But depending where you live, trains become much more competitive on time, as they take passengers from city centre to city centre and there is no need to arrive more than an hour before take-off.
Taking one less long-haul flight a year could reduce your "ecological footprint" by up to 25 per cent. Off-setting carbon emissions has proved controversial, but the UK government and the United Nations have schemes to ensure firms offering this service honour their pledges and environmentalists generally say this is advisable if flying is essential.
www.chooseclim ate.org/flying
HOW TO TAKE PART
ANYONE wanting to take part in the campaign can do so simply by trying to meet as many of the pledges as they can.
But The Scotsman and the Scottish Government are both asking people to sign up online.
This gives an idea how many people are taking part and which of the ten pledges prove popular and which attract less interest.
Those taking part can also explain why they want to join the fight against climate change .
This should help the government change policies to make it easier to go green and the newspaper to highlight issues of concern.
Simply log on to the sites below and follow instructions
• www.scotsman.com/gogreen
• www.infoscotland.com/ourfuture
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New nuclear will add little to UK bills - writes The Guardian
Wednesday, January 09, 2008
Britain expects the cost of handling the waste and decommissioning of a new generation of nuclear reactors to add about one percent to the cost of power produced, a source familiar with government thinking said.
And the amount trickling down to consumers' bills will be smaller still.
Ministers are expected to give the go-ahead to a new generation of nuclear power stations on Thursday after Prime Minister Gordon Brown pledged last week to "take the difficult decisions on energy security".
His spokesman said on Monday that nuclear operators would have to set aside funds to cover the full costs of decommissioning plants at the end of their lives as well as the cost of handling radioactive waste.
Like any other cost, that will trickle down to UK electricity bills, but it will be "very small indeed", the source told Reuters. "One pound per megawatt hour will probably be a very generous estimate of the knock-on costs," said the source. "And an estimate of two pounds would be outrageously over the top."
The baseload electricity price was 61 pounds ($120) per megawatt hour on Tuesday, meaning that the cost of dealing with waste and decommissioning could add between 1.6 and 3.2 percent to the cost of electricity from nuclear at the very highest estimates.
Nuclear energy currently accounts for just one-sixth of the country's electricity, so any impact on the public's electricity bills would be smaller still, and tiny compared to the impact of rising gas costs.
Ministers have repeatedly stressed the importance of reducing Britain's reliance on imported gas, which fluctuates with oil prices and regularly impacts bills.
Last week, German utility RWE said it was putting electricity prices up by an average of 12.7 percent in the UK, after wholesale gas prices rose by around 60 percent in the last year.
Nuclear is also less susceptible to swings in commodity prices than gas, which is used to generate about 40 percent of UK power.
Gas accounts for about three quarters of the cost of electricity generated from it, while uranium represents a mere 5 percent of the total cost of generating nuclear power, so uranium costs can double with little impact.
The first new nuclear plant is expected to break even with electricity at an average price of 37.5 pounds per megawatt hour, falling to 31.2 pounds for the second, according to government figures from the 2006 energy review.
The public has little to fear from variations in the cost of nuclear waste and decommissioning, with the worst case scenario adding only 36 pence per megawatt hour to the breakeven price, said the source -- still well below current baseload price of 61 pounds.
The government is keen to find new sources of CO2-free baseload power to help it meet ambitious climate change goals.
Other carbon-free technologies struggle to compete economically with nuclear, with the cost of waste and decommissioning about one fourteenth of the cost of capturing and storing the CO2 pollution emitted from coal-fired power stations.
The other big cost will be building the nuclear power stations at around 1.6 to 1.7 billion pounds per plant, but British Energy says it has no shortage of firms lining up to form partnerships.
Courtesy of The Guardian
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Darling Summons Gas Regulator to Explain U.K. Price Increases
Wednesday, January 09, 2008
Chancellor of the Exchequer Alistair Darling, seeking to contain inflation and keep a lid on rising energy costs, called for a meeting with Britain's utility regulator after RWE AG raised power and gas prices.
Darling summoned Alistair Buchanan to explain why energy suppliers are increasing prices, according to a letter released by the Treasury today. Darling wants to know if energy suppliers are unfairly using wholesale market fluctuations as an excuse to raise prices.
