What smart meters will do for you

Thursday, April 30, 2009

A revolution in the way you think about and use energy in your home is about to get underway.

The government is poised to announce how it intends to roll out electricity and gas smart meters to every household in the UK by 2020.

Calling this a revolution may seem overly dramatic.

However, this will be the impact of the transfer from existing "dumb" meters to new, smarter alternatives.

Quite simply, keeping your existing meters is like sending a telegram instead of installing wireless broadband.

The government, along with the energy industry, is now involved in devising the best way of getting this massive project underway to replace 46 million meters - in 25 million British homes - by the year 2020.

This is a huge undertaking, ranking alongside the digital switch-over and the introduction of North Sea gas to homes in the early 1970s.

So what are smart meters?

Smart meters are fundamentally different from ordinary gas and electricity meters.

They provide a real-time, accurate, record of the gas and electricity you are using, day and night, and how much it costs.

Crucially, your new smart meter will include a display device that will tell you how much energy you are using at any given time, and how much it is costing you - and even how much carbon that equates to.

This display will put you in total control of your energy use - which is vital when more and more of us are becoming more energy efficient on financial and environmental grounds.

Some display devices even incorporate a red, amber and green traffic light system that shows you clearly how your usage changes when you turn various appliances on and off.

You will be able to see how much energy you used the day before, the week before and even the year before, and how your consumption changes in real time.

Smart meters will also make it easier for people who generate their own energy to measure how much they are exporting back to the national grid.

No more estimated bills

This new technology will also spell the end of estimated bills and meter readings.

With smart metering, electricity and gas bills will be accurate.

There will not be any need for your energy company to estimate your consumption as the smart meter can tell the supplier how much energy is being used and when.

Smart meters also provide an exchange of information between you and your energy company.

This means the company will be able to communicate directly with you and enable you to receive up-to-date readings from the meter without having to send someone out to your home.

This interactivity also means energy companies can send messages to your smart meter and, where required, instantly update products such as energy tariffs at your request.

Paving the way for innovation

As well as helping all of us save money, smart meters will also pave the way for a number of innovations aimed at saving energy.

For example, using the information from your meter, new tariffs could be offered encouraging off-peak energy use.

The meter would also be capable of providing information on which appliances you use most, allowing companies to subsequently offer energy saving tips via the meter and its display device.

In the future, it is possible that smart meters could link up with other household appliances - for example freezers, washing machines, kettles.

You could time their operation to take advantage of cheaper off-peak tariffs - again saving you money, while simultaneously reducing your carbon footprint.

Energy companies are already legally required to reduce the amount of carbon they produce and smart meters will help their customers contribute to the wider effort.

Maintaining momentum

The potential benefits of smart metering are clear.

Britain is no longer self-sufficient in terms of energy and supplies of North Sea oil and gas are depleting.

Smart meters have to be part of the solution to the problem of drastically reducing our energy consumption.

Momentum is gathering towards making smart meters a reality for all of us by 2020.

It is important that this momentum is not lost, as it is in our power to make a real change in the way we all use our vital resources.

This story was featured on the BBC News Website.

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Thursday, April 30, 2009

Stormwater in urban areas can have negative effects on both the quantity and quality of surface- and ground-waters. Biofiltration systems are a popular form of water treatment, but information on their performance with stormwater is limited to laboratory studies.

This research is the first to evaluate three biofiltration systems in practice. Biofiltration systems (otherwise known as biofilters, bio retention systems and rain gardens) clean water by filtering diverted runoff through dense vegetation and layers of natural substances, such as sandy soil, compost or shredded hardwood.

Biofilters are popular for their ability to reduce flood peaks and remove pollutants. They also have a small spatial footprint and can be landscaped into the surrounding area. The EU Floods Directive1 aims to reduce the risks posed by floods and one of the main goals of the Water Framework Directive2 is to clean up Europe's waters. Successful biofiltration systems could help member states with both these initiatives.

The research evaluates the effectiveness of three field-scale biofiltration systems. Flood conditions were simulated and the researchers recorded the ability of the systems to reduce run-off flow rates, to retain water and to remove pollutants. Pollutants included heavy metals such as zinc, copper and lead and nutrients such as phosphorus and nitrogen. Nutrients are detrimental to water quality in large quantities.

Biofilters were shown to effectively reduce peak runoff flow rates by at least 80 per cent. They were also shown to reduce runoff volumes by 33 per cent on average. It is important to note that this result was for a lined system, where water cannot filter into to surrounding soils - reductions in runoff volumes are likely to be higher for unlined systems. The study also demonstrated that vegetation is important for maintaining the amount of water that could pass through the system (hydraulic capacity), because roots help prevent the compacting and clogging of the filter material whether it is soil, compost, sand etc. However, the data indicated that the better the filter at maintaining water flow, the higher the concentration of some pollutants. Therefore there may be a trade-off between hydraulic capacity and pollutant removal.

Suspended solids and heavy metals were effectively removed in all filter designs, with reductions generally in excess of 90 per cent. In contrast, removal of nutrients such as phosphorus and nitrogen was variable, and ranged from consistent leaching to reliable removal, depending on the design. On the basis of their results the researchers suggested that a filter with a low phosphorus content itself would be more effective at removing phosphorus pollution. The removal of nitrogen, however, is more difficult because it is highly soluble and influenced by the wetting and drying regime of the biofilter operation.

By studying the biofilters at work, the study demonstrates their effectiveness but also indicates that the choice of design depends on the site and the target pollutants. It should be noted that biofilters are generally only designed to manage small to medium sized floods and the research was designed to simulate this type of rainfall event.

This story was featured on the Enviromental Expert Website.

