How businesses can become more sustainable and increase profits

In the drive to make industry more sustainable, when authorities attempt to pressurise the sector, squeals of "But jobs!" and "Competitiveness!" are heard.

Different sectors within industry respond to the "green-and-clean-yourself" call with varying degrees of enthusiasm. High energy users like cement and steel are notorious squealers. But all of them can benefit from not having a knee-jerk reaction and paying attention to leaders within their sectors who are heeding that call and seeing as a result a turnaround in their fortunes.

Because for an organisation to be able to survive into the future, it has to see all of its operations – its requirements in terms of materials, energy and water, its fixed assets – as equal in importance to its core activity.

Case study: Low carbon tomatoes

Terra Nitrogen, a company based in Billingham in the northeast of England, produces nitrogen chemicals and methanol for industry, but as an unfortunate by-product also produces a lot of carbon dioxide emissions.

It linked up with John Bader Ltd, which now diverts carbon dioxide from the plant into 38 acres of greenhouses erected next door to grow tomatoes.

Terra Nitrogen is also supplying electricity to the greenhouses, allowing them to continue production through the winter and removing the need for the UK’s supermarkets to import so many tomatoes from Spain.

The benefits include the successful reuse of waste heat, reduction of 12,500 tonnes of carbon dioxide emissions and the creation of 65 new jobs.

Case study: Unilever

Unilever is a much larger company that is leading the way. Its CEO, Paul Polman, is the visionary behind a Sustainable Living Plan, launched in November 2010, which seeks to double sales and halve the environmental impact of its products.

It is working. He believes that this fundamental shift in the business paradigm is partly a reaction to the financial crisis, from a rules-based one back to a principles-based one, but it has financial benefits.

Procurement of new equipment

It follows that a policy like this should translate into a procurement strategy. Part of any such strategy should be to purchase equipment that is sustainable and consumes the least energy, or has the least environmental impact, over its lifetime compared to comparable products.

Lists of these products, together with standards, may be found on the website of the U.S. Energy and Efficiency and Renewable Energy office, and on the European Market Transformation Programme website, with further information on the Energy Using Products Directive website.

Standby power load should also be a choice factor in procurement. For instance, US federal agencies must purchase products with a standby power level of 1W or less. Standby power typically occurs when the product is switched off for not performing its primary purpose. The standby power data centre lists compliant products.

Sustainable procurement is a specialism in itself. Specimen framework agreements to ensure the supply of sustainable goods and services are available from the website of the UK Sustainable Procurement Centre of Excellence (currently down but may be available via the UK National Sustainable Public Procurement Programme (NSPPP)). There, you might also find a knowledge base of information on sustainable procurement, commodity areas, carbon reduction, whole life costing, legislation, toolkits, case studies and best practice.

For ICT, ENERGY STAR® is a voluntary labelling scheme for products which use less than a specified energy consumption in typical use. It was originally developed by the US Environmental Protection Agency (EPA) for common computing equipment, but is now a joint activity with the European Commission.

This means that specification of ENERGY STAR compliance in tenders is compatible with EU procurement rules. A list of compliant models is at www.euenergystar.org.

A key factor in the energy consumption of ICT is user behaviour. It is now possible to purchase software which monitors actual PC use within an enterprise. Advanced versions permit energy managers to set power policies that reflect a certain level of usage, reducing both energy consumption and carbon emissions. They reveal when users are using their PCs by monitoring key strokes and mouse movements.

Energy managers can then match the power state of each subset of PCs, by location, with the activity level of employees. They can also identify unused or underutilised PCs on the network, further eliminating the management overheads of maintaining these machines; ensure that a computer in a low-power state can be woken up and accessed on demand when a user is working remotely; and that applications which prevent a PC from being powered down can be overridden while the PC is not in use.

Supply chain optimisation

It then becomes necessary for businesses and organisations seeking to reduce their carbon footprint to turn attention to that of their products and services, and this involves looking at their supply chains.
According to the American Council for an Energy-Efficient Economy (ACEEE), supply chain optimisation can result in up to 60 per cent of energy intensity reductions. For example, in food production and distribution, much perfectly good food is wasted due to spoilage, both in the supply chain and at the retail level. This means that all of the energy embedded in the food is wasted as well.

By modelling the supply system throughout the chain, opportunities may be identified to significantly reduce waste by changing processing, handling, packaging and delivery systems. The result is frequently fresher food delivered faster and of a more consistent quality. There is less waste and greater savings.

Case study: PepsiCo

UK snack foods manufacturer Walkers, and its parent company PepsiCo, have been working with the British Carbon Trust on energy efficiency and carbon management. They have saved over 2,000 tonnes of CO₂ per year, reducing energy bills by approximately £225,000 (US$350,000).

Having done this they moved on to looking at their supply chain in order to demonstrate a continuing commitment to emissions reduction. They began by looking at their raw material production, which includes potato and corn producers, sunflower oil and vegetable oil manufacturers, corrugated cardboard manufacturers and so on.