"I would find it useful to discuss these matters at a meeting with the chief executive," Darling wrote in the letter, which was sent to the regulator yesterday.
The Treasury is asking the chief executive officer of the Office of Gas & Electricity Markets to provide information on the availability of natural gas supplies for the rest of this year. The Treasury doesn't have the power to intervene in the price rises, an authority granted to the regulator.
RWE's British unit NPower said on Jan. 4 that it would raise bills for natural-gas and electricity customers, reversing price cuts made last year.
Npower, Britain's fourth-biggest energy retailer, raised standard household prices for gas by an average 17 percent and power rates by 13 percent from Jan. 5. The company said it decided to raise prices after crude oil traded at more than $100 a barrel.
Inflation Concern
The government has stressed the need to contain inflation as a global surge in credit costs threatens to derail economic growth. Darling is concerned that higher energy costs will constrain household spending and prevent the central bank from cutting lending rates.
Prime Minister Gordon Brown today said he will keep a lid on pay raises for government workers as part of the same effort to control inflation.
"I'm going to be vigilant about the events around the world," Brown told Sky News. "It's not an easy world at the moment. I want to achieve both for business low interest rates and for homeowners low mortgages."
Britons' inflation expectations rose to the highest in at least eight years in a Bank of England survey last month. That may make it harder for policy makers to lower interest rates again after last month's reduction, the first since 2005.
The central bank is required to keep inflation to 2 percent a year. Prices rose 2.1 percent in November.
Courtesy of Bloomberg
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Power groups bite back at Darling
Wednesday, January 09, 2008
Chancellor Alistair Darling's bid to portray himself as a consumers' champion over soaring energy bills has back-fired spectacularly, with power companies revealing that higher Treasury taxes account for almost 50pc of last weeks' rise in household energy bills.
Following swingeing price hikes announced by npower, expected to be followed soon by British Gas, Mr Darling summoned the head of energy watchdog Ofgem, Alistair Buchanan, to a meeting at the Treasury to explain what can be done about escalating bills.
But energy companies look ready for a showdown with the Chancellor if he attempts to demonise them for raising prices. One company said yesterday: "Mr Darling can grand-stand all he wants, but we will not let him forget that a sizeable chunk of price rises is due to higher "green" taxes and other costs introduced by the Treasury."
It is thought that Mr Buchanan has already been in touch with some power companies ahead of the as yet unscheduled meeting with Mr Darling. They have asked Mr Buchanan to point out the Treasury-imposed costs to the Chancellor. It is estimated that rises in the three main green taxes this year, including the Carbon Emissions Reduction Target (CERT), will add £28.50 to annual household bills. npower's price rise will raise its average annual electricity bill by £64.
A source at another energy company said: "No one is against green taxes; most of us are in favour. But it's a bit rich for a Chancellor to give the impression that we're all profiteering when the Treasury is putting up our prices. And it's not just green taxes, it's other business taxes."
The levy that power companies must charge each customer under the Emissions Trading Scheme is doubling to £30 a year. Under CERT, gas and electricity users are charged about £7.50 for each service, bringing in around £350m to the Treasury.
The Treasury refused to back down last night, with a source criticising power firms for their above-inflation rises for consumers and saying that it was "unrealistic" for companies to blame their increases on taxes that raised only £700m.
Energy experts had some sympathy with the power companies. David Hunter, electricity analyst at consultancy McKinnon & Clarke, said: "Rises in green taxes are part of the story, but not the whole story. The real reason for rising household bills is the rise in wholesale gas prices."
He added: "What we are seeing is a reaction to uncertainty in the market directly attributable to the government's inability to provide a clear energy plan. This is not what Darling will want to hear but there is no doubt that this is the case."
Of the big six UK energy companies, only npower would comment on the record, saying: "While rising wholesale gas and electricity costs have been a key driver of our prices increases, there is no doubt that the tax and environmental costs add a significant burden."
Ofgem declined to comment.
ENDS
Courtesy of Russell Hotten at Telegraph.co.uk
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