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National Grid loses fine fight

Thursday, April 30, 2009

National Grid said it was considering its legal options after failing to overturn a record fine for breaching competition rules in its UK gas metering business.

The Competition Appeal Tribunal yesterday shaved more than a quarter off the company's original penalty of £41.6m, ruling that £30m was a more appropriate fine level.

However, it backed an earlier regulatory finding that National Grid's long-term, exclusive metering contracts with energy suppliers restricted competition and harmed consumer choice.

National Grid, which transmits and distributes gas and electricity, inherited a gas metering market monopoly when it bought Transco, owner of the gas transmission network, in 2002.

National Grid spent two years renegotiating contracts with gas suppliers.

"We continue to believe that our gas metering contracts have not harmed consumers, competition or gas suppliers," said Mark Fairbairn, National Grid executive director. "We will now thoroughly review the judgment and consider our next steps."

This story was featured on The Financial Times Website.

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World's first solar powered city planned for Florida

Thursday, April 30, 2009

An ambitious US plan to develop what is being dubbed the world's first totally solar-powered city has run into immediate problems.

Florida's Republican controlled legislature is playing hardball with a comprehensive energy bill that utility firm Florida Power and Light (FPL) says is required for it to start work on a 75MW solar farm array at Babcock Ranch in the south west of the state.

The developer of Babcock Ranch, Sydney Kitson, said he wanted to start building the 20,000 home city in June but is worried the political wrangling will cause problems for the project, such as backtracking by light-industrial companies which were planning to relocate to the area.

FPL said the array will cost around $400m (£269m) and while it is is expected to access a number of tax breaks and receive 30 per cent of the funding from President Obama's stimulus plan, the company is pressuring Florida state politicians for further incentives.

Typically Florida Republicans kowtow to big business but, according to some observers they are finding it difficult to abandon their climate-sceptic roots and are reluctant to be seen to push the President’s alternative energy agenda.

According to Kitson, Babcock Ranch is intended to be one of the world's greenest developments, and if the project proceeds it could one day be home to the world's largest solar photovoltaic power plant.

Under the plans, the solar panels will sit on 350 acres within the city, providing the city with all its electricity needs. More than half of Babcock’s 17,000 acres will permanently remain greenways and open space, Kitson added, while the city will also adjoin the 73,000-acre Babcock Ranch Preserve that has been purchased by the state.

Babcock will also feature sustainable water management and conservation technologies; street lamps designed to reduce light pollution; electric car chargers; and green roofs that reduce energy loss.

While environmentalists have generally welcomed the plan, some detractors have questioned whether the local area, which was shockingly overbuilt during the recent housing bubble, can sustain another city.

This story was featured on the Bussiness Green Website.

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CO2 reduction ‘not a business priority’ in face of unrealistic targets and financial pressures

Wednesday, April 29, 2009

More than eight out of ten businesses say Government targets to reduce CO2 emissions are unrealistic, while significant numbers do not see the benefit of a small carbon footprint and are relegating carbon reduction measures to concentrate on managing costs.

These are among the findings of npower’s Business Energy Index (nBEI), an annual report tracking business opinion on energy use and carbon emissions, published today.

In this latest index the majority of businesses (83%) said the target to reduce CO2 emissions by 80% by 2050 was unrealistic. Attitudes on the potential commercial opportunities of a small carbon footprint are equally downbeat; only 31% think new business will occur as a result of reducing emissions, compared to 47% in npower’s 2008 index.

The findings also reveal that the economic downturn is leading businesses to prioritise finances over CO2 reduction; 97% said they are currently more concerned with reducing costs than emissions.

Businesses believe it is still important for the UK to take a leading role in reducing global emissions with 68% confirming this. This is a drop from the 2008 index in which 88% of businesses backed the Government’s emission reduction plans.

Despite these opinions the Index reveals a renewed focus on energy efficiency measures, with the importance attached to energy efficiency at its highest level since 2005. Furthermore 80% of businesses say they are likely to increase energy efficiency initiatives, and while this was primarily for cost benefit, the same measures would also lead to emission reduction.

Energy efficiency was also rated as the most popular action for businesses to take to reduce emissions, with 43% giving this answer ahead of changing processes (22%) or switching to a green tariff (18%). However, the Index suggests that more needs to be done to support businesses; 51% said they thought the Government did not offer useful advice on the issues of carbon reduction and energy efficiency.

Julia Lynch-Williams, director of energy services at npower, said:

“The Index shows that most businesses do not see the commercial benefits from having a small carbon footprint, but we can’t escape the fact that climate change legislation and the strength of public feeling mean CO2 reduction remains important. The Government has set the UK on a path toward a low carbon economy and must now continue to stress to businesses the opportunities that will come from low carbon operations.

“Energy efficiency is an excellent way to save money and it’s encouraging that many businesses are looking at this to reduce costs. While it’s understandable that businesses are more focused on the bottom-line in the current economic crisis, we would encourage them to see energy management as an effective means of reducing emissions as well as costs.

“Our advice to businesses is to make energy efficiency a priority now and in the long term.”

This story was featured on The NPower Website.

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Water firms bailed out

Sunday, April 26, 2009

THREE of Britain’s biggest water companies have received emergency cash injections from their buyout backers to keep them from breaching debt agreements.

Southern Water, Anglian Water and South East Water were bought in debt-fuelled deals totalling more than £7 billion at the top of the private equity boom in 2006.

The economy’s slowdown put them at risk of breaching loan terms as the value of their assets, linked to the Retail Prices Index (RPI) fell.

The firms have received, respectively, £85m, £115m, and £15m in the past month.

The cash calls are another setback for the buyout and infrastructure firms that paid huge prices to get into the sector but are now short on cash themselves.