They then began to optimise the distribution of raw materials using logistics and network planning. They have already optimised the manufacture of products. The next step was product distribution, again tackled by the network strategic planning department. Finally, they wanted to make sure that redundant packaging could be recycled.

Energy Management in Industry

This is an extract from my latest book, Energy Management in Industry: The Earthscan Expert Guide, which is a companion to my Energy Management in Buildings, published in November 2013.

Energy demand reduction is fast becoming a business activity for all companies and organisations because it can increase profits regardless of the nature of their core activity.

The International Energy Agency believes that industry could improve its energy efficiency and reduce carbon dioxide emissions by almost a third using the best available practices and technologies.

This guide looks at the many ways available to energy managers to achieve or even exceed this level of performance, including: base-lining consumption planning a monitoring and verification strategy metering (including smart, wireless metering) energy supply management motors and drives compressed air and process controls.

It also looks at topics covered in greater detail in its companion volume, Energy Management in Buildings: insulation, lighting, renewable heating, cooling and HVAC systems. Uniquely, it includes a whole chapter on greening data centres. Further chapters examine minimising water use and how to make the financial case, both to prioritise measures for cost effectiveness, and to get management on board.

This title is aimed at all professional energy, industry and facilities managers, energy consultants, students, trainees and academics and can be read alongside training for ISO 50001 - Energy.

'David Thorpe's book Energy Management in Industry is an easy to read book about how you can save energy in your company…He does this without [needing] to over complicate it with technical details and scientific formula. I enjoyed reading this book and would highly recommend it to energy managers and anyone who would want to reduce energy consumption.' - Kit Oung, Energy Consultant and author of Energy Management in Business, Committee Member, British Standards Institute BSI-KSA.

Selected Table of Contents

Preface. Introduction. 1. Measuring Energy Consumption 2. Metering 3. Airtightness and Insulation 4. Lighting, Daylighting and Controls 5. Heating and Cooling 6. Heating, Ventilation and Air Conditioning Systems 7. Energy Reduction Technologies 8. Motors, Drives and Compressed Air 9. Refrigeration 10. Process Controls 11. Data Centres 12. Minimising Water Use 13. Making the Financial Case Conclusion. Appendix.

The new IPCC AR5 report: How should leaders respond?

Now that we have unequivocal evidence from the eagerly awaited Fifth Assessment Report from the International Panel on Climate Change that the planet is warming and human beings are responsible, how should  political leaders respond?

At the presentation by the IPCC panel in Stockholm this morning, we heard that "Human influence on the climate system is clear: since the 1950s, many of the observed changes are unprecedented over previous decades to millennia. The atmosphere and ocean have warmed, the amounts of snow and ice have diminished, sea level has risen, and the concentrations of greenhouse gases have increased."

There has been much talk from sceptic circles that the recent hiatus in global warming means that the scientists have got it wrong.

But this hiatus was explained by the panel as being due to the oceans absorbing heat from the atmosphere. This is temporary. Thomas Stocker, one of the co-authors of the report, said that: "The ocean is taking most of the heat from the air (93%), but it is not saving us". He added that "warming will continue under every scenario available".

There are four scenarios considered in the report, depending on what action we take. They indicate a range of possible temperature increases over the rest of the century from 1.5°C to 6°C. But Stocker warned: "The low band only comes in if quick action is taken to stop carbon emissions. If no action is taken we will be in the high scenario band."

It does not mean that the danger has been averted. Quite the contrary. It is therefore vital to take action as soon as possible.

A climate sceptic in the audience who asked question, David Rose from the British Mail on Sunday newspaper, was given a lesson in basic science because the panel felt he clearly did not understand it.

He asked how long the warming hiatus would continue before the panel admitted that their models might be wrong. He was patiently told: "Your comment is based on a misunderstanding of how the models work. Just because there is temporary unpredictability it does not mean that longer trends are unpredictable. Climate models show absolute consistent agreement with all of the long-term observed trends."

2000 to 2010 saw highest temperatures of any decade in the records. According to the World Meteorological Organisation's Secretary-General Michel Jarraud, scientists are giving even more warning of extreme climate events.

The panel urged policymakers to listen because the review process for the report is as rigorous as it could possibly be. 110 governments contributed to it, with 831 authors and editors synthesising reviews of 9,200 scientific publications since 2007 and integrating 54,000 comments on these papers.

This means that the scientific consensus is overwhelming. Being certain of the global trends, scientists now need to do more research to improve predictions on local and regional levels.

So how should leaders respond?

One of the particular issues highlighted was water use. Stocker said that: "Often people focus on temperature rises but, although important, local variations and underwater cycles are also vital, which impact on the water resources".

It was emphasised at the launch that action taken now will be cheaper than action taken later when conditions have worsