Utility news
On this page you will find industry news about electricity, renewable energy, gas, water, fixed and mobile telecoms, and other stories. Our news is updated once per month. We cover items such as developing technologies, price changes in the utility markets, takeovers and company collapses, changes in tariffs, the results of investigations by the regulators and market trends.
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Industry news
Wind-farm investment boost for Aberdeen firm
Wednesday, December 23, 2009
A rapidly-growing Aberdeen company specialising in the construction of offshore wind farms has secured £42 million of investment to fund more growth, a sign of emerging confidence that they are on the threshold of a boom.
The investment has been secured by Subocean Group, which was formed in 2005 to win work on laying seabed cables between offshore turbines and to the shore.
The company now plans to double its size in two years, adding 45 staff to its permanent workforce of 90 and its 100 offshore contracted employees.
The investment is notable for being the first made in Scotland by LDC, the private equity arm of the Lloyds Banking Group. LDC opened offices in Edinburgh and Aberdeen last year.
Subocean is currently working on two major new offshore wind farms — the 140-turbine Greater Gabbard farm off Suffolk, being built by Scottish and Southern Energy, and the 100-turbine Thanet farm in the Thames estuary being built by Vattenfall of Sweden.John Sinclair, managing director of Subocean, said: “LDC’s investment demonstrates fantastic confidence in the business and its potential, particularly within marine renewables where we are now working on over 50 per cent of offshore wind farm projects currently under construction in UK waters. With an order book standing at £150 million, we have strong foundations for our ambitious growth which the new equity will help us pursue.”
James Rodger, Scottish director of LDC, will now be joining the board of Subocean. Mr Rodger said: “Following a series of major contract wins, the company has become a leading player in a sector which is poised for major capital investment over the next ten years.”
“The private equity market this year has generally been quiet throughout the UK and particularly in Scotland. However, LDC’s philosophy is to support first class management.”
Mr Sinclair added: “To date, Subocean has only been addressing the UK market requirements, but we see an even bigger opportunity to capture a significant share of business.”
This stiry was featured on The Times website.
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Ofwat to rule on how much firms can charge for water
Tuesday, December 22, 2009
Water industry regulator Ofwat will announce later how much water companies in England and Wales can charge their customers over the next five years.
If Ofwat sticks to its preliminary findings announced in July, water utilities will be forced to reduce their bills between 2010 and 2015.
Such a move is likely to see the firms warn it will impact on their services.
Ofwat is also due to rule on how much the companies must invest in their services over the next five years.
A number of firms have already warned they will not be able to offer a decent service if they cannot get any more money.
Thames, the biggest water company, has said it will be unable to reduce leakage at all over the next five years without a price rise.
Another firm, United Utilities, has said it will have to sell off parts of its business in order to make up any shortfall in funding.
Scottish water companies have been told they cannot raise their bills for a year from April 2010.
The regulator - the Water Industry Commission for Scotland - said it was likely to extend the price freeze for another year.
Prices cannot rise higher than 5% below inflation over the next five years. Scottish Water has also been told to reduce leaks by a third.
This story was featured on the BBC News website.
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Hydro-electricity in Wales: Turning streams into cash
Tuesday, December 22, 2009
A sheep farm in the Brecon Beacons in mid-Wales is providing a glimpse of a post-carbon future, one in which green electricity is generated locally.
And the farmer involved, Howell Williams, has found that low emissions can mean high profits. He is making £900 ($1,500) a month from going green.
Howell has worked on the damp, golden hills above the village of Abercraf for 30 years. One day, tramping back down along one of the streams that tip down from the hilltop, he had an eye-opening moment.
"I thought: 'What terrific power!'" he remembers. "If only we could harness this."
Howell Williams spent £25,000 ($41,000) on a water turbine, housed in a small shed over the stream, just next to his farm. A £2,500 grant from the Brecon Beacons National Park helped him reduce the cost.
He showed me the equipment after a rainy few days and it was generating at its maximum rate, a constant 11kW, all of it sold to the local electricity company.
"I think I am generating enough electricity for 20 houses," Mr Howell says.
World leaders are under pressure to agree a climate deal in the Copenhagen talks, but the only pressure Howell Williams feels is from the water gushing 90 metres down the hillside.
He is thinking about installing another turbine. On a recent Sunday, 20 local farmers came to see his mini-hydro station and 14 of them said they could see the potential for similar installations on their own farms.
