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Industry news
Time to encourage biomass growth
Tuesday, July 29, 2008
Biomass energy is being touted as a key player in the push to green Europe's electricity supplies, says David Williams. In this week's Green Room, he argues that although there are promising signs, more needs to be done to encourage large-scale developments.
For some time, biomass has been seen as the emerging sibling of the renewable energy industry.
Despite much of the development behind the industry's technology worldwide, the UK's position at the front of the biomass revolution has been slipping.
Developers have naturally concentrated on cheaper forms of alternative energy, chiefly onshore wind, whilst other countries have stolen a march, with the Chinese particularly active by building hundreds of stations based on UK power plant models.
In recent months, however, we have seen something of a change in the UK, with a backlash against many more established alternative energy sources.
In the transport sector, biofuels have been attacked for their effect on food prices and actual carbon reductions, while wind has been criticised for its inability to produce a consistent stream of electricity and for its cost.
Many industry experts are now suggesting that biomass has to play the primary role in helping the EU to meet its challenging target of generating 20% of its energy from renewable sources by 2020.
Burning ambitions
Biomass works by converting (normally through burning) biodegradable matter such as wood, straw and agricultural wastes into heat or electricity.
Because it uses organic materials, any carbon dioxide released during the generation of energy is offset by that absorbed during the plant's life, so the process as a whole is broadly balanced, or "carbon neutral".
Crucially, it is an effective method of producing energy.
A single power station can produce around three times more energy as a windfarm for the same amount of generation capacity. It is also reliable and can be scaled up or down to meet consumer demand.
Of course, every technology has its drawbacks and there has been criticism of biomass because of its sourcing needs.
The requirements to power a single station can be extensive, particularly if it is using wood as its primary fuel source.
Some plants within the UK propose to import timber from as far away as Canada and Indonesia; this can potentially have a huge impact on the carbon footprint of the feedstock and the energy that it produces.
That's not to say that all biomass projects suffer from these issues. Some developers are now looking to generate energy by burning straw, which the UK has an abundant supply of and which, as a by-product of agricultural crops, does not have an impact on the food verses fuel debate currently engulfing the biofuel industry.
Supermarket giant Tesco has recently been given a green light to build Britain's first ever straw-powered Combined Heat and Power (CHP) plant to meet the electricity and heating needs of one of its distribution centres.
Utilising straw for biomass represents one of the most efficient methods for its disposal and pre-empts the need for it to be ploughed back into the land.
As a final, but vital, benefit, the UK can meet all of its requirements from domestic sources, cutting out the need to import supplies and allaying growing concerns over energy security.
Whereas heat for domestic-scale commercial installations could come from solar technologies or even heat pumps, it is widely acknowledged that the primary market can only be supplied by biomass.
After all, most heat comes from combustion of a fuel, and biomass is the only renewable and combustible fuel.
Red tape fears
So what next for the industry? More than £3.5bn ($7bn) was invested last year and this figure looks set to grow substantially, as green investment funds try to hedge against the credit crunch by diversifying their portfolio of renewables schemes.
UK Renewable Energy Strategy
Already a stream of projects are either coming online or expecting to do so shortly, including the world's largest plant near Port Talbot, South Wales.
Signs from government are also encouraging. Changes to its proposed Renewables Obligation Certificate (which offers incentives to suppliers to generate energy from renewable sources) will increase the value of energy generated by biomass in comparison with other sustainable technologies and make it more rewarding for investors to back.
In June, the Department for Business, Enterprise and Regulatory Reform (BERR) published its Renewable Energy Strategy that also made clear the important role that the industry could play, noting that there is a need to "develop a sustainable biomass market".
While this in itself is encouraging, there remains some concern over the detail.
The proposals mooted in the strategy have been primarily designed to make individual action more palatable, specifically a feed-in tariff to encourage microgeneration technologies in homes and a financial incentive mechanism to facilitate a general increase in use of renewable heat.
What they have not done, however, is to provide significant encouragement for commercial developers. There is a definite feeling by many in the industry that the current system is over-complicated and that applications are too frequently caught up in red tape.
By laying down a clear pathway that developers can follow, the government will be able to stimulate growth and at the same time provide the financial community with the confidence necessary for it to make the long-term substantial investments.
The result will be a step-change in the UK renewable sector as a whole, and the first step towards meeting the EU's 2020 targets.
This opinion piece by David Williams was featured on the BBC News website.
David Williams is chief executive of renewable energy business Eco 2. He is also a member of the government's Renewable Energy Advisory Board and chairman of the biomass sub-group
The Green Room is a series of opinion articles on environmental topics running weekly on the BBC News website
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Jenny Haworth: UK adding to energy problems with lack of gas storage
Monday, July 28, 2008
With more warnings of higher gas prices, industry sources are asking what needs to be done to avert a looming energy crisis.
Some are now calling on the government to do more to increase gas storage facilities in the UK.
A gas company source told The Scotsman that the UK currently has the capacity to store imported gas for only 19 days, compared with 99 days in France.
That means the UK is forced to sell surplus gas – usually to the rest of Europe. Then, when the supplies run out, UK gas companies have to buy it back for higher prices, pushing up costs, reducing stability in the market and putting the UK at a disadvantage in terms of energy security.
"It's absolutely imperative that we have more storage," the source said. "We could use storage in the North Sea but the planning needs to be speeded up dramatically in order to do that.
"We are now at a crisis point. The lights will start to go off in 2015. If we do nothing, by 2015 we won't be producing enough energy for the UK."
The industry insider said her company has had a planning application lodged for the past five years that would increase storage by 4 per cent, but said the government had been slow to act.
She said that in addition to the storage problem, only a quarter of all orders for gas placed by UK companies from countries such as Nigeria and regions including the Far East arrive because it gets diverted to countries such as Japan that are willing to pay more.
"There just isn't enough coming through at the moment and as we look to the future we are going to become even more reliant on gas," she said.
"We were importing 20 per cent last year, and it will be 40 per cent this year."
This story was featured on the Scotsman website.
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MPs warn of energy price impact
Monday, July 28, 2008
Rises in gas and electricity bills in the near future will have serious consequences for millions of households, an MPs' committee has said.
It also warned that thousands of jobs in manufacturing would be at risk if UK prices stayed higher than those faced by industry in the rest of Europe.
The Business and Enterprise Select Committee report said problems in the sectorneeded to be addressed urgently.
But it found no evidence that key firms colluded to keep energy prices high.
The committee's report, published on Monday, comes just a few days after EDF Energy became the first big supplier to announce widely-predicted summer price rises.
Competitors
The committee decided on an inquiry after the "big six" energy companies announced double-digit price rises at the start of 2008. The big six firms are: Npower, EDF Energy, British Gas, E.On, Scottish Power, and Scottish and Southern Energy.
The report voiced concerns that "the UK's energy markets are not functioning as efficiently as they should".
"Industrial consumers now face prices above European levels," the report added.
"If these price differentials are sustained, they will affect the competitiveness of the UK economy."
'No collusion'
The inquiry addressed the issue of why there was only a very small difference in prices charged by the major suppliers.
It said that nobody brought any evidence of price collusion among the big six, simply that it was easy for each to predict what the other five were going to do.
"Just because we have found no evidence of collusion does not mean we have given the big six energy companies a clean bill of health - far from it," said committee chairman Peter Luff.
"It is clear that there are very real problems in the energy markets at all levels ... which need to be addressed."
The committee was concerned about how the wholesale markets functioned, including why gas producers appeared unwilling to trade in the forward gas market.
The report was critical of the government for failing to act quickly enough to encourage investment in gas storage, as the UK becomes more dependent on importing gas.
It also warned that the potential takeover of British Energy could undermine the diverse market in electricity generation in Britain.
Fuel poverty
Energy regulator Ofgem, which is conducting its own inquiry into the market, was also criticised, with the committee demanding a "greater sense of urgency" in some areas.
On Friday, EDF raised gas prices by 22% and electricity prices by 17% for domestic and small business customers.
With all the major suppliers expected to follow suit in the coming weeks, the committee said there would be an inevitable increase in fuel poverty.
The government estimates that 2.5 million households are in fuel poverty - defined as when more than 10% of household income is spent on fuel bills - but watchdog Energywatch says the figure is more than four million.
"We believe that the time is right for a root and branch review of government policy on fuel poverty," the committee said.
It said social tariffs failed to reach the vast majority of fuel poor customers, were inconsistent and confusing.
The committee wants the government to define the criteria for these tariffs and identify the customers who should qualify for the discounts.
It also wants more focus on improving energy efficiency in homes, to help cut bills, and called for an reversal of the funding cuts in Warm Front grants.
This story was featured on the BBC News website.
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Reform UK's distorted power market, MPs say
Monday, July 28, 2008
Britain's energy markets need a radical shake-up to tackle inefficiencies as homes and businesses brace themselves to pay significantly more for power in the future, MPs warn today.
Consumers could be forced to pay more for their power than those in other countries, and if the discrepancies are not tackled it could hit the competitiveness of British manufacturing, the business and enterprise committee says in a report.
As well as measures to increase the markets' efficiency, the committee is demanding that government and energy companies change their approach to fuel poverty in the face of high and rising gas and electricity prices.
It states: "Gas and electricity bills for domestic consumers [will] rise significantly in the near future, over and above the increases already announced this year, with serious consequences for millions of households, especially the fuel-poor."
As part of a wide-ranging report into the UK's energy markets, the committee argues for more gas storage capacity to be built and more UK pressure for the liberalisation of continental European markets.
The committee began its inquiry in the wake of the rise in domestic energy prices earlier this year, and is publishing its findings as more increases are set to kick in.
EDF Energy said on Friday it would increase its gas prices by 22% and electricity by 17%, with other major suppliers likely to follow suit in the coming weeks.
In its report, the committee acknowledged that no one had produced any evidence suggesting collusion between energy suppliers in either the wholesale or retail markets. But it noted that in a retail market dominated by six big companies - British Gas, Scottish and Southern Energy, Scottish Power, EDF Energy, E.ON and npower - "it is easy for those players to make informed judgments about the behaviour of their competitors" and that "this alone can distort competition".
Committee chairman Peter Luff said: "Just because we have found no evidence of collusion does not mean we have given the 'big six' energy companies a clean bill of health - far from it.
"It is clear there are very real problems in the energy markets at all levels, and going beyond these six companies, which need to be addressed."
The committee said that while domestic measures could not keep prices down when they were high elsewhere, it noted: "We have concerns that the UK's energy markets are not functioning as efficiently as they should, and that UK prices may be higher than those of [other] countries."
The committee said a fundamental policy rethink on fuel poverty was required. Programmes were not sufficiently directed at those in most need, and efforts by the government and industry needed to be focused on improving the housing stock of the fuel poor as the most effective way of reducing bills and carbon emissions.
"It is very disappointing that ... the government has reduced the budget for Warm Front [energy efficiency grants] at a time when the need for it is greatest."
The fuel poverty charity National Energy Action described the report as a "breath of fresh air ... Its recommendations are bold but realistic."
The committee also expressed concern at the higher bills faced by businesses and said: "Industrial consumers now face prices above European levels. If these price differentials are sustained, they will affect the competitiveness of the UK economy, and put many thousands of jobs in manufacturing at risk."
The manufacturers' organisation EEF said: "Under our much-vaunted liberalised market, industrial consumers are now paying significantly more for their energy than their competitors in Europe. Government must act robustly on the committee's recommendations." The report calls on Ofgem to look at both the forward gas market and the supply of electricity to small and medium-sized companies.
This story was featured on The Guardian website.
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UK Lawmakers' Inquiry Sees Significant Flaws In UK Energy Market
Monday, July 28, 2008
LONDON -(Dow Jones)- A parliamentary inquiry concluded Monday there are significant flaws in the U.K.'s gas and electricity markets and called on the regulator, Ofgem, to conduct a thorough investigation and refer the sector to the Competition Commission if it can't come up with remedies.
The inquiry, conducted by parliament's Business and Enterprise Select Committee, also raised concern over the possible imminent takeover of nuclear generator British Energy PLC (BGY.LN) by Electricite de France SA (1024251.FR). The U.K.'s wholesale
electricity market, "may be undermined by market consolidation, such as the takeover
of British Energy," the committee said in its report. It called on Ofgem and the Competition Commission to, "ensure no single generator has excessive market power."
"It is clear that there are very real problems in the energy markets at all levels," said the committee's chairman, Peter Luff. "Our view is that changes can best be made through improving market design, by taking specific regulatory steps, and by continuing to work for liberalization of European markets."
"Ofgem, though, is going to have to demonstrate a rather greater sense of urgency than has been apparent so far," he said.
The committee said it found no evidence of anticompetitive collusion between the big six suppliers in the U.K. - Centrica PLC (CNA.LN); Scottish and Southern Energy PLC (SSE.LN); the U.K. arm of Germany's E.ON AG (EOA.XE); Npower, the U.K. arm of RWE AG (RWE.XE); ScottishPower, a subsidiary of Spain's Iberdrola SA (IBE.MC); and EdF Energy, the U.K. arm of Electricite de France SA (1024251.FR). However, it advised the regulator to remain watchful for companies that were, "abusing their market position to choke off new entrants," and refer the matter to the Competition Commission if they find any evidence of this.
"In a retail market dominated by six major players, it is easy for those players to make informed judgments about the behavior of their competitors...this alone can distort competition," the report said.
The inquiry also raised concerns about the day-to-day functioning of gas and electricity markets in the U.K. and the impact this is having on prices and competition.
The wholesale electricity market has, "a severe lack of liquidity," that is contributing to price volatility and dulling market signals for potential new investors in U.K. power generation, the report said. It also concluded that the liquidity on the forward gas market beyond a few months into the future, was lacking and recommended that "Ofgem investigates urgently why gas producers seem unwilling to trade on the forward market."
The committee also criticized the government for failing to spot and act on the growing need for gas storage as domestic U.K. production declines. "This is now an issue of national importance," the report said.
Ofgem should also investigate the rules governing the usage of the Isle of Grain liquefied natural gas import terminal, which it said could be contributing to the under use of the facility, the report said.
The committee predicted that, "gas and electricity bills for consumers (will) rise significantly in the near future, over and above the increases already announced this year." U.K. industry may struggle to compete with European rivals because they face comparatively higher energy bills, the report concluded.
EdF Energy raised its gas prices by 22% and its electricity tariffs by 17% Friday, blaming rising wholesale energy costs. Other suppliers are widely expected to do the same shortly.
-By James Herron, Dow Jones Newswires; +44 (0)20 7842 9317; james.herron@dowjones.com
This story was featured on the EDF website.
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Consent secured for largest onshore wind farm in Europe
Friday, July 25, 2008
Scottish and Southern Energy plc ("SSE") has been granted consent by Scottish Ministers to develop in southern Scotland a wind farm with a total capacity of up to 456MW. The wind farm will be built in two phases and, on completion, will be the largest onshore wind farm in Europe.
The wind farm, known as Clyde, is located between Biggar and Moffat. It became part of SSE’s development portfolio when it acquired Airtricity earlier this year. Scottish Ministers’ decision to award consent follows a Public Inquiry into the development, which was concluded in 2006.
As a result of their decision, SSE now has almost 1,500MW of onshore wind farm capacity in operation, in construction or with consent for development in the UK and Ireland, which compares with 875MW when the agreement to acquire Airtricity was announced in January 2008.
The wind farm will eventually have up to 152 turbines and construction work is expected to begin later in this financial year. First commissioning is scheduled for 2010 and completion of both phases scheduled for 2011. Its development is expected to require the investment of around £600m, which is included within SSE’s existing plans to invest £2.5bn in renewable energy in the UK and Ireland over the next five years.
It is estimated that around half of the total investment (around £300m) will be placed with Scottish companies and over 200 full time jobs will be created during the three-year construction period. Discussions have been held with South Lanarkshire Council and Scottish Enterprise Lanarkshire to maximise local supplier involvement in the construction and ongoing maintenance of the wind farm.
SSE is also committed to a community fund to enable local communities to benefit from the development of the wind farm. Discussions with regard to the provision and management of these funds, which are expected to be around £1m a year and centre on a long-term education and skills programme, are currently taking place with South Lanarkshire Council and other representatives of the local community.
Any proposal to construct, extend or operate an onshore wind farm in Scotland with a generation capacity in excess of 50 Megawatts (MW) requires the consent of Scottish Ministers under Section 36 of the Electricity Act 1989. Consent is generally granted with conditions and in this case they include completing ongoing work with NATS on air traffic control radar-related issues.
Including hydro schemes and offshore wind farm developments, SSE now has around 3,500MW of renewable energy capacity in operation, in construction or with consent for development. In addition to Clyde, SSE (including Airtricity) has submitted to planning authorities applications for consent to develop wind farms in the UK and Ireland with a total capacity of around 600MW.
Ian Marchant, Chief Executive of SSE, said: "I am very pleased that the Clyde wind farm has received consent. It is another example of the value of the Airtricity portfolio of renewable energy projects which we acquired earlier this year and provides us with another major investment opportunity.
"Projects like Clyde are essential if Scotland and the UK are to have any hope of meeting legally-binding EU targets for renewable energy. Scottish Ministers aim to make Scotland the green energy capital of Europe, and giving the Clyde wind farm consent is evidence of a willingness to take decisions which are consistent with that ambition.
"Clyde is clearly going to be a major project, with significant economic opportunities for the local community. Our priority is to satisfy the conditions relating to the consent, including completing our constructive discussions with NATS. We will also ensure that work at the site is carried out in a professional manner, sensitive to the needs and concerns of the local community."
This story was featured on the Scottish and Southern Energy website.
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Oil prices fall to six-week low
Tuesday, July 22, 2008
Oil prices have fallen to a six-week low as US energy demand fell and a hurricane in the Gulf of Mexico appeared to be missing oil facilities.
US light sweet crude fell as low as $125.63 a barrel, well off its 11 July peak above $147 a barrel.
Petrol consumption in the US is 2.2% below last year's levels, according to a MasterCard survey, suggesting that higher prices are hitting demand.
But oil prices are still almost 30% above their level at the start of 2008.
$20 decline
London Brent crude fell $3.23 to $129.38 a barrel on Tuesday.
"We've now seen more than a $20 decline in the crude oil market from the highs and this suggests that we've seen enough of a shift in the supply and demand balance on a larger scale to cap the market," said Tim Evans, energy analyst for Citi Futures Perspective.
There was relief in the market that the approaching Hurricane Dolly would not have a big impact on oil and gas production.
The US Minerals Management Service announced earlier on Tuesday that only 5% of oil and gas production in the US had been shut down.
The dollar strengthening against the euro also put pressure on oil prices as crude has been used as a hedge against the weakening US currency.
This story was featured on the BBC News website.
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Renewable Energy: E.ON takes 50 percent stake in world’s largest offshore wind farm
Monday, July 21, 2008
E.ON has today joined with Danish utility DONG Energy to buy out Shell’s stake in the London Array offshore wind farm. E.ON and DONG Energy will become 50:50 partners in the project.
London Array is the world’s largest offshore wind farm project with an estimated total power up to 1,000 megawatt (MW). It is located around 15km from the Kent and Essex coasts in the outer Thames Estuary, and may include more than 270 wind turbines. Due to high wind speeds, a low water depth and suitable ground conditions, London Array is regarded as an ideal location for a large-scale offshore wind farm. It is hoped that the first phase of the project will be completed by the end of 2012, subject to securing a number of important contracts, such as those for wind turbines.
Shell, who has contributed to the project's significant progress to date, has committed to leave their staff in the project until the end of the year to enable a smooth transition and handover.
Worldwide E.ON plans to invest €6bn in renewable energy and climate protection projects by 2010. Its Market Unit E.ON Climate & Renewables already operates three offshore wind farms with an overall generation capacity of 83 MW, with a further 200 MW currently under construction.
This story was featured on the Eon website.
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Tesco To Get Power From Straw
Friday, July 18, 2008
Britain’s favourite supermarket is to cut its carbon footprint by using straw to power its business.
Tesco has been given the go ahead to build Britain’s first ever straw-powered Combined Heat and Power plant to meet the electricity and heating needs of its Goole Distribution Centre.
The new plant will generate 5MW of electrical power – enough energy to run eight Tesco Superstores. All excess electricity will be sold back to the grid.
David North, Community and Government Director, said:
“We’ve set ourselves stretching targets to reduce the carbon intensity of our business, and energy from renewable sources is a key part of our strategy.
We’ve identified five sites that would be suitable for further biomass technology, and are making big investments in wind turbines too.”
Straw is a pure, natural material and a by-product of local farming. As straw is a renewable material rather than a fossil fuel, the CO2 emitted is equal to the amount it has absorbed whilst growing, effectively making the energy carbon neutral.
The plant works by burning straw which powers a steam turbine, generating electricity. The particulates (polluting particles) are then filtered to keep them from escaping into the air. The only waste from the process is ash which can be used by other industries, or passed back to the local farmers to be used as a fertiliser.
Tesco estimates that it will have recouped the £12m set up costs within six years. After this time, energy generated by the plant will cost the supermarket less than is currently charged for grid electricity.
Tesco has set itself a stretching target to halve the carbon footprint of its estate (as at 2006) by 2020. This single initiative will save 17,000 tonnes of CO2, and will pave the way for further investment in biomass energy generation.
Tesco has already made substantial investments in energy efficiency and new low-carbon technologies – investing £86 million last year alone. It is working with the planning authorities to build a number of new wind turbines and recently secured planning permission for two large wind turbines at its Distribution Centres in Daventry. These 90m high turbines will each generate 800KW (peak) of power. It is applying for consent for another three 100m turbines which will each generate 1.25MW.
Building work at the supermarket’s Distribution Centre in Goole will begin shortly, and the power plant will be operational later next year. The supermarket has also submitted a planning application to build a second small-scale biomass plant at their Livingston Distribution Centre.
This story was featured on the Tesco website.
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Rolls-Royce eyes cut of £50bn nuclear market
Thursday, July 17, 2008
Rolls-Royce is creating a nuclear unit to ensure that it gets a slice of the global civil nuclear market that the engineer believes will be worth £50bn in 15 years' time.
In the face of growing pressure to replace existing dirty power sources with environmentally friendly alternatives, nuclear is firmly back on the agenda. Rolls is already talking to utilities and reactor vendors around the world, particularly those involved in the design of next-generation reactors, and the newly created 450-strong division could ultimately outstrip the group's £1.5bn marine business and employ several thousands of people.
Once reticent about its involvement with the Royal Navy's long-running nuclear programme, Rolls is now keen to champion its experience.
"We have kept a low profile about our nuclear business in the last few decades but we think there is now going to be a nuclear renaissance," Jonathan Hale, the company's business development director, said. "We have more capacity and more skills than any other company in the UK by far, and with the growth of the civil market it is time to focus on that more."
The group does have long experience to draw on. It has been involved in nuclear engineering since the first transfer of pressurised water reactor (PWR) technology from the US to the UK in the 1950s. It employs 2,000 nuclear specialists, of which around half are engineers, and it manufactures all reactor components apart from the enormous containment vessel and stream generator. It also has expertise at the design, safety testing, licensing, and maintenance phases.
Rolls is, unsurprisingly, a vocal supporter of the Government's plans for eight new nuclear power stations, the earliest of which could come on stream in 2018. But the company is also trumpeting its UK-centricity – including an accredited supply chain comprised of more than 260 companies that between them employ some 20,000 people.
"It is important for the UK industry to be involved: these assets last up to 60 years, safety needs to be kept under local control, and there is the potential to create thousands of high-value jobs," Mr Hale said.
Currently the UK is at the forefront of the nuclear comeback, largely because only three of its 10 existing reactors – which between them generate nearly a fifth of the country's electricity – will still be going in 2020.
"If this country stays at the front, globally, then the industry will build up a capability that can then be exported," Mr Hale said. "So we are keen the nuclear programme goes ahead quickly here."
But the heady mix of political issues, planning procedures and construction complexity makes progress glacial.
George Lowe, the president of Rolls' new division, says the domestic market is a priority, but is not the only one. "Our preference is for business in the UK, but if there is slippage in that programme or even, God forbid, it doesn't happen, there are other opportunities for us to use our capability and expertise on the global stage," he said.
Rolls is already contracted to both EDF, the French utility, and Westinghouse, the US nuclear giant, as part of the licensing phase of the design of the next generation of reactors.
"There is a level of participation with certain reactor vendors and utilities that is naturally in advance of others," Mr Lowe said.
This story was featured on The Independent website.
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Ofgem tightens ‘green tariff’ code
Wednesday, July 16, 2008
Power suppliers offering their customers so-called green tariffs will have to spend more on renewable electricity, under rules to be announced by Ofgem.
Such tariffs, under which suppliers contract to derive some or all of their energy from renewable sources, have become popular as environmental awareness has grown among consumers and businesses.
But the standard of such tariffs has varied considerably among suppliers, leading Ofgem, the industry regulator, to close some of the loopholes suppliers used to claim benefits that might not have been all they seemed.
Electricity suppliers must, by law, generate a certain proportion of their power from renewable sources, such as wind turbines. But, as the Financial Times revealed this year, some suppliers have charged a premium for such electricity under their green tariffs – meaning many customers were paying companies extra to do what they would have had to do anyway.
The new code, published on Wednesday by Ofgem, prohibits suppliers from offering customers green tariffs based only on their legal obligations to supply renewables and demands that they are able to prove they are taking extra measures that produce environmental benefits.
Customers already pay extra for companies to generate renewables, as contributing to the renewables obligation subsidy makes up 8-10 per cent of electricity bills.
The code will be voluntary at first and companies have six weeks to sign up. If those offering green tariffs fail to sign up by September, Ofgem said it would move to regulation. In order to qualify as offering a green tariff, companies will now have to show they take extra measures such as investment in research and development relating to renewable power, or setting up projects such as combined heat and power plants, where excess heat from production is used to heat local buildings. Tariffs will be graded bronze, silver or gold depending on the level of investment or the extra measures undertaken.
Alistair Buchanan, chief executive of Ofgem, said: “We intend to shine a light on to suppliers’ green offerings to show the customer why a tariff is green. We want suppliers to stop re-packaging their existing environmental activity as green immediately and to align their marketing with our guidelines.”
Tim Wolfenden, head of home services at Uswitch.com, the price comparison service, said: “This will separate the suppliers that are fully committed to renewables from those that aren’t. It will give consumers confidence that they are having a beneficial effect.”
Ofgem said about 350,000 domestic customers were signed up to green tariffs. It last produced guidelines on how power suppliers should label their green tariffs in 2002 but these were voluntary and some companies ignored them. Ofgem said on Tuesday it would enforce the new code if companies failed to comply, perhaps by inserting new conditions into companies’ licences.
By the end of the year the regulator plans to appoint an independent body to accredit the green tariffs.
This sotry was featured on The Financial Times website.
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Low-cost broadband defies credit crunch
Wednesday, July 16, 2008
Broadband is the only household utility bill to buck the trend of rising household bills in the wake of the credit crunch, according to broadband comparison site Top 10 Broadband.
“Broadband bills have plummeted by over 60% in the past 18 months while gas and electricity have risen by 15% and are set to rise further by the end of the year” says Jessica McArdle, a spokesperson for Top 10 Broadband.
McArdle continues “Rampant competition among ISPs is driving the broadband market to cut the cost and raise the speed of home broadband packages. If you signed an 18 month contract in January 2007, the average deal would have cost £13.73 a month, if you were to switch from this package now you would be looking at offers starting at just £3.25 a month – the opportunity for savings is obvious and people need to consider switching broadband provider if they are over-paying.
“As well as cheap home broadband, another alternative and potential cost saving for some households is mobile broadband; which despite being more expensive per Gb of download, may work out cheaper than home broadband as it removes the need to have BT line rental at home. Starting at just £10 a month it ticks all the boxes during this credit crunch. The saving of £131 a year in landline charges makes this a particularly enticing prospect as belts tighten.
“Mobile broadband was once considered a luxury to supplement one’s broadband use outside of the house. However, like home broadband, mobile broadband prices have dropped dramatically in 2008, its speeds have risen and its download allowances have become more encompassing.
“As well as the importance of access costs, the internet itself has become the primary source of information for ‘Broadband Britain’ as households look to spend less on goods and services. With the credit crunch in full swing, people are comparing prices online like never before.
“Additionally, with technological innovations such as YouTube and the BBC’s iPlayer superseding traditional forms of home entertainment, broadband has become a more essential and affordable utility and people are not willing to give it up despite increasing financial constraints.
“With talk of a recession on the horizon, there is no room for complacency and consumers must reconsider their expenditures and make savings where they can. Savvy households are taking advantage of record low prices for broadband and are switching in increasing numbers.
This story was featured on the Top 10 Broadband website.
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UPDATE 1-EDF to develop pilot tidal power project in France
Tuesday, July 15, 2008
PARIS, July 15 (Reuters) - French power group EDF (EDF.PA: Quote, Profile, Research) on Tuesday said it will build three to six turbines along the northern coast of Brittany, in France, to produce electricity from the energy in tidal currents.
The pilot scheme, which EDF said is a world first, would be linked to the grid off the city of Paimpol, and have a total capacity of between 4 and 6 megawatts by 2011.
EDF is Europe's biggest nuclear power producer with 58 reactors in France that have a total nuclear generation capacity of more than 60,000 megawatts.
The project will involve an investment of between 23 million and 27 million euros ($36.7 million-$43.1 million) that EDF will finance jointly with local and European authorities, a spokeswoman at EDF said.
Energy from tidal currents, which emits no greenhouse gases and has the advantage of being predictable, could become a key source of renewable energy, it said in a statement.
"In the long term this new source of energy could make a significant contribution to the production of electricity from renewable sources, in particular in the United Kingdom and France," EDF said in a statement.
EDF said Britain and France jointly had 80 percent of the potential for generating electricity from tidal currents in Europe, which it estimated at 10 million megawatt-hour per year.
Utilities and oil majors across Europe are seeking to develop cleaner energy sources as part of a drive by the European Union to cut carbon dioxide emissions by one fifth by 2020, compared to 1990 levels. (Reporting by Marie Maitre)
This story was featured on the Reuters UK website.
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MPs criticise government over CO2
Monday, July 14, 2008
The government has made "very poor progress" on reaching its own carbon emissions-cutting targets, MPs say.
Ministers want departments and agencies to reduce emissions by 12.5% by 2010/11 compared with 1999/2000 levels - and to be carbon-neutral by 2012.
But the influential environment audit committee said a cut of just 4% had been achieved by 2006/07.
Chairman Tim Yeo said this damaged the government's "moral authority" on environmental issues.
'Degree of confusion'
The committee said it was "extremely disappointed" that only 0.0004% of all electricity consumed by the government was generated on Crown property using renewable energy sources such as wind, solar or biomass power plants. Ministers were relying "too heavily" on buying offsets to help achieve carbon neutrality, the report "Making Government Operations More Sustainable" said.
There was a "degree of confusion" about how the targets would be met and these "essential issues" should be worked out urgently, the committee added.
Mr Yeo, a Conservative former minister, said: "Until the government shows that it is living up to its commitments it will find it hard to maintain the moral authority to influence the rest of us."
But a government spokesman said it was "fully committed to protecting the environment" and limiting the effects of climate change by reducing carbon emissions and waste across its own estate and operations.
"Government is already excelling in some areas, notably the procurement of renewable energy," he said.
'Significant progress'
"However, we recognise that much more needs to be done to achieve our goal of being a leader in the EU in this area.
"The Cabinet Secretary Gus O'Donnell is accordingly giving this work his personal leadership."
The spokesman added that data used in the committee's report was for 2006/7. "Since then further significant progress has been made," he said.
In its report, the committee also expressed concern over the reliability of emission figures.
Members criticised the Ministry of Defence for claiming a big cut in emissions after it sold the defence agency QinetiQ.
In reality, the committee said, the government was simply moving these emissions "off-balance sheet" to the private sector.
A committee spokesman said: "The government has now stopped claiming this as a cut in emissions, but the committee warns it not to make similar claims in the future."
The Office of Government Commerce should annually publish details of the amount the Government expected to spend on offsetting emissions, it was added.
This story was featured on The BBC News website.
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Nuclear list 'not yet finalised'
Monday, July 14, 2008
The government has denied that a list of sites for new nuclear power stations has already been drawn up.
The Department for Business said the process was ongoing and reports to the contrary were "nonsense".
Its comments follow reports that ministers have already selected sites alongside existing reactors such as Sizewell, Dungeness and Hartlepool.
The prime minister has called for "a renaissance of nuclear power" as an alternative to fossil fuels.Reports suggest ministers have already identified sites alongside a number of existing reactors - Heysham, Hinkley Point and Bradwell are among the others mentioned - as the most suitable places for the new nuclear stations.
But the Department for Business issued a statement saying: "This is nonsense. There is no pre-determined list of sites for building new nuclear power stations.
'Expensive and dirty'
"We are currently undertaking a strategic siting assessment process which will identify the criteria to assess the suitability of sites and will also identify a list of sites nominated which meet those criteria.
"The government has set out a clear vision for nuclear new build. Energy companies have been invited to bring forward proposals for new nuclear power stations as part of the solution to the UK's future low carbon energy needs."
Mr Brown has previously called for the UK to increase its nuclear power capacity as an alternative to burning fossil fuels, which many experts believe to be a cause of climate change.
In January ministers announced that they backed new plants and published a review of possible sites where there have been nuclear power plants before.
However opponents of the plans say new reactors will be expensive, dirty and dangerous.
Campaign group Greenpeace argues that research suggests that even 10 new reactors would cut the UK's carbon emissions by only about 4% some time after 2025.
This story was featured on The BBC News website.
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PM's remarks at the Union for the Mediterranean Summit
Sunday, July 13, 2008
Transcript of the Prime Minister's remarks delivered at the Union for the Mediterranean Summit in Paris.
At this summit the 27 nations of the European Union and our Mediterranean neighbours pledge ourselves to take action to promote our mutual prosperity, security, liberty and democracy.
We must now leave behind the old wasteful, oil dependent ways of yesterday and embrace the new cleaner and sustainable energy future of tomorrow. The increases in oil and food prices we have seen over recent months are causing hardship to families and businesses in Britain and throughout Europe. They threaten economic instability and their production is environmentally not sustainable.
The years of cheap energy and careless pollution are behind us. We need a new strategy. Past total dependence on oil must give way to a clean energy future.
I have called for a better dialogue between oil producers and consumers and a more transparent market, and for measures to increase investment in oil production and refining. Following the meeting in Jeddah, Saudi Arabia last month we will take these initiatives forward at the meeting in London in December, endorsed this week by the G8.
But improving the functioning of the oil market can be only one half of our strategy. The other must be to set ourselves on a new energy path - a path from our economies that are today over-dependent on oil towards the post-oil energy economies of the future. And moving towards this sustainable energy economy helps us meet our economic, political and environmental goals.
Today in Europe more than a third of our energy comes from oil, and a further 40 per cent from other fossil fuels - gas and coal. Only around 20 per cent of our energy comes from low carbon sources - renewables and nuclear. None as yet comes from fossil fuels with carbon capture and storage.
With our ambitious climate and energy package - which we must commit to completing under the French Presidency this year - Europe is on a path to increase the proportion of renewable energy in its energy mix by 2020 from under 10 per cent to 20 per cent. And if we are to meet our long-term climate change objectives - to reduce our emissions by at least 60 per cent by 2050 - Britain, alongside our European partners, will need to do even more.
And at the same time as we move to clean energy sources, we must also become much more efficient in the way we use energy. Over the last forty years the energy intensity of the British economy - the amount of energy we use per unit of national income - has been halved. But as our economy continues to grow we must reduce that still further.
So let me set out the five main points of an oil replacement strategy.
First, since 70 per cent of future oil demand is from transport, we need a step change in the fuel efficiency of vehicles. So Europe must push ahead with mandatory fuel emission standards for new cars. But to drive innovation in the car industry we need not just a target for 2012, but a target for 2020 to match those in the rest of the energy package. The UK is urging that this should be an average of 100 grammes per kilometre, a cut of 40 per cent from the 164 grammes today. This could reduce road fuel consumption in Britain by an average of 2 billion litres of road fuel a year and save the typical British motorist around ?500 pounds a year in running costs.
To achieve such a target we will need to see the mass production of electric vehicles - conventional hybrids, plug-in hybrids, and fully electric vehicles. Electric vehicles are now available on our roads - but they are specialist cars and vans available only in small numbers. I want to see the mass production of hybrid and electric drive technology in ordinary family models.
And I want to see those cars manufactured in Britain. So I will be meeting with leaders from the British motor industry next week to discuss their plans for hybrid, electric and other low carbon car technologies.
Already initiatives are under way in several countries to accelerate the commercialisation of electric vehicles by supporting the required charging infrastructure and automotive technologies.
At the European Council in June we agreed to explore the scope to accelerate the introduction of commercially viable electric vehicles - and the infrastructure that their widespread use would require - in the EU.
And today, as a next step, Britain is discussing with other countries - including Denmark, Portugal, Israel and Germany - how we can create a strong policy and consumer environment to promote the development of electric vehicles. And I will propose that we convene a meeting of energy, automotive and planning experts to exchange key information on infrastructure requirements and technology standards in advance of the London energy summit later this year.
Second, we need all countries to commit to taking rapid action to improve energy efficiency in households and businesses. The G8 nations this week committed to implementing the IEA's 25 recommendations on energy efficiency. If implemented globally these could cut oil consumption by 15 per cent and energy-related carbon emissions by 20 per cent, equivalent to the emissions of the US and Japan combined. Europe must therefore commit to implementing its own energy efficiency action plan.
The UK is the first European country to phase out energy inefficient light bulbs - which we will do by 2011. We want the rest of the continent to follow. We need agreement on lower levels of VAT for energy saving goods, as proposed by Britain. And we need to move faster to develop energy efficient standards for appliances, such as phasing out inefficient standby on electronic goods.
In Britain we will also introduce new measures to encourage the installation of household insulation and energy efficiency appliances, which can together save a typical British family up to 20 per cent - ?170 pounds a year - off their energy bills.
Third, I am convinced that we need a renaissance of nuclear power. Britain is now moving quickly to replace its ageing fleet of nuclear power stations. And all around the world I see renewed interest in this technology, as countries contemplate the alternative - continued oil dependence and unchecked climate change.
So Britain will work to make possible the best arrangements for security, safety and disposal. Last week the Nuclear Decommissioning Authority announced a preferred bidder for the clean up contract at Sellafield. We are also collaborating with France in this field, and stand ready to do so with others.
Fourth, we need a massive expansion of renewables. Britain is fully committed to the EU target that 20 per cent of all energy must come from renewable sources by 2020. Last month Britain set out its strategy to meet our own 15 per cent renewable target - a $100 billion investment programme over the next twelve years.
As a result of this strategy Britain will become the global centre for offshore wind. We will see major investment in energy from waste and biomass and in new forms of microgeneration. We are pushing ahead with the development of marine and tidal technologies, including an examination of a tidal scheme on the River Severn, which could supply 5 per cent of all the UK's electricity.
And now I believe it is time for a major investment in the development of solar power. The IEA suggests that additional investment of up to 215 million square meters of solar panels will be needed every year to 2050. And particularly in the Mediterranean region, concentrated solar power offers the prospect of an abundant low carbon energy source. Indeed, just as Britain's North Sea could be the Gulf of the future for offshore wind, so those sunnier countries represented here could become a vital source of future global energy by harnessing the power of the sun.
So I am delighted that that the EU is committing at this summit to work with its neighbours - including Egypt, Jordan, Morocco and the League of Arab States - to explore the development of a new 'Mediterranean Solar Plan' for the development and deployment of this vital technology from the Sahara northwards.
Last, and because we recognise that fossil fuels will continue to be an important part of our energy supplies for years to come, we must make good our commitment in the EU and globally to the development and deployment of carbon capture and storage. I am pleased that last month the European Council asked the Commission under the French Presidency to develop an incentive mechanism, which would enable the EU to meet its target of up to 12 demonstration plants by 2015.
The UK and France committed earlier this year to work together on an action plan to work towards not just demonstration but the EU's aspiration to move towards deployment of CCS by 2020. Britain is already working with Norway, Canada and the Netherlands on how to do this. And we are discussing this weekend how we can collaborate with Spain in this field, bringing together British and Spanish companies and experts to examine and exploit opportunities.
The development and deployment of all these low carbon technologies will require a partnership between government and the private sector. Governments can and will provide the right framework of regulation and incentives. The private sector will have to provide the investment. But we can support this too.
So I call on the European Investment Bank to use its 3 billion euro sustainable energy fund to support a clear strategy for the reduction in global dependence on oil and traditional fossil fuels and for the development and deployment of new low carbon energy technologies. And we need to see a similar refocusing of EIB spend within the EU.
We live in a new era. Today our globalised, energy-hungry and warming world requires a shift from oil dependence to sustainable energy.
Only with political leadership from all of us will we be able to move towards a new sustainable economy. This is now Britain's goal. It must be Europe's destiny. In this unique partnership of European and Mediterranean nations, let us commit ourselves to realising it.
The speech was featured on the website of 10 Downing Street.
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SS&E the 'front-runner' in £2bn auction for Energia
Sunday, July 13, 2008
Scottish & Southern Energy is running the rule over a potential cross-border utility takeover, with Energia, Ireland's biggest independent power company, in its sights.
City analysts say the Scottish utility is a front-runner for a £2 billion bidding auction, which is expected to be started this week when Dresdner Kleinwort posts an information memorandum to prospective bidders.
As well as SSE, led by chief executive Ian Marchant, this is expected to include other major UK and European electricity groups as well as financial buyers. The potential swoop comes as the latest Global 500 rankings of the world's largest corporations, published annually by Fortune magazine, show SSE surging 61 places to stand at 253.
That puts the Perth-based utility ahead of blue-chip giants such as Coca-Cola, 3M and Apple.
Commenting on the auction of Energia, one analyst said yesterday: "Normally you would think trade buyers would have an advantage over private equity in this sort of bid battle because of the duplication synergies they can get that are not available to financial buyers.
"However, it is not so simple with Energia, because there would be fairly limited cost-saving synergies with a UK or European utility taking it over. It should make the bidding interesting."
Arcapita, the Bahrain investment group that owns Viridian, Energia's parent company, decided to put the business up for sale after a strategic review by Dresdner. Indicative offers for the business are expected to be lodged by the middle of August.
SSE declined to comment yesterday, while Arcapita was unavailable for comment.
Analysts say other potential bidders for Energia, which has 35,000 customers, include Endesa of Spain and Eon, the German energy giant.
Marchant has made expanding into Ireland a priority and SSE, which boasts some 8.5 million customers, is understood to be in the frame to buy power plants being auctioned by the Electricity Supply Board, Ireland's state-owned power group.
Arcapita paid £1.62bn for Viridian less than two years ago. Once the sale is complete, Viridian would be left with assets including Northern Ireland Electricity, the transmission and distribution grid.
One analyst said: "Utilities are strong defensive assets in these difficult economic times. There should be no shortage of interest."
A deal is likely to be completed by the end of 2008, the City believes.
This story was featured on The Scotsman website.
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Hurricanes are ill wind for oil prices
Saturday, July 12, 2008
Bad weather can have a devastating effect on the fuel industry, writes Kristy Dorsey.
Amid concerns about record prices, levels of demand and the threat to production in areas of conflict, the oil market is adding another imponderable to its list of worries – predicting the weather.
Bertha, the first Atlantic hurricane of the 2008 season, waxed and waned during the past week on its slow drift towards Bermuda. Although forecasters determined early on that the storm was unlikely to threaten the Gulf of Mexico, home to about 15% of the world's oil supplies, her formation was a reminder that natural disasters can pose the same threat to markets as manmade ones.
It's a situation faced by the industry every year, with the hurricane season running from June to the end of October. While the last couple of years have been relatively benign in terms of damage and disruption to oil facilities, few have forgotten the devastation of 2005 when a record-breaking 28 tropical storms formed, including Hurricane Katrina.
In the wake of Katrina, oil prices jumped by about $10 per barrel. However, they remained around the $40-$50 level for most of 2005, a long way south of the current average of about $135.
Analysts emphasise that the ongoing turmoil in energy markets is grounded in the fundamentals of increasing demand and limited supplies. But just as sabre-rattling in the Middle East or conflict in Nigeria sends oil prices on an upward spike, the threat of a major hurricane heading into the Gulf would be another piece of news for speculators to seize upon.
"The market is very volatile and very nervous," says Angus McPhail, oil analyst with Alliance Trust in Dundee. "You do see that being reflected in the oil market, and also in equity markets right now."
McPhail, who inaccurately forecast that last year's hurricane season would be especially vicious, jests that it is generally unwise to try to predict the weather. However, having recently returned from a tour of tornado and hurricane damage in the US, he still believes this could be a year of particularly fierce hurricane activity. He highlights the record number of tornados that have ripped through the US Midwest this year, plus drought in Australia and other abnormal weather situations globally.
As such, McPhail says there is "definitely more potential" for major hurricanes in the coming months.
The 2008 Atlantic Hurricane Season Outlook issued through the US National Weather Service in May says it is most likely that activity will be near-normal or above-normal, as the area is still in an "active hurricane era" that began in 2005. This indicates the probability that between six and nine hurricanes will form, with between two and five of these being major hurricanes with sustained winds of 111mph or more.
"An above-normal season is most likely (65% chance), but there is also a 25% chance of a near-normal season, and a 10% chance of a below-normal season," researchers state in their outlook, which will be updated in August, the start of the peak months for the Atlantic storm season.
Despite the probability of ill winds ahead, McPhail dismissed talk that oil prices could jump to $200 per barrel. While a massive weather event like Katrina would certainly produce a knee-jerk reaction, he noted that natural disasters were "short-term things" that markets tended to quickly shake off.
"I don't see ($200 per barrel] being caused by just a hurricane," he says. "That wouldn't be enough.
"The futures curve is basically saying that by this Christmas we will be looking at $141 per barrel in terms of Brent."
David MacNair, oil analyst with Brewin Dolphin, agrees. He says that although markets were "very focused" on hurricanes while they were happening, the broader impact on prices was usually minimal. However, until demand for oil slows sufficiently, it is reasonable to expect that any major storms would push prices higher.
"The psychology of the market right now is to look for reasons why it might spike upwards, rather than go down," MacNair says. "Markets now are very volatile and very susceptible to even small changes in supply."
On Thursday, Opec warned of growing uncertainty over demand for its oil in the years to come, as European and US governments work to cut their oil dependence and promote alternative energy sources. The cartel's 2008 World Oil Outlook said demand for oil from Opec countries could fall to 31 million barrels per day (bpd) in 2012, below current production of 32.4 million bpd by Opec, which pumps about one-third of the world's oil and accounts for roughly three-quarters of the world's proven reserves.
This view was echoed by the International Energy Agency (IEA), the Paris-based adviser to 27 of the world's largest industrialised countries.
Its monthly report on the global oil market, also released on Thursday, slightly raised forecasts for total demand in 2008, the first upward revision by the IEA in seven months. Although the thirst for oil from developing countries such as China is expected to push overall demand a bit higher, the IEA noted that pressure on markets should ease next year as high prices cut consumption in the developed world.
"Given the economic slowdown in the US and the continued rise in international oil prices, transportation fuels demand is expected to decline (in the second half of 2008], thus adding to the bleak demand picture," according to the IEA.
MacNair says that until high prices sufficiently destroy demand in developed countries, upward pricing pressure would prevail. Despite some evidence that the fuel-ravenous US and other countries such as the UK were beginning to cut their consumption and reduce demand, he noted that such corrections take a long time to feed through.
"The hurricane season will be long gone before we see that," he says. "We are looking at the end of this year or the beginning of next year before that happens."
This story was featured on The Scotsman website.
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The next big project for the Union is in energy
Friday, July 11, 2008
The global energy system is undergoing a structural crisis. At its heart lies the need to restrain climatic change while at the same time dealing with energy security in an era of rapidly growing demand. The widening gap between rising demand for energy and limited resources of oil and gas has, together with speculation, increased fuel prices to record levels. This in turn has raised the spectre of a recession. These combined challenges pose a significant threat to international economic and political stability.
The current make-up of the European Union, with its flagging institutional reform owing to the Irish No vote, is ill-equipped to deal with these challenges. An outdated Nice treaty that does not reflect the new realities of an EU with 27 members is impeding effective decision-making, thereby undermining the EU's role in a rapidly changing international system that is increasingly being shaped by rising powers such as China, India and Russia. The urgency for institutional reform is quite clear to everyone. Nevertheless, in times like these the EU cannot limit itself to institutional reform alone.
What is needed is a new European Community that can successfully tackle the combined challenges of climate change, energy security and sustainable competitiveness. As the former Commission president Jacques Delors has suggested, the EU needs to build an institution that can facilitate common action in this field. In comparison with the formative years of the Community - when both the European Coal and Steel Community and the European Atomic Energy Community pursued energy-oriented goals - there is a lack of common action to expand the use of renewable energy that mitigates climate change, provides energy security and increases European competitiveness by transforming its economy into an energy-efficient system.
At a time of climate change and escalating energy prices, the EU needs a European Community for Renewable Energy (ERENE) that can overcome our dependence on fossil fuels and meet the energy challenges of the new century. Such a community would create the conditions necessary to take full advantage of the EU's climatic, geological and hydrological diversity. Thanks to this diversity the EU has the potential to meet its total electricity demand with renewable energy.
This visionary goal, however, cannot be achieved by unco-ordinated individual action by member states alone. ERENE would develop a strategy to facilitate common action for a rapid shift to renewable energy in the electricity sector. Funded by revenue from the European Emissions Trading Scheme, it would support the research, development and dissemination of new technologies, establish innovative pilot projects, promote investments in renewable energy through a common European support scheme and contribute to the development of transEuropean smart grids for the integration of renewable energy into the EU's electricity supply. It would also foster co-operation with non-EU states, particularly those with a large solar potential in the southern Mediterranean.
ERENE could be based either on the provisions for enhanced co-operation between member states under the aegis of the EU, or on a separate treaty. It would help the EU to achieve its climate and energy objectives of reducing greenhouse gases by 20 per cent and reaching a target of 20 per cent renewable energy by 2020. Moreover, it would prepare the ground for long-term targets beyond 2020. In addition, ERENE would boost the EU's competitiveness by supporting technological development and innovation.
The EU can, by creating ERENE, become a technological leader, facilitate the creation of new "green-collar" jobs, insulate its economy from rising energy prices and be an example in the fight against climate change for the rest of the world. As such, ERENE could, after the creation of a common internal market and a common currency, be a great new integration project for Europe, emphasising the vital importance of common action for Europe's future and ensuring that the instruments to deal with climate change and energy security are put in place. The EU needs another grand project to regain political momentum and to engage its citizens in a common European modernisation effort.
Michaele Schreyer is the former EU commissioner for budget (1999-2004); Ralf Fuecks is co-president of the Heinrich Böll Foundation, a think-tank and policy network affiliated with the German Greens.
This story was featured on The Financial Times website.
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World Coal-Fired Capacity To Increase By 60%
Friday, July 11, 2008
World coal capacity is expected to reach approximately 2,500 GW by the end of 2020, an increase of nearly 60 percent from 2008.
East Asia will lead the way with the biggest total gain in capacity, while West Asia will enjoy the largest percentage growth, approximately 300 percent. These are the latest forecasts in Coal-Fired Boilers: World Analysis and Forecast published by the McIlvaine Company.
Coal capacity in Western Europe is presently more than double compared to West Asia, but by 2020 the capacities are projected to be nearly equal. East Asia will operate nearly half (49%) of the world's coal-fired power plant capacity by 2020. China is already the world's largest operator of coal-fired plants. It passed the U.S. in total capacity two years ago. In 2007, China started construction of new coal-fired power plants with a net capacity of 93,000 MW.
The projected capacity through 2012 is based on the specific plant plans which are tracked by McIlvaine in its World Power Generation Projects. Capacity projections for later years are based on the odds assessment for important future events.
IMPORTANT EVENT ODDS:
Natural gas price exceeds $10 /MMBtu 10 to 1
Major greenhouse warming catastrophe 1 to 1000
Electricity demand continues to rise at current pace 5 to 1
Renewables become competitive in the near term 1-50
Nuclear supply problem is overcome 1-20
The longer range projections are dependent on many future events whose course can only be estimated. This forecasts assumes odds of 10-1 that natural gas price will remain above $10/MMBtu. The odds of a major greenhouse warming catastrophe occurring in the next 10 years are very low. Electricity demand will continue to rise along with GDP. Wind and solar will remain small contributors due to both price and supply capacity. Nuclear will carve out a niche but is not capable of rapidly expanding its contribution
For more information on Coal-fired Boilers: World Analysis and Forecast, visit http://www.mcilvainecompany.com/brochures/energy.html#n043.
This story was featured on the Power Online website.
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New scheme for assessing water licence compliance in Scotland
Wednesday, July 09, 2008
Industry and other water users in Scotland who abstract, impound or discharge to the water environment are being given the opportunity to comment on a new scheme to assess compliance with environmental licence conditions.
The Scottish Environment Protection Agency (SEPA) is looking to streamline its method for assessing compliance and is urging operators of fish farms, hydropower schemes, public water & sewerage supply and industries such as whisky manufacture, paper & pulp and mining & quarrying to comment on its consultation.
The watchdog has identified that improvements to its approach to assessing compliance with its licences will lead to more effective, transparent and efficient regulation. It is proposed to phase-in the new scheme from 1 January 2009.
Colin Bayes, Director of Environmental Protection and Improvement, said: “SEPA aims to be an excellent environmental regulator, enabling business to understand their environmental responsibilities, to comply with the regulations and to realise the many economic benefits of good environmental practice and performance.
“The new scheme is about SEPA streamlining compliance with licence conditions; it’s not about asking industry and other waters users to provide additional data or increase reporting effort. The new scheme will be targeted, efficient and effective. It will help us to deliver the desired environmental outcomes by working directly with licence holders. Public scrutiny of the published compliance results, along with potential financial incentives, is intended to encourage better environmental performance. The new scheme will direct SEPA’s resources to where they are required most, protecting the interests of those who depend on the water environment for drinking water, business and recreation.”
Scottish Water’s Environmental Regulation Manager, Jim Conlin, said: “Scottish Water welcomes the principles of SEPA’s compliance assessment scheme, in particular the straight-forward approach adopted and the commitment to more transparent regulation. We aim to fully engage in scheme trials over the summer, particularly as a number of our sites are regulated across different regimes. We will respond to the consultation in due course.”
The consultation was largely shaped by industry representatives at a workshop hosted by SEPA in May this year. Additionally, licence holders have volunteered to work alongside SEPA by participating in joint trials of the scheme during summer 2008.
This story was featured on the Environmental Expert website.
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Interview - Mark Powles: Stopping the trickle before it's a flood
Tuesday, July 08, 2008
Scottish Water's commercial arm is upping its game so it doesn't leak customers, its chief tells Terry Murden.
THERE are not too many businessmen who start their job with a 100% share of the market and a product that everybody wants.
It sounds like the perfect sector to be in, except that the water industry in Scotland is now open to competition, and for Mark Powles the battle is how to retain those customers he began with in March last year.
Powles is the first chief executive of Business Stream, the commercial wing of Scottish Water, that has yet to register much of a profile with the general public, probably because its customer base is restricted to businesses.
Three months on since the market was opened up Powles is planning a publicity drive, though his ready-made group of 100,000 customers and 130,000 billing sites includes every business in Scotland so getting the message over through word of mouth should not be difficult.
Even though we are only weeks into the new era of competition there has been criticism that not much switching has taken place. Powles says it's a bit early yet, and that the electricity and gas industries experienced the same level of apathy.
But he acknowledges that he lost only four businesses in 12 weeks. Out of 100,000 it is hardly a source of great concern, and at that rate we would be looking at only 16 in the first year. A thousand would have to switch supplier to knock 1% off market share and there seems little prospect of that happening. So, would the loss of 1,000 clients be regarded as success or failure?
"I won't be drawn on the level we would be happy with," says Powles, "and, yes, I am avoiding the question. Let's just say that losing a customer does not mean you have lost him forever."
Those who left fled to Berkshire-based firms Satec and Aquavitae. As Scotland on Sunday revealed last month, Aquavitae is no longer competing for business and its customers have now either returned to Business Stream or gone to Satec. Two other firms, Osprey, a division of Anglian Water, and Ondeo, are expected to enter the market shortly and could offer more serious competition.
"My model is to retain as many customers as I can and on merit, and look at where we can add value," says Powles. "We do not think of it as a monopoly, we have to think only about providing the right services at the right price, or the customer will go elsewhere."
While there is obvious comfort in having a clear advantage over his rivals, Powles admits he wants competition and gives the impression that he would feel let down if it didn't give him a few sleepless nights. "The threat of competition has forced us to raise our game. We didn't wait until April 1 (when the market was opened] to decide what to do. We were working with customer focus groups and finding out what they wanted."
It is likely to take some time for the changes to sink in, not least because the model that was introduced is a world first. Business customers of any size can choose their water and sewerage provider, overcoming the "one size fits all" approach of the previous regime. Its progress is being watched by Ofwat, the regulator for England and Wales, where a competitive framework has proved too restrictive to have any impact. In the 12-month run-up to the changeover Scottish Water achieved £10m in annualised savings.
Alan Sutherland, the chief executive of the Water Industry Commission for Scotland, the regulator, recognises that Business Stream is in pole position but the framework demands that it publishes its tariffs and gets no special privileges. It is not allowed to supply water at a loss. Sutherland believes it faces three options: managing its own decline; expanding into England and Wales to replace customers it loses in Scotland; or partnering with other firms for special projects.
Powles says the English option is being looked at. But at such an early phase of the competitive era he wants to focus on serving the core Scottish customer base and taking on the opposition – when it arrives.
"We set ourselves up for the rush of competition and it has been slow, but you cannot judge the success of the market on the number of competitors or on how many customers have switched," he says.
Powles was headhunted for the job after a career spent at a number of regulated businesses including Sealink, under the ownership of British Rail, and National Express, where he set up the hugely successful online retail division, Qjump. He spent 18 months as operations director at life company Aegon's independent financial advice business Origen and found the challenge of Business Stream fit with his fondness for being in at the start of something.
Since his arrival, he's set about trying to change the culture, aware that he inherited 130 staff with a public sector approach to the industry and many of them engaging with the competitive world for the first time. "There was a fear about what it was going to be like and whether their jobs were safe. But we seem to have got over that." He has brought in private sector hands from Scottish & Southern Energy, Standard Life, British Energy, Cap Gemini and Bupa, to add new skills that he hopes will rub off on the core staff.
Powles takes some satisfaction from the high ratings achieved in a staff engagement survey undertaken by Harris Interactive that shows how the staff are adapting to the new environment. "It tells me that people have made the transition and that we have made a good start," he says.
Powles still commutes weekly to his family home in Bishops Stortford, Hertfordshire and retains a link to his Birmingham roots through his support of Aston Villa football club. Otherwise, he's thrown himself fully into the day job and selling the message. His first act on opening the door to his office in Edinburgh's Fairmilehead is to offer a glass of water. Scottish tap water, of course, and he's quickly spouting the list of services that Business Stream will offer: network modelling, contingency planning, emergency cover, leak detection.
With firms facing cost pressures and requirements to meet environmental targets, he says the new regime's big advantage is being able to tailor a service to meet the individual customer, though for many, it's about providing a service that allows them to concentrate on their own business and run it more efficiently.
"For most business people water is just about taps and toilets," he says. "They just want us to make it simple for them."
This interview was featured on The Scotsman website.
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CO2 emissions up by nearly a fifth in 12 years
Thursday, July 03, 2008
Carbon dioxide emissions caused by UK consumers increased by almost a fifth between 1992 and 2004, research revealed today.
A study by the Stockholm Environment Institute at York University looked at the carbon footprint of all the goods and services consumed by British residents, including those imported from other countries. The research found the amount of carbon dioxide emissions associated with consumption in the UK increased by more than 115 million tonnes in that time, from 646.8 million tonnes to 762.4 million tonnes.
Emissions grew because of an overall increase in the amount of products being consumed and a shift from manufacturing in the UK to other countries where production involved a higher carbon output, such as China. The study counted emissions created through the production and transport of products such as televisions and clothing abroad, as well as goods and services produced in the UK and consumed here including gas and electricity. But it subtracted the carbon footprint of products manufactured here but exported for consumption abroad, to give a clear picture of the emissions associated with consumption in the UK.
While "territorial" emissions - those created in the UK and measured under the UN's Kyoto Protocol on reducing greenhouse gases - fell by 5% from 1992 to 2004, consumer-related emissions rose 18%. Consumption emissions were 37% higher than the territorial emissions in 2004, the study said. Thomas Wiedmann, research associate at the Stockholm Environment Institute at York University, said the study drew up the "total carbon footprint of UK consumers" and provided an insight into the global impacts of consumption in Britain.
"It gives support for the view that in an increasingly globalised market all economies need to play their part in reducing greenhouse gas emissions," he said. Dr Wiedmann said the study included, for example, the electricity needed to make clothes in China which were then exported to the UK for sale. Much of the time, that energy was more carbon intensive because countries such as China relied heavily on coal, he said.
The study, using a new modelling approach, was commissioned for the Department for Environment, Food and Rural Affairs. Environment Secretary Hilary Benn said: "Under international climate change agreements, we only have direct influence over our domestic emissions - and they are, and will remain, the basis for these commitments. "But as we accelerate the move to a low carbon economy, we must help business and individuals to understand and reduce the environmental impacts of the products and services they produce, sell or consume, wherever in the world they are made."
He added: "These findings reinforce the need for a global approach to tackling climate change, based on a carbon market that stimulates action and investment in clean energy and energy efficiency in all economies."
This story was featured on The Independent website.
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Growth in renewables bucks global slowdown
Thursday, July 03, 2008
Investment in renewable energy increased at a quickening pace last year in spite of the cooling in key economies.
Renewables and other forms of low-carbon energy bucked the economic slowdown, with nearly $150bn (€95bn, £75bn) invested in the technologies worldwide, according to a report from the United Nations Environment Programme.
Achim Steiner, executive director of UNEP, said: “[This] is a true cause for hope that rising concerns over climate change and energy prices are leading to a fundamental change in the way we produce and use energy.”
He said: “These figures show the finance sector’s forward view may be better at seeing the disruptive change of new technology.”
Last year’s total was an increase of 60 per cent on the previous year’s $93bn. The pace of growth was slightly higher than the 57 per cent increase in investment from $59bn in 2005.