These include troubled private-equity company 3i, part of the consortium behind Anglian. Swiss bank UBS and Vincent Tchenguiz’s Consensus Business Group backed Southern Water. Hastings, an Australian infrastructure investor, bought South East Water.

Water company assets are valued every March using several factors including RPI. Last month the RPI fell to -0.4% from a 5.5% high in September, leading to a jump in the levels of debt relative to the cheaper assets.

This story was featured on The Times Website.

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Gas battle looming

Sunday, April 26, 2009

CENTRICA could be drawn into a billion-pound bidding war for the North Sea’s biggest independent gas group after it emerged that three continental utilities are in talks with Venture Production about potential spoiler offers.

Venture’s bankers at Rothschild have been trying to attract a white knight since Centrica bought 22% of the company in a stock-market raid last month.

It is understood that RWE, the German giant, and Sweden’s Vattenfall have been invited to bid and are poring over Venture’s books in preparation for offers for the £1.2 billion company.

Dong Energy, the Danish state-owned firm, hired Morgan Stanley for a bid but is now thought to have cooled on the idea because of Venture’s high asking price.

Mike Wagstaff, Venture’s chief executive, is holding out for more than the 725p a share that Centrica paid.

Dong boss Anders Eldrup declined to comment, but said Britain was “very attractive” and that he had investor blessing to raise the group’s gearing levels by up to £2 billion for acquisitions.

When you look at the UK five to ten years ahead, there is a mismatch between supply and demand because many facilities are quite old and need to be replaced,” he said.

“We hope to play a significant role in the rebuilding of capacity in the UK.”

This story was featured The Times Website.

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Government backs electricity grid revamp

Saturday, April 25, 2009

A proposed £4.7bn ($6.7bn) investment in the electricity grid to connect up new wind farms and nuclear power stations has been backed by the government, which hailed the plan as a big opportunity that would support employment.

The proposals include two large new undersea cables running off the east and west coasts to bring electricity from Scotland to England.

But most of the money will not be spent until 2012 at the earliest, according to the energy regulator, and environmental groups complained that progress in modernising the grid to take more renewable energy was still too slow.

The blueprint for grid investment was drawn up by a joint group backed by the government, the industry, and Ofgem, the energy regulator. It marks a break with the previous policy, under which the regulator would sanction investment to connect up a location only if there were a firm plan for new generation capacity to be built there.

The new model, which has been proposed by Ofgem but not yet adopted, would allow the electricity network companies to invest in grid connections for areas where they expect new power stations or wind farms to be built. This approach, known as “anticipatory investment”, has long been urged by the renewable energy industry, which has argued that problems in securing grid connections are one of the greatest obstacles to investment in wind power.

The £4.7bn of extra investment was proposed by the government-backed Electricity Networks Strategy Group as necessary by 2020 to hit the European target that 15 per cent of Britain’s energy should come from renewable sources by 2015.

It would also allow connections for the nuclear power stations that by the end of the next decade are expected to be either completed or under construction at Sizewell in Suffolk, Hinkley Point in Somerset and Wylfa on Anglesey. The money would be spent by National Grid, which owns the electricity transmission network in England and Wales, and by ScottishPower and Scottish and Southern Energy, which own the network in Scotland.

An ambitious part of the plan is the £1.5bn proposal for the undersea cables, which would bring electricity to customers in England from wind farms offshore and onshore in Scotland.

Mike O’Brien, the energy minister, said there was an “urgent” need to bring down the barriers to connecting up new renewable and nuclear energy to the grid.

“There’s an aggressive timetable to meet and I want this report to galvanise the necessary action right across the energy sector,” he said.

Friends of the Earth, the environmental campaign group, welcomed the planned investment, but Andy Atkins, its executive director, added: “The government must now show that it has the bold political vision to make it a reality.”

This story was featured on The Financial Times Website.

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Call to shake-up water industry

Thursday, April 23, 2009

A radical shake-up of the water industry could be set in motion if government accepts recommendations to overhaul the distribution, regulation and consumption of water in the UK, writes William MacNamara .

The government- commissioned Cave Report targets the UK's 21 regional water monopolies, claiming they will meet the demands of the population only if competition is introduced.

The report calls for businesses to be able to choose among water and wastewater retailers, instead of relying on the local incumbent with its Office of Water-sanctioned prices. "These measures will allow many non-household customers to choose the combination of service and price they prefer," the report says.

In addition, the conditions for mergers between companies should be relaxed, the report advocates, to encourage consolidation among providers. While mergers are, in effect, discouraged between water companies with annual revenues above £10m, that threshold should be raised to £70m.

"The introduction of market forces could drive companies to share water resources, limiting the need for new assets, keeping bills down and reducing any impacts on the environment," it adds.

The report, lead by Prof Martin Cave, puts the price tag of its recommendations at £2.5bn.

This story was first featured on The FT Website

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UK gives green light to coal-fired power stations

Thursday, April 23, 2009

Britain gave a green light to the construction of up to four coal-fired power stations, but insisted that developers offer a guarantee to bury some of their carbon emissions underground.

The scheme, which will be paid for through a levy of up to 2 per cent on the household bills paid by all 26 million households in the UK, represents a significant shot in the arm for British hopes of mastering carbon capture and storage (CCS) technology, which advocates say will play a critical role in efforts to tackle climate change.

“I believe that we need to signal a move away from the building of unabated coal-fired power stations, because it is right for our country to drive us towards low carbon as part of a progressive decarbonisation,” Ed Miliband, the Energy and Climate Change Secretary, said.

He said that the project, which will see coal-fired stations built at Kingsnorth, in Kent, Hatfield, near Doncaster, and two other sites, was “the most environmentally ambitious of any country in the world”.