'Borrowed water'
Welsh hill farmers have always struggled to scrape a living. Water power offers the prospect of a steady income to supplement the up and down earnings from selling lamb.
A few miles away, in the picturesque Dyffryn Crawnon valley, plans are being hatched for a bigger water turbine on another steep hillside dotted with woods, sheep and and stone farm buildings.
The difference is that this is to be a community project. The profits, expected to be £12,000 a year, will be spent on energy-saving schemes for residents and more water turbines.
Projects like this are tiny compared with the overall demand for power, but the plans are just a start.
"It's not going to generate all of our electricity needs but it's going to produce a lot of it," explains Chris Blake, who runs a local initiative called The Green Valleys, "And if we can get 40 or 50 schemes in this area then it really does start to make a big difference."
He points out that the water is only "borrowed": it's extracted upstream and returned to the river below the turbine. And the turbine house will be hardly visible, half-buried and covered in a turf roof.
The 16kW Dyffryn Crawnon turbine will generate almost as much power as the inhabitants of the valley currently use.
"This valley probably has scope for four or five such schemes which would make it a carbon negative valley, this within 5 years. It's something fantastic to show to Copenhagen."
Steep slopes
Howell Williams took me to round up sheep and lambs and move them to some fresh, glistening pasture, in order to show off the spring above Abercraf which feeds his stream.
Water is diverted at this point to shoot down the hillside in a buried plastic pipe, gathering speed and force along the way.
He restricts grazing and the size of his flock, to try to control its impact on the landscape. But the water turbine has transformed his environmental credentials and he is beginning to look at the sustainability of the farm as a whole.
Farming has had to face difficult questions in the debate over global warming. There are the tractors, the manufactured feed, the methane given off by livestock: all combine to create a carbon footprint which has to be justified.
"You're producing carbon-negative lamb," I suggest.
"Yes," Howell agrees, "I should imagine 90% anyway."
"I think it's a good route to take with livestock. We should make use of any natural resources we've got - wood, water, the air you use. It can all be brought together in one package."
Not many people are lucky enough to have a steep slope and a fast-running stream on hand.
But if objectives set in Copenhagen are to be achieved, everyone will have to look around them, like Howell Williams, and find whatever opportunities they can to reduce their carbon emissions.
Simon Gompertz's television report can be viewed here on the Working Lunch website.
This story was featured on the BBC News website.
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'Poo power' cuts electricity bill
Tuesday, December 22, 2009
A water firm says it saved £15m last year - by using human waste to make electricity.
In 2008/09, Thames Water generated 14% of its power from either burning sludge or methane derived from the 2.8 billion litres of sewage it treats every day.
The company hopes the move will ultimately help it cut greenhouse gases by 20%.
More than 13 million people in London, Berkshire, Oxfordshire, Hertfordshire and Surrey are served by Thames Water.
Dr Keith Colquhoun, Thames Water's climate change strategy manager, said: "There's no polite way of saying this but what we produce - our poo - isn't simply waste, it's a great source of energy.
"The solids in sewage have a high calorific content that we use to generate electricity.
"This isn't a gimmick. As well as helping us to be more sustainable as a company, it also saves money - £15m less of customers' cash spent on National Grid energy last year alone, which ultimately has a downward pressure of bills.
"Our goal is to cut greenhouse emissions by 20% on 1990 levels by 2020 - that's about 200,000 tonnes less CO2.
"By using poo power and other renewable energy sources, we're making significant progress towards this target."
This story was featured on the BBC News website.
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Northumbrian Water hit by bad debts
Tuesday, December 22, 2009
Business closures in the north-east of England left Northumbrian Water with bad debts of £1.7m in the six months to September, the firm has said.
The debt was mainly caused by the closure of a large customer on Teesside.
The firm also said the current economic downturn was hitting revenues from industrial and commercial customers.
However, higher prices helped to offset difficult trading conditions and its pre-tax profit rose 12.8% to £87m.
On Thursday, water regulator Ofwat is expected to rule on how much water companies can increase their prices over the next five years.
Northumbrian says the outcome is the "key risk for its business", and is challenging a draft report published in July.
Ofwat limited Northumbrian to increasing its prices by no more than £3 or a 1% increase in prices before inflation for the whole five-year period.
This story was featured on the BBC News Website.
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BT to complete super-fast broadband network by 2012
Tuesday, December 22, 2009
BT's superfast broadband network will be completed in time for the 2012 Olympic Games, the firm has announced.
The £1.5bn fibre-optic network will offer speeds of up to 100 Megabits per second (Mbps) for some customers, supporting high-definition video.