Investment in low-carbon energy has risen more than fivefold since 2004, when it stood at $33.4bn globally.
The impact of the cooling economy was felt in early 2008, with fewer new public listings and the stock prices of sustainable energy companies down by about 18 per cent, according to the report, Global Trends in Sustainable Energy Investment 2008.
However, investors quickly recovered their nerve, probably under the influence of rising oil prices. Investment in low-carbon energy for the first half of 2008 was greater than in the first half of last year.
The report’s authors said this showed the sector was resilient to the slowdown elsewhere in the economy.
Europe took the lion’s share of renewables investment last year, followed by the US. But China, India and Brazil also saw an increasing share of investment.
This article was featured on the Financial Times Ltd. website.
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Investors bet on oil at $300 this year
Thursday, July 03, 2008
Investors are betting that the oil price could surge to $300 a barrel by the end of the year, according to data provided by the New York Mercantile Exchange, the world’s largest energy market.
Nymex statistics show that investors for the first time placed a small bet this week that West Texas Intermediate oil futures would hit $300 a barrel – more than double Tuesday’s price of about $142.50 a barrel – by December.Previously the highest bet was $275 a barrel and $200 remains the highest bet with significant investor interest.
At a cost of 18 cents each, investors bought 1,402 call options – contracts that give holders the right to buy crude oil at a predetermined price and date – that would be profitable only if oil prices trade above $300 a barrel in December.
Traders said that call options with prices well above current market quotes resembled “lottery tickets” although some noted that call options at $150 a barrel had also looked highly unlikely last year yet they are now almost profitable.
This article was featured on the Financial Times Limited website.
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Virgin rapped on broadband speeds
Thursday, July 03, 2008
A complaint lodged by BT about the speeds of Virgin Media's broadband service has been upheld by the Advertising Standards Authority.
The challenge centred on its advertisement Hate to Wait?, which ran in the national media and featured download times for songs and TV shows.
BT argued that Virgin's usage caps meant that downloads during peak times would be slower than advertised.
The ASA has agreed and ordered Virgin to make it clear that speeds will vary.
Confusing megabits
In its adjudication it said that the advert did not make it clear that customers on Virgin Media's lower speed packages would be able to download TV shows at the speeds advertised only during off-peak hours. It ruled that Virgin Media needed to clarify that download times would be restricted during peak hours.
Virgin Media argued that, for users of its M 2Mbps (megabits per second) package, a TV show downloaded during peak hours would take only a few minutes longer to download.
But it did admit that users would be subject to its so-called traffic management system, which caps data usage during peak hours.
It said that the issue would affect only users of the 2Mbps service.
Customers on its L 4Mbps package could download 60 songs and/or two TV shows before reaching caps while those on the XL 20Mbps package could download 614 songs or nine TV shows before their speeds would be subject to caps, Virgin said.
"We believe our Hate to Wait? campaign provided a simple and transparent comparison between broadband speeds for consumers looking to choose between Virgin Media's M, L and XL broadband packages," Virgin Media said in a statement.
On a secondary issue, Virgin admitted that it wrongly used the term "megabits" when referring to the size of the files being downloaded and agreed to change it to the correct "megabytes" term.
It also agreed to amend the ad to reflect the fact that it would take some customers longer to download a TV show than stated.
Very competitive
The issue of so-called traffic throttling, where internet service providers place limits on the amount of data users can download, has become more pertinent with the growth of video-sharing sites and TV catch-up services such as the iPlayer.
In the US some providers are banning access to file-sharing via programs such as BitTorrent and in the UK the British Phonographic Industry (BPI) is in talks with providers, including Virgin Media, about banning heavy users of file-sharing sites.
"ISPs are responding to the growth of online video services and capping is also a way of migrating customers onto faster and more expensive tariffs," said James Garlick, analyst with Screen Digest.
Virgin Media believes traffic-throttling is vital to ensure a good service.
"Our traffic management policy helps ensure the majority of customers receive the quality of service they expect from our fibre-optic broadband product by managing demand from the heaviest users at certain times of the day," said a spokesman for Virgin Media.
The broadband arena in the UK has become hugely competitive and the ASA has received a steady stream of complaints, sometimes from consumers but often from rival providers, about the speeds of both fixed and mobile broadband.
"There are lots of factors which affect speed. Consumers are concerned about it but often it is competitors keeping an eye on each other," said a spokesman from the ASA.
This story was featured on the BBC News website.
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Scottish Power signs biggest Scots coal deal for Longannet
Thursday, July 03, 2008
Scottish Power and Scottish Coal today unveil the largest coal contract in Scottish history, in a move that could create more than 100 jobs.
Under the five-year deal, likely to be worth up to £700 million, Scottish Coal will supply fuel to ScottishPower's Longannet power station in Fife.
The amount of coal to be supplied will depend on the demand for electricity but it is understood it could be two million tonnes per year.
Scottish Coal operates nine opencast mines across the central belt and plans to bring its mothballed Broken Cross site, in South Lanarkshire, back into operation to cope with the demand. The firm said it already had planning permission to extend the existing mines.
Scottish Coal currently mines about four million tonnes a year. It supplies other power companies, including British Energy, Drax Power and Eon.
ScottishPower burns between four and six million tonnes of coal a year at Longannet and Cockenzie power station, in East Lothian.
The company said it was able to use Scottish coal at its Longannet station following a £170m refit. The station's flue gas desulphurisation equipment, installed this year, will remove 98 per cent of the sulphur dioxide from the emissions of three of its four power units.
ScottishPower said it had previously imported foreign coal because of the high sulphur content of the Scottish fuel.
The utility giant added it "constantly reviewed" its coal supply contracts and that Scottish Coal had secured the new deal following months of discussions.
Ignacio Galán, chief executive of Iberdrola, ScottishPower's Spanish owner, said: "Coal generation has a significant contribution to the security of electricity supply in the UK. At the same time, Iberdrola is committed to developing the best technologies that will deliver low-carbon generation in this country."
This week, a consortium led by ScottishPower entered the UK government's competition to develop the UK's first commercial scale carbon capture and storage project.
Brian Staples, deputy chairman of Scottish Resources Group, which owns Scottish Coal, said: "The coal we will supply is all mined in Scotland, and it will displace an equivalent amount of imported coal, to the benefit of Scottish employment and the Scottish economy.
"Scottish Coal will increase output to meet the tonnage requirements of the contract, which, in addition to protecting existing jobs, will create in excess of 100 new jobs."
First Minister Alex Salmond said: "The announcement that coal is to supply one of Scotland's major companies is a declaration of faith in coal as one of Scotland's key indigenous fuels and shows that coal is a fuel of the future and not the past."
Details of today's contract came as Scottish Resources Group appointed Seán Mahon as its new non-executive group chairman.
This story was featured on The Scotsman website.
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ScottishPower signs biggest Scots coal deal for Longannet
Thursday, July 03, 2008
Scottish Power and Scottish Coal today unveil the largest coal contract in Scottish history, in a move that could create more than 100 jobs.
Under the five-year deal, likely to be worth up to £700 million, Scottish Coal will supply fuel to ScottishPower's Longannet power station in Fife.
The amount of coal to be supplied will depend on the demand for electricity but it is understood it could be two million tonnes per year.
Scottish Coal operates nine opencast mines across the central belt and plans to bring its mothballed Broken Cross site, in South Lanarkshire, back into operation to cope with the demand. The firm said it already had planning permission to extend the existing mines.
Scottish Coal currently mines about four million tonnes a year. It supplies other power companies, including British Energy, Drax Power and Eon.
ScottishPower burns between four and six million tonnes of coal a year at Longannet and Cockenzie power station, in East Lothian.
The company said it was able to use Scottish coal at its Longannet station following a £170m refit. The station's flue gas desulphurisation equipment, installed this year, will remove 98 per cent of the sulphur dioxide from the emissions of three of its four power units.
ScottishPower said it had previously imported foreign coal because of the high sulphur content of the Scottish fuel.
The utility giant added it "constantly reviewed" its coal supply contracts and that Scottish Coal had secured the new deal following months of discussions.
Ignacio Galán, chief executive of Iberdrola, ScottishPower's Spanish owner, said: "Coal generation has a significant contribution to the security of electricity supply in the UK. At the same time, Iberdrola is committed to developing the best technologies that will deliver low-carbon generation in this country."
This week, a consortium led by ScottishPower entered the UK government's competition to develop the UK's first commercial scale carbon capture and storage project.
Brian Staples, deputy chairman of Scottish Resources Group, which owns Scottish Coal, said: "The coal we will supply is all mined in Scotland, and it will displace an equivalent amount of imported coal, to the benefit of Scottish employment and the Scottish economy.
"Scottish Coal will increase output to meet the tonnage requirements of the contract, which, in addition to protecting existing jobs, will create in excess of 100 new jobs."
First Minister Alex Salmond said: "The announcement that coal is to supply one of Scotland's major companies is a declaration of faith in coal as one of Scotland's key indigenous fuels and shows that coal is a fuel of the future and not the past."
Details of today's contract came as Scottish Resources Group appointed Seán Mahon as its new non-executive group chairman.
This story was featured on The Scotsman website.
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