CCS, by which the carbon emitted from burning fossil fuels is stripped out using chemical scrubbers and piped for storage in old gasfields beneath the seabed, remains an unproven technology at commercial scale and has only ever been demonstrated at pilot plants generating 30 megawatts of electricity.

But under the terms of the scheme, power companies would have to apply CCS to 400 MW of power production, or a quarter to half of a typical coal plant, and would have to fit it to their entire output by 2025.

The inclusion of the CCS technology is expected to add about $1 billion (£685 million) to the cost of building each coal power station.

Mr Miliband said that the first plant could be operational by 2015.

Green goups welcomed the announcement.

“At last Ed Miliband is demonstrating welcome signs of climate leadership in the face of resistance from Whitehall officials and Cabinet colleagues,” John Sauven, the executive director of Greenpeace, said.

“He is the first minister in 12 years to throw down the gauntlet to the energy companies and demand they start taking climate change seriously.”

Matthew Lockwood, Senior Research Fellow at the Institute for Public Policy Research, said: "The Government has now stepped up to the mark on coal. The ban on new , unabated coal-fired power stations is the most important UK climate policy we have seen so far.”

But critics said the announcement was long overdue and others questioned how the scheme would be funded.

This story was featured on The Times Website

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Budget 2009: Darling gives renewables a £5bn shot in the arm

Wednesday, April 22, 2009

The renewable power industry has been given a shot in the arm after Alistair Darling's budget announced over £5bn worth of new funding to hasten an offshore wind revolution and kick-start solar.

But there are concerns that oil and even nuclear were being given help and the British Wind Energy Association (BWEA) warned that other important obstacles, such as electrical grid connections and planning delays, remained for wind schemes.

Around £525m is to be pumped into the sector between 2011 and 2014 through the government temporarily raising subsidies for offshore wind projects from a current Renewables Obligation Certificates (ROC) banding level of 1.5 to 2.0.

A further £405m is promised "to support the development of a world leading low-carbon energy and green manufacturing sector in the UK" - something that should specifically benefit wind and tidal power.

And £4bn of new capital is to be injected by the European Investment Bank, which is owned by European Union member states but raises its money on the public capital markets. This will help green schemes overcome a serious lack of project money available from commercial banks which have become risk averse due to the credit crunch, said industry experts.

"They have given us what we asked for so it must give this a thumbs up," said BWEA spokesman, Charles Anglin. "But we are still faced with a £10bn to £15bn cost of an offshore grid, a cost that needs to be accepted as a social cost and spread across all users including coal and nuclear. There is also the need for changes in the planning system which remain unaddressed," he added.

Derry Newman, the chief executive of photovoltaic installer Solar Century, said an additional £45m for the Low Carbon Buildings Programme should end the current suspension of solar grant applications and enable the sector to plan with confidence for the launch of the feed-in tariff in April 2010.

"The Treasury is to be congratulated for recognising the important contribution that technologies such as solar PV can make to delivering a low-carbon Britain. We look forward to working with the Department for Energy to ensure that the current hiatus in solar PV support is lifted urgently," he argued.

John Sauven, the executive director of Greenpeace, said the European bank money and the various government initiatives should begin to unlock some of the 8GW of wind power that has secured planning permission but has not yet been built. "E.ON and its partners should now give an immediate green light to the proposed London array, which if built will be the largest offshore wind farm in Europe," he added.

The government also pledged £750m strategic investment fund for backing business with £250m steered towards low-carbon business opportunities and innovation.

"This will include initiatives on low-carbon vehicles, as well as the nuclear and renewable energy industries," it said in a formal statement which raised questions from environmental consultant, David Lowry, about whether this was a small but significant breach of its promise not to give any kind of subsidies to the atomic power sector.

Doug Parr, the chief scientist at Greenpeace, said: "Nuclear has had 50 years to get its act together. It should not need more money and this is cash that could and should have all all gone to renewables."

The government also frustrated green activists but delighted the oil industry by giving tax breaks to smaller North Sea fields with the aim of bringing 2m extra barrels of crude into production.

This story was featured on The Guardian Website.

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Cave Review of water markets publishes final report

Wednesday, April 22, 2009

The final report by Professor Martin Cave into competition and innovation in water markets has been published. The report sets out the challenges and opportunities facing the industry.

It also recommends measures for increasing competition and innovation to benefit customers and the economy by up to £2.5 billion over 30 years and deliver considerable environmental and service improvements.

The Review recommends that: after an initial threshold of five megalitres, the Government should allow all non-household customers (1.5 million in England and 110,000 in Wales) to choose their water and wastewater retailer. The retail divisions of water companies should be made legally independent from their network business, except in the case of the smallest companies where it would not be in customers' interests to do so;

- the Government should give the Environment Agency new powers to tackle over-abstraction and to facilitate the trading of abstraction and discharge licences. Licence conditions should also be reformed to take greater account of the impacts of abstractions and discharges on the environment;

- the Government should reform the special merger regime to allow mergers where these would be in the customer's interest. Retail only mergers should be removed from the regime. For other mergers, the threshold should be raised to £70 million. In the first instance, mergers above this level should be referred to the Office of Fair Trading. To give the industry greater certainty, Ofwat should publish a transparent methodology for assessing mergers. Ofwat should also commission an independent review of the scope for using alternative data sources and statistical techniques;

- the Government and Ofwat (with a duty to support innovation), together with other stakeholders, should establish a research and development body to agree priorities and coordinate action. The body would be supported by funding from the industry and customers;

- Ofwat should give customers and their representatives a greater role in determining the services provided by their water company through 'negotiated settlements;'

- water companies should have an obligation to ensure they supply customers at best-value and Ofwat should enforce this obligation. The Government should reduce barriers to entry into the market and ensure that alternative suppliers are able to earn a return for the services they provide;

- Ofwat should encourage greater innovation by increasing the incentives for outperformance and addressing the potential bias to capital expenditure. The Government and regulators should also ensure that they give the water industry timely and consistent signals about the outcomes required; and

- Ofwat should modernise and streamline the regime of inset appointments. There should be regulated access and supply frameworks, that are binding on participants. Charges should also ensure that efficient companies are able to cover their costs. These recommendations aim to reduce costs and increase service levels for all customers; support the more efficient use of water; and help companies to better meet the challenges facing the industry including climate change, population growth, containing costs, rising consumer expectations, and water efficiency.