However, it will only reach around 40% of homes, mainly in towns and cities.
The firm had originally said the programme would be completed by March 2013 but said the rollout was now "ahead of schedule" .
"Given the progress we're making, four million homes will have access to fibre by the end of next year," said Ian Livingston, CEO of BT.
He said the firm aims to offer 10 million homes access to the fibre network "by the time the games begin" on the 27 July.
The firm currently has five million customers.
But extending the coverage would "inevitably involve support from the public sector", he added.
Customers will be able to access the highest speeds where BT runs fibre-optic cables all the way to their home.
However, the network will still offer speeds of up to 40 Mbps in areas where the fibre cable is run to BT-owned cabinets. In these fibre-to-the-cabinet areas, homes will still be connected to the cabinets by slower copper cables.
Currently, BT's rival Virgin Media offers some homes broadband speeds of up to 50 Mbps, regarded as super-fast broadband.
The UK government has said it wants super-fast broadband available to 90% of the country by the end of 2017 and everyone in the country to have access to broadband speeds of 2 Mbps by 2012.
However, Mr Livingston called for further clarity from the UK government.
"If you look around the world, several governments are pro-actively supporting the roll out of fibre broadband," he said.
"There's still a debate in the UK - which is fine - but we need our politicians to decide how much of a priority fibre broadband is."
The government plans to introduce an annual tax of £6 to fund the rollout of broadband, particularly for rural areas.
This story was featured on the BBC News website.
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Government announces commitment to deliver smart meters
Tuesday, December 22, 2009
On the 11 May 2009, the Government announced a positive impact assessment for delivering smart meters to every home in Britain. Government also published a further consultation on the delivery model for smart metering and smart meter functionality. This consultation ends on the 3rd August 2009.
Government is expected to respond to this consultation by early autumn. Government will also need to set up the governance body to deliver smart metering soon afterwards.
What are smart meters?
Smart meters are the next generation of electricity and gas meters.
They will bring about the end of estimated bills and meter readings, and provide customers and energy suppliers with accurate information on the amount of electricity and gas being used.
Smart meters will empower customers to make choices on how much energy they use. Suppliers will install two-way communication systems that display accurate real-time information on energy use in the home to the consumer and back to the energy supplier.
In addition, smart meters enable:
•Flexible tariffs that measure consumption over set time periods
•Capability for selling energy back to the supplier which will facilitate microgeneration technology (e.g. solar panels or wind turbines)
•The same meter for electricity (and gas, subject to cost) will be used for all customers, whether they are pre-payment or credit , and regardless of supplier
•Suppliers will be able to differentiate their tariffs and services through offering alternative means of displaying energy consumption – i.e. through mobiles, the internet or via digital TV
•Improved accuracy of forecasting energy demand at different times of the day
This story was featured on the Energy-Retail website.
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Energy firms criticised in poll
Tuesday, December 22, 2009
Energy companies have come bottom of a league for consumer confidence for the second year in a row.
The poll, for watchdog Consumer Focus, found that private pension plans shared the position at the bottom of the rankings.
The poorest performing markets were those that dealt with complex, infrequent or expensive purchases.
Energy UK, which represents energy suppliers, said the survey did not compare like with like.
Retail goods such as televisions and DVDs were greeted with the most confidence in the poll.
"The great news from our survey is that many Christmas presents people will be buying this year, from the latest electronics to perfume, continue to give a warm glow. But energy is the worst rated sector, for the second time in a row," said Prashant Vaze, chief economist at Consumer Focus.
Negative perceptions
Mortgages and personal banking services also featured in the 10 areas that met with the least consumer confidence.
The watchdog said that the results of the poll, which surveyed 5,862 people in March and April, could have reflected the state of the economy.
Negative public perceptions over issues surrounding energy prices, bank bail-outs and falling pension pot values might also have affected consumer confidence, it said.
In general, the poll found that areas which performed badly included:
Markets that led to "stress or pain" rather than "pleasure" markets, such as having to call a service for help when something goes wrong
Areas where contact with operators was less frequent
Complex industries where consumers had a limited knowledge or understanding of the market.
Some 30% of those asked in the survey had made a complaint in the last year, with people aged in the 16 to 34 age bracket more likely to complain than the over-65s.
However, the poll was criticised by Energy UK, which represents gas and electricity suppliers.
"The Consumer Focus survey does not compare like with like. Having gas and electricity supplied to your home is not comparable to buying books, DVDs and video games online," said Christine McGourty of Energy UK.