Launching the final report, Professor Martin Cave said:

'The industry has achieved a great deal in the last 20 years, but climate change and population growth represents real challenges to the current structure of the water sector - challenges that the industry must meet. Extending competition and supporting innovation will allow the sector to better meet these demands and deliver real benefits for customers and the environment through lower prices, more choice, higher service levels and the better use of water. These changes could benefit the economy by £2.5 billion over 30 years.'

This story was featured on The Enviromental-Expert Website.

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Price floor needed to justify cost of CO2 capture

Monday, April 20, 2009

What could persuade you to pay billions of dollars to build a refinery twice as big as Wembley Stadium to extract a gas of value to no one and then have it put it in a hole below the North Sea?

This is what the Government is asking Britain's utilities to do. Unsurprisingly, they are shuffling their feet. The technology to extract CO2 from power station flues and from the original fuel (coal, coke or natural gas) is proven, but no one has done it on a scale to decarbonise a 2,000 megawatt electricity generator.

Costs spin out of control in first attempts, but the problem is greater because we are asking power companies to add cost for no return. Carbon capture and storage (CCS) is commercial nonsense, but government has decreed that CO2 has a value - not a positive one (it is a mainly useless gas) but negative. Power companies fear that if they build fossil-fuel power plants without CCS, they will soon be punished. Businesses can work with negative value, but must know the potential harm. They want to see the carbon price that must be paid. Otherwise, carbon is another wild variable, like oil prices, and even worse because it is political.

A carbon price floor, a tax or a mandate to buy CCS-abated electricity, is the answer and it is interesting that companies are now seeking competitive advantage; National Grid wants to ship CO2; BP is pitching itself as a hydrogen supplier and CO2 storer. The ball is in the Government's court.

This story was featured on The Times Website.

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EU may take UK to court over Phorm

Wednesday, April 15, 2009

The European Commission is said to be taking legal action against the UK government over the alleged breach of data protection under EU law.

This has come about through the problems created by BT and the targeted web advertising company Phorm, when they conducted secret trails of the system on BT’s own customers.

It is believed that the EU Telecoms Commissioner, Viviane Reding, will be calling for the UK law to be changed, to make sure that confidential communications are provided by not allow the interception and surveillance of such data without the user’s consent.

This move follows months of communications between the UK government and the EU, yet it seems that the UK government was not able to answer the questions fully and the commission is concerned that there is not an independent body to deal with interceptions.

This story was featured on The Techwatch Website

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Water scarcity and future business risks

Wednesday, April 15, 2009

With the deepening global recession dominating the world’s headlines, concerns are growing that the looming threat of resource scarcity is being overlooked at a time when it too demands an urgent response from governments and businesses.

In the same way that credit bubbles burst to spark the financial crisis, ‘water bubbles’ that have fuelled economic growth in particular regions in the past 50 years are also set to explode, warned the World Economic Forum (WEF).

The consequences may be no less severe, the WEF cautioned. “Worsening water security will soon tear into various parts of the global economic system,” it stated in a recent report.

“We are now on the verge of water bankruptcy in many places with no way of paying the debt back … The consequences for regional economic and political stability will be serious.”

Water bankruptcy

Increasing shortages of water in the coming years are likely to threaten national and regional security, economic growth, global trade, energy and food production, warn experts.

Professor Sir John Beddington, the UK Government’s Chief Scientific Adviser warned in a speech last month of a ‘perfect storm’ around 2030 created by increasing shortages of food, water and energy supplies that could trigger public unrest, conflict between states and mass migration.

It may seem strange that water scarcity is becoming an increasingly big problem when water covers three-quarters of the world’s surface, but the vast majority of this is undrinkable.

Available water

Less than 3% of the world’s water is fresh, while a much smaller amount than that is actually available for human consumption as much of it is locked in glaciers and ice caps.

By 2030, almost half the world’s population will live in areas of high water stress, due to a combination of climate change, population growth as well as rising demand for food, energy and biofuels, stated a report by the United Nations published in March.

Even when the world’s population peaks around 2050 at about 9 billion the demand for water will continue to grow because of an increasing demand for it from world agriculture due to changing diets.

How is water used?

Already around 70% of global water use is in agriculture. That is only likely to grow, for as people become richer their consumption of meat, grains and milk increases—all of which require substantial water to grow.

If we continue as we are today there will not be enough water to grow the food needed to meet the population growth and changing diet demand, says the WEF.

It predicts that 55% of the world’s population will be dependent on food imports as a result of insufficient domestic water by 2030.

The demand for energy is also set to further squeeze our precious water supplies. Energy production accounts for about 39% of all water withdrawals in the United States and 31% in the European Union.

With energy production forecast to grow in both regions by about 50% over the next two decades, water consumption for energy production is set to more than double over the same period.

There will also be rapid energy growth in the non-OECD countries, especially across Asia, which will have a big impact on water resources.

Choosing between ‘good’ energy and water

Meanwhile, plans to switch from petrol to electricity or biofuels in an attempt to solve some serious problems, namely energy security or climate change, will aggravate an even more serious problem—acute water shortages.

All of this will have far-reaching repercussions on businesses in the coming years.

Water stress is becoming an increasing issue for water-intensive businesses such as those in the power, mining, food and beverage and semi-conductor sectors, which could have knock-on effects to other parts of the economy.

The WEF raises the question of whether companies may relocate to resource-rich countries in the same way as many firms have moved their manufacturing bases to countries that pay lower wages.

Emerging risks

But other industries may not be fully aware of the risks that increasing resource scarcity may present in future decades.

The risk of business interruption may rise, if a company’s supply chain breaks down, for example, because of energy shortages due to drought conditions.

As water becomes an increasingly politically and socially sensitive issue, a firm’s reputation could be damaged if it were found to use excessive amounts of water or to be polluting precious water supplies.

Regulatory risk may also increase as governments step in to supervise water use, while a company’s water management strategy could affect its access to capital, just as firms’ output of greenhouse gases is becoming a bigger concern for institutional investors.

Opportunity to act

But the current global economic downturn offers an opportunity to start tackling the impending water crisis, says the WEF.

The actions taken to remedy the global financial crisis provide something of a template for tackling the water crisis.

Governments have realised that the status quo will not deliver the solutions required to the global financial problems. Instead, they have sought to broker agreements with social, civic and business groups and other states to kick start their economies out of recession.

A similar consensual approach is needed to address the growing water crisis, because the world simply cannot carry on using water in the same way as it has in the past, say experts.

“Now, when a suite of reforms is required to fix systemic problems in the economic system, is the perfect time to start the water reform dialogue,” says the WEF.

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New Proposal To Beef Up Protection For Small Business Customers

Wednesday, April 15, 2009

Energy regulator Ofgem has today (Wednesday) unveiled proposals to give small businesses better protection in the energy market.

The proposals are part of reforms Ofgem will introduce following its energy supply probe. They are aimed at micro-businesses – companies that have fewer than ten employees or one of a number of other characteristics. The proposals include a ban on the automatic roll-over of fixed-term contracts which has resulted in some businesses being locked, without being aware, into unfavourable long-term contracts.
Other key provisions are:

a proposal to work with Consumer Focus to widen its switching website accreditation scheme to cover sites which compare business energy deals;

new standards for business contracts meaning suppliers must provide, in writing, a full copy of contract terms and conditions each time a customer signs, and they must highlight key terms and conditions such as the availability of any cooling-off periods;

and recommendations that energy brokers and advisors develop existing or new codes of practice with guidance from the Office of Fair Trading and ensure that accredited brokers explain to customers how they are funded and which suppliers are covered by their services.


Ofgem Chief Executive, Alistair Buchanan, said:”Our investigation showed that small businesses are being woefully served by energy suppliers. This has to change. We anticipate that the package of measures we want to introduce will improve business customers’ ability to engage effectively in the market.”


Ofgem’s proposals are part of a package of remedies to improve the experience of domestic and business customers in the energy market. Today’s proposals include other measures that Ofgem wants to introduce to improve protection for household customers. Alongside today’s proposals, Ofgem is amid consultation with stakeholders on the drafting of licence conditions to ban unjustified price differences between payment methods for domestic bills.


Stakeholders will have until the end of May to respond to the package of the proposals announced today. Ofgem aims to have all the rule changes in place for domestic and business customers for this autumn.


Notes to Editors


1. Micro-businesses:

A micro-business is defined as including businesses that employ fewer than ten people; or which use less than 200,000 kWh of gas a year or 55,000 kWh of electricity a year; or which have an annual turnover of less than 2 million euros. Ofgem is focusing its remedies to protect businesses on these companies because our estimate is that up to 70 per cent of all small and medium-sized businesses are micro-businesses. This is also consistent with the protection given to micro-businesses through the complaint handling standards which Ofgem has set for energy companies in accordance with the requirements of the Consumers, Estate Agents and Redress Act.
Suppliers should provide customers with advanced notification that their existing fixed-term agreement is about to expire. At this time, suppliers should also provide clear information about the actions that customers need to take to agree a new contract or switch supplier. We would expect suppliers to give a customer a minimum of one month to respond from the time they receive the letter; this will allow customers adequate time to consider their next contract. We also propose that renewal letters highlight the action a customer is expected to take.


2. Measures to resolve issues in energy retail markets:

Following a decision by Ofgem’s governing authority the regulator has today published a consultation on the remedies to better protect domestic and business energy customers. The domestic consumer remedies include obligations on suppliers to provide:
a standard annual statement covering, among other things, the tariff name, the customer’s consumption and a reminder of the customer’s right to switch; simplified information on tariffs to make comparison easier including an at-a-glance price score card to help consumers in switching; written quotations following doorstep sales and, for pre-payment meter customers, proof that the offer made on the doorstep is better than the customer’s existing deal; greater financial transparency to give consumers confidence that the market is competitive and fair. Suppliers will be expected to deal fairly with domestic customers. This will be spelt out at the head of the retail remedies package in a set of new, overarching standards of conduct that suppliers should meet. The standards will complement the licence conditions that will deliver the new retail remedies package and will remind suppliers of what customers should expect of them in all instances.


3. Ban on unjustified pricing:

Ofgem’s governing Authority is minded to introduce a new licence condition on suppliers that will ban unjustified price differences in payment methods for households. It will require that prices reflect the costs to the companies. For example, prices charged under different payment methods such as pre-payment meters and direct debit will have to reflect the cost to the supplier of offering those payment methods. The proposal is that the undue discrimination licence condition will be removed after three years. The purpose of this “sunset clause” is to allow the retail market measures to come into play. Stakeholders have until 13 May to respond to the consultation on this proposed licence condition.