"It is hardly surprising that buying TVs and DVDs come off better than paying for an essential service like energy. Shoppers get some pleasure out of choosing and playing DVDs but not necessarily from buying the electricity that powers them.
"Energy suppliers will be working with Consumer Focus to develop a more meaningful way of assessing customer satisfaction."
This story was featured on the BBC News website.
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Gas supply lost to homes in Barnet
Monday, December 21, 2009
About 700 homes in north London have spent the night without a gas supply and are waiting to see if they will be reconnected by Christmas.
Residents in the East Barnet area lost the service in the early hours of Sunday.
A spokeswoman for National Grid said water from a burst main had got into the gas pipes, cutting off the flow.
About 3,000 cooking and heating appliances have been distributed to all affected households.
The damaged gas main has been located and repaired and the process of pumping the water out of the gas system has begun.
Paul Hanafin, National Grid's Incident Controller, said "At present it is too early to say when gas supplies will be restored.
"We are drafting in engineers from as far as the North Midlands to help and we are working hard to ensure that residents have their gas back as quickly as possible.
"We appreciate that this is a difficult time for residents, but we ask them to bear with us as we work to resolve this situation".
An incident room has been set up in St Mary's Church of England Primary School in Little Grove and National Grid is working with Hertfordshire Council's emergency planning department to identify vulnerable people within the area
This story was featured on the BBC News website.
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Vodafone to sell iPhone in UK in January 2010
Monday, December 21, 2009
Vodafone says it will start selling the iPhone in the UK on 14 January 2010.
It is the latest of the UK's major phone networks to offer the iPhone to customers.
The cheapest tariff available is £30 a month for 24 months, plus additional handset charges ranging from £59 (iPhone 3G 8GB) to £239 (3GS 32GB).
Both business and consumer contracts are subject to a 1GB monthly data limit on mobile internet use. Orange has a "fair use" limit of 750MB per month.
Vodafone and O2 both offer unlimited wifi use. Orange's data limit includes connections to the internet via BT Open-Zone wifi.
Both O2's and Orange's lowest tariffs - £34.26 and £29.36 respectively - are on a 24-month contract and come with a free iPhone.
Vodafone comes close with a £35 a month contract over a two year period, also including a free 3G 8GB handset.
Tesco Mobile tariffs start at £20 a month for 12 months - with a £222 charge for the same model of handset. However, Tesco says that the shorter contract will enable customers to upgrade more quickly.
Guy Laurence, chief executive of Vodafone UK, said that the company had been preparing its network for over a year to handle the introduction of the iPhone.
There are concerns that mobile networks globally are struggling to cope with demand as more consumers choose internet-enabled smartphones and mobile dongles over fixed broadband deals.
Vodafone has also introduced a charge for customers wishing to use their iPhones as a modem - starting at £5 to download 500 MB.
This story was featured on the BBC News website.
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Gas supply firms warned on bills
Thursday, December 17, 2009
The UK energy regulator, Ofgem, has warned energy supply companies that households must benefit from a fall in wholesale gas prices.
Ofgem said that if wholesale prices continue to fall, bills must come down in the New Year to avoid the customer losing out.
The regulator said companies must not "use investment as a shameful excuse to overcharge consumers".
It added that customers can save around £200 a year by switching suppliers.
That's down to the emergence of new players in the industry providing competition.
A further investigation into retail prices will be launched in the New Year, and the regulator says it "will not shy away from proposing radical reform to protect the interests of consumers."
Ofgem said that at the moment firms were still recovering from three or four years of losses.
However it added that profit margins in dual fuel bills are at a five year high and they may rise further.
So far, the cost to the customer has been broadly neutral but if wholesale gas prices continue to fall as predicted, then companies will need to reflect that in their bills.
No profit
"The reality is that companies may be making some modest profit this year after around 4 years of making either none at all, or a loss," said Energy UK - a new communications unit representing the leading gas and electricity suppliers.
The statement added that energy itself only accounts for about half of customer bills - with the rest including things like the cost of renewable energy, as well as the cost of getting the energy from its source into homes.
separate report by the economic consultancy NERA, commissioned by Energy UK, suggested that companies were making no profit from their dual fuel customers.
And the report indicated that the energy firms make only a small profit - £9 or £10 a year - from customers who take gas and electricity from different suppliers.
'Tough'
Separately, Ofgem said average electricity bills can increase by £4.30 a year for five years to pay for network upgrades.
The 14 networks that make up the UK supply were built in the 1950s and 1960s and are in need of investment.
Ofgem chief executive Alistair Buchanan said the proposals were "tough on inefficiency and poor service but fair in allowing the companies to invest".
And he said the new controls would lead to a greener electricity supply.
Mr Buchanan said Ofgem had cut the sum wanted by companies by 8% to ensure value for money for the consumer.
Ofgem said investment on the UK's electricity infrastructure would be up 40% - to £7.2bn - compared to the last five years' spending.
The new investment figure includes £500m for a low carbon energy fund.
Distribution networks
The 14, low voltage, distribution networks take electricity from the national grid and pass it to homes and business customers.
Before privatisation they were part of the state-owned regional electricity companies.
Now the networks are owned by seven separate firms: CE Electric, Central Networks, EDF Energy Networks, Electricity North West, SP Energy Networks, SSE Power Distribution and Western Power Distribution.
The networks are not electricity suppliers in their own right, so their charges are passed through to customers in the bills the suppliers send out, and make up 16% of those bills.
The network distribution costs, unlike overall suppliers' bills, are still formally regulated by Ofgem as the networks are natural monopolies and are not subject to competition.
This story was featured on the BBC News website.
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Energy pairing on crest of a wave
Thursday, December 17, 2009
One of Europe's biggest energy companies has teamed up with an Edinburgh firm to develop the first wave power project off Shetland.
The joint scheme between Sweden's Vattenfall and Pelamis, based in the capital, has been set up to explore wave power development opportunities.
The joint venture called Aegir said it was working towards installing a project up to 20 megawatts in scale.
If planning consent is granted, the first phase would be installed by 2014.
Dr Helmar Rendez of Vattenfall said: "Vattenfall intends to make electricity clean by 2050 and halve its carbon emissions by 2030.
"This means we must invest in the green energy technologies of today and tomorrow."
Neels Kriek, chief executive of Pelamis Wave Power, said he hoped the ground-breaking project would be one of many for the P-2 Pelamis machine.
He added: "We also anticipate this project being a leading candidate for the Scottish government's saltire prize for commercially proven wave power technology."
'Long overdue'
First minister Alex Salmond welcomed the announcement.
Mr Salmond said: "It is clear that Scotland is now seen as the natural home for those who wish to develop and succeed in the marine renewable sector.
"The Scottish Government is committed to developing a world-class wave and tidal energy sector and to maintain our position as a global leader in the development and deployment of these technologies.
"Investment in renewable energy is driving Scotland's economic recovery, with projects up and down the country supporting highly skilled, low carbon jobs and we are leading the way by developing the technology and capacity in renewables, carbon capture and energy efficiency to reduce the effects of global warming."
Dr Richard Dixon Director of WWF Scotland said: "Plans to develop Pelamis wave power machines in Shetland is an important step on the path to making Scotland's energy 100% renewable.
"To finally see Pelamis used commercially in the shores around Scotland, the home of its creation, is long overdue."
This story was featured on the BBC News website.
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Green energy projects win £100m
Monday, December 14, 2009
Two Scottish offshore renewable energy projects have had more than £100m of EU funding confirmed.
The EU energy commissioner confirmed a grant of 40 million euros (£36m) for Aberdeen's proposed offshore wind farm.
While a further 74 million euros (£67m) has also been approved for an offshore platform between Shetland and the Scottish mainland.
The platform will form part of the North Sea Grid, which will connect wind farms in eight European countries.
The commission's announcement effectively rubber stamps a decision made by the EU council earlier this year.
The Aberdeen Bay project could involve 23 turbines between one and three miles out to sea stretching about three miles from the Bridge of Don to Blackdog.
It is a joint venture between Aberdeen Renewable Energy Group (AREG) and Swedish utility company Vattenfall. The backers of the project said they were delighted with the news.
This story was featured on the BBC News Website.
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Energy suppliers may be forced to cut bills
Monday, December 07, 2009
Ofgem, the energy regulator, warned energy supply companies today that they may be forced to pass on the benefits of falling wholesale gas prices to customers in the new year.
Alistair Buchanan, the chief executive of Ofgem, said: “Ofgem’s role is to ensure that companies can invest, but do not use investment as a shameful excuse to overcharge consumers.”
The regulator noted that wholesale energy prices had fallen in 2009, raising profitability for the energy suppliers to a five-year high.