4. Ofgem is the Office of the Gas and Electricity Markets, which supports the Gas and Electricity Markets Authority, the regulator of the gas and electricity industries in Great Britain. The Authority's powers and duties are largely provided for in statute, principally the Gas Act 1986, the Electricity Act 1989, the Utilities Act 2000, the Competition Act 1998, the Enterprise Act 2002, the Energy Act 2004 as well as arising from directly effective European Community legislation.

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Experts warn of 'energy shortfall' as nuclear sites revealed

Wednesday, April 15, 2009

The government fired the starting gun today for the rebirth of Britain’s nuclear power industry, announcing the names of eleven sites earmarked for construction of new reactors.

Each of the new stations will cost £4.5 billion to build and will be powerful enough to supply as many as 2 million homes with electricity for up to 60 years.

Energy experts warned that the first one would not be ready before 2017 at the earliest — too late to avoid a yawning gap opening up in Britain’s energy supplies with a string of ageing coal and nuclear stations set to close over the next few years.

Ed Miliband, the Energy and Climate Change Secretary, said that the list of new sites — all of which are located at or close to existing nuclear stations and which span the country from West Cumbria to Kent and Somerset — represented "another important step towards a new generation of nuclear power stations".

"Nuclear power is part of the low-carbon future for Britain. It also has the potential to offer thousands of jobs to the UK and multimillion-pound opportunities to British businesses."

The public now has one month to respond to the list of sites, including Hinkley Point in Somerset and Sizewell in Suffolk, considered the frontrunners for the first two stations to be built by the French power giant EDF.

Other sites thought to be among the first wave of new reactors include Wylfa in Anglesey; Oldbury in Gloucestershire; and Bradwell in Essex.

The list also includes Dungeness in Kent; Hartlepool in Cleveland; Heysham in Lancashire; and three separate sites in West Cumbria at Sellafield, Braystones and Kirksanton.

Craig Lowrey, head of energy markets at EIC, an independent consultancy, pointed out that the new plants would arrive too late to help Britain avoid a dangerous slide towards an unhealthy dependency on electricity produced from gas-fired power stations.

This was an unwelcome development because of the carbon emissions associated with burning gas and because the UK was running short of its own supplies in the North Sea,forcing it to import more and more of the fuel from countries such as Russia, Algeria and Qatar, Dr Lowrey said.

Britain’s current fleet of power stations — including coal, gas, nuclear, hydroelectric, wind and biomass stations — have a generating capacity of about 83.5 gigawatts. Roughly a quarter of that (22-23 gigawatts) is set to close in the next few years as ageing nuclear plants are retired from service, while a big chunk of coal-fired generation is set to close by 2015 to meet tough new European rules on the use of coal and oil-fired power stations.

The announcement of the nuclear sites also triggered a wave of protest from environmental groups, which argue that the high costs involved and the waste produced by nuclear stations do not justify the contribution they will make in cutting UK carbon emissions.

"We urgently need to end our addiction to fossil fuels, but breathing new life into the failed nuclear experiment is not the answer," said Robin Webster, energy campaigner for Friends of the Earth. "Nuclear power leaves a deadly legacy of radioactive waste that remains highly dangerous for tens of thousands of years and costs tens of billions of pounds to manage."

This story was featured on The Times Website.

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UK must do more to secure wind energy jobs

Tuesday, April 14, 2009

The UK is punching well below its weight when it comes to offshore wind, risking missing legally-binding targets and the opportunity to secure tens of thousands of jobs.

This is the conclusion of a new paper published today by think tank the Institute for Public Policy Research.

The paper says rapid expansion of the sector is needed to meet EC targets of 15% the UK's energy to come from renewable energy by 2020.

It also says that more government support is needed to make the UK a global hub for offshore wind energy, with the potential to create up to 70,000 jobs in parts of the country where they are most needed.

It claims that only 700 people are currently employed in this sector and only one factory in the UK has been set up to make parts for turbines.

Matthew Lockwood, Senior Research Fellow for ippr, said: "Offshore wind has great potential for UK jobs but we risk being blown off course."

"The government's pledge to achieve ambitious renewable energy targets by 2020 shows it is serious about its potential but we need to follow through with concrete policies to create greater certainty for industry, maximise the potential for the UK economy and realise our environmental goals."

The report also points to government backing for wind energy industry in Denmark, Spain and Germany saying that initiatives there have successfully provided stimulus for the sector.

The British Wind Energy association (BWEA) has said this is the latest in a long line of reports to show that, despite having the best wind resources in Europe, the UK is failing to cash in on a potential boom area.

Dr Gordon Edge, BWEA director of Economics and Markets, said: "A host of independent studies has shown that the wind sector in the UK can be a motor for economic growth.

"Wind can provide clean, sustainable energy, while attracting investment and creating employment. It is a win-win situation, which, with the right policy framework in place, can benefit the country as a whole."

The report can be found on the ippr website.

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Green energy feels the chill in harsh economic climate

Saturday, April 11, 2009

As companies make big cuts to investments in renewable energy, time is running out for Britain to take action to meet its targets on reducing carbon emissions

Britain’s wind energy industry increased its call for state aid yesterday, after new figures showed that investment in the sector has collapsed by nearly 80 per cent.

The amount invested in British renewable energy schemes, including wind, solar and wave power, fell from £377 million during the first three months of last year to £79 million during the same period this year, according to figures from New Energy Finance, a research group that monitors industry trends. The figures have raised fresh questions over the Government’s ability to fulfil its pledge to slash Britain’s carbon emissions and produce more than one third of the country’s electricity from green energy by 2020.

Adam Bruce, the chairman of the British Wind Energy Association, (BWEA), said that the figures reflected the need for the Chancellor to introduce new measures to support the industry, which is struggling to secure finance because of the credit crunch. It is also suffering from the weak pound, which has driven up the cost of turbines and other equipment — most of which is produced outside Britain — and the falling price of coal, oil and gas.

There were signs yesterday that the Government was considering the inclusion of measures in the April 22 Budget to prevent the cancellation of large projects such as the London Array, a £3 billion scheme to build the world’s largest offshore wind farm in the Thames Estuary, which Gordon Brown has backed.

Its developers are already seeking a bailout from the European Investment Bank to allow the scheme to proceed. Its 341 turbines would produce enough electricity for 750,000 homes.

Paul Golby, chief executive of E.ON UK, one of Britain’s “big six” energy companies and one of the project’s backers, told The Times he now thought that it would be impossible for the country to meet its target of generating 15 per cent of total energy from renewable sources by 2020, which amounts to 35 per cent of its electricity. The target is a key part of Britain’s promise to cut its carbon emissions by 80 per cent by 2050.

Lord Smith of Finsbury, chairman of the Environment Agency, said that it was crucial to Britain’s future in the renewables sector that more funding, including public funding, was made available. “We’ve already seen some companies pull out. We will see more of these things happening if we don’t improve the funding,” he said. “Over the past 10-15 years we have tended to come too late to the table, as a country, when it comes to the development of renewable energy.”

Although investment in renewable energy has been falling everywhere in the recession, the British decline was unusually steep. Globally, investment fell by 53 per cent to £9.1 billion in the first three months of this year, compared with £19.3 billion at the start of last year, according to New Energy Finance. Delays securing planning consent and access to the national grid have compounded the problems.

The news comes as the Institute of Public Policy Research (IPPR) prepares to publish a report next week that will warn that Britain must act now if it is to take the opportunity to build a thriving offshore wind energy industry that could employ as many as 70,000 people. The institute said that only 700 people were employed in the sector at present.

The BWEA is calling on Alistair Darling, the Chancellor, to introduce incentives and grants to support the industry in the Budget. It also urged the Government to accelerate planning decisions and reduce the cost to developers of hooking up schemes to the national grid.

Some companies, such as BP and Shell, have already left the wind industry, while others, such as Iberdrola Renovables, the world’s largest wind-farm operator, have cut their investment programmes.

The Department of Energy and Climate Change said that Mike O’Brien, the Energy Minister, was exploring options to help the industry.

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Gas producers dismiss cartel talk

Thursday, April 09, 2009

Major gas exporting countries have said they will form a high-level committee to discuss pricing.

However, meeting in the Qatari capital Doha, the informal grouping, called the Gas Exporting Countries Forum, said it had no plans to set up a cartel.

Russia, will head the committee with other members also including Iran and Kazakhstan, Algeria and Qatar.

Gas accounts for about 20% of the fuel used globally for heating, cooking and generating electricity.

In a statement, the forum said the committee would "elaborate a comprehensive plan for enhancing the forum's performance structure and define a way forward for its future development".

Played down

The forum is a relatively informal grouping with a variable membership but it accounts for something like 70% of known reserves.

Some of its leaders had expressed interest in forming a cartel similar to Opec to control production and price.

But the Russian energy minister Viktor Khristenko said he felt that the forum should remain unchanged.

"It should continue existing as such and should keep up its transparent and coordinated position towards consuming countries," the minister said.

He added that the forum would launch a joint study to examine prices, with Russia, the world's largest gas supplier, organising the process.

Mr Khristenko had earlier played down talk that the group was looking to set up a cartel similar to Opec.

Scepticism

Venezuela and Iran have led calls for such a scheme, saying this would be in the best interests of producers.

"Having such an organisation for the gas exporting countries is beneficial to all sides," Iranian Oil Minister Kazem Vaziri Hamaneh said, but added the process would be a lengthy one.

Mr Hamaneh dismissed opposition from the US and other Western nations.

Many analysts are sceptical about whether a gas cartel could work.

Most gas trade is through regional pipelines so there is not the same kind of global market that a cartel could seek to control as there is for oil.

Gas contracts also tend to be long-term, covering periods as long as 30 years, which makes it difficult to cut production to raise prices.

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Rising costs threaten wind farms

Wednesday, April 08, 2009

At least five big wind energy projects are in danger of being delayed or shelved owing to higher costs and a shortage of credit, the British Wind Energy Association said on Wednesday.

The projects, which are offshore, amount to about three gigawatts of wind energy capacity or almost a 10th of the amount needed to meet government targets. All were expected to receive final agreement on their funding this year but sterling’s decline has raised the cost of some imported turbine components while project finance conditions have now tightened.

The five include the London Array, the UK’s biggest proposed offshore wind farm, as well as projects in Lincolnshire and Wales.

The rate of new applications to build wind farms was falling and independent onshore developers were struggling to find finance, the BWEA said, while offshore projects were most at risk of delay. Several prominent energy companies have scaled back their commitment to renewables, including BP, Shell and Iberdrola.

Maria McCaffery, chief executive of the BWEA, said: “The current economic climate has caused a number of developers to put projects on hold, threatening the UK’s targets and leaving the country exposed to volatile fossil fuel prices.”

She urged Alistair Darling, the chancellor, to include more support for renewable energy in the Budget. “Building a clean energy sector in the UK is an important part of our economic recovery, and we need to maximise the opportunities to develop sustainable energy projects which would otherwise be delayed by the recession,” she said.

Wind farm developers are also looking to raise funds from the European Investment Bank, which is investing €800m (£723m) a year in renewable energy around Europe. Eon, Dong and Masdar, the owners of the London Array, have applied for funding but if granted it would make up only a small part of the estimated £3bn cost of the project.

Wind farm development costs should have fallen, as lower commodity prices have cut turbine prices. But a weak pound has made imports more expensive, cancelling out the gains.

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