The cost of buying wholesale gas for the big six energy companies – Centrica, Scottish & Southern Electricity (SSE), Scottish Power, RWE, E.ON and EDF – has fallen on average by £60 per customer bill over the past six months, according to Ofgem.
Companies’ profits on dual-fuel customers, who take gas and electricity from the same supplier, had risen sharply in the past few months and would increase further in the new year if prices remain unchanged, the regulator said.
Mr Buchanan said: “At the moment, the effect of companies smoothing prices has been neutral on consumers, but if prices stay unchanged in the new year, then we will see customers losing out."
Ofgem has been conducting a review of the energy market to ensure that customers are not being short-changed and Mr Buchanan said that there would be a further investigation of the power generation market in the new year.
Mr Buchanan warned: "We will not shy away from proposing radical reform to protect the interests of consumers.”
Separately, Ofgem announced today that it will allow Britain's 14 regional electricity distributors to raise prices by 5.6 per cent for the next five years.
The average bill will rise by £4.30 a year from next April. About 16 per cent, or £76, of the average electricity customer's annual bill goes towards the regional electricity distributor.
Ofgem said that the increase would allow electricity distributors to spend £7.2 billion to upgrade the ageing pylon networks that link the national grid to homes.
Today's announcement is an increase on Ofgem's outline proposal in August, which would have allowed the companies to raise £6.5 billion, by increasing bills by just under £4 a year for the next five years.
A spokesman for Ofgem said: "We have agreed that the companies needed the extra investment, particularly to allow for a switch to a greener electricity supply."
The £7.2 billion figure also includes £500 million the companies will be allowed to raise to pave the way for large-scale trials of "smart grids", which use special meters and other technology to reduce carbon emissions.
Mr Buchanan said: "Our proposals are tough on inefficiency and poor service but fair in allowing the companies to invest to replace ageing network assets and improve the environment."
However, the regulator's plan is likely to face a backlash from the industry. Ofgem said that it was allowing the two most efficient companies to spend the sum they asked for, but overall the bids from all 14 companies were cut by 8 per cent.
SSE, which owns two electricity distributors – Scottish Hydro Electric Power Distribution and Southern Electric Power Distribution – said that the increases it was being allowed looked too low and that it would have to "reassess its appetite for further investment in and acquisition of electricity distribution and transmission assets".
The 5.6 per cent average rise in bills translates as a 4 per cent annual return allowed on each company's investment after tax. SSE said this was well below all previous controls, including those set by Ofgem five years ago and by Ofwat for the water and sewerage industry last month.
Companies have until January 6 to respond.
The ownership of the power lines between the home and the main backbone grid is divided into 14 regional monopolies run by companies including CE Electric, Scottish Power, SSE, the US-owned Western Power Distribution, E.ON and EDF Energy.
Ofgem also said that it was suspending its current policy on mergers between electricity distribution companies, which forces them to cut £32 million from their bills should they merge.
It would look at any merger proposals on a case-by-case basis while it undertook a review of the policy, it said. Since the policy was set in 2002, National Grid has sold off five of its gas distribution networks, changing the ownership structure.
This story was featured on The Times website.
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Global gas glut threatens green energy
Thursday, December 03, 2009
A glut in global supplies of natural gas threatens to undermine British investment in low-carbon sources of electricity, including nuclear and wind power, according to the chief executive of Britain’s biggest energy supplier.
Sam Laidlaw, chief executive of Centrica, said that an expected surplus of global gas supplies over the next five years could force down wholesale prices to a level where energy companies may be discouraged from investing in more costly alternative sources of energy, such as nuclear reactors and offshore wind farms — particularly if this was accompanied by continued weakness in the price of carbon emissions permits.
“If you have a low gas price and a low carbon price, then the investment signals [for nuclear and wind] won’t be there,” Mr Laidlaw said, adding that it was essential that UN climate talks in Copenhagen next week led to the creation of a robust international price for carbon to bolster the investment case for low-carbon energy. “That is why Copenhagen is so important. The answer comes back to the carbon price.”
The International Energy Agency (IEA) said this month that rising production of so-called unconventional gas in the United States and Canada, using new technology, was creating an oversupply.
Global unconventional gas output will rise to 629 billion cubic metres in 2030 from 367 billion cubic metres in 2007, or to 15 per cent of worldwide supply from 12 per cent, the Paris-based adviser to 28 countries said in its annual World Energy Outlook. Gas supply capacity is set to outstrip annual demand growth of 2.5 per cent between 2010 and 2015, the IEA said.
This story was featured on The Times Website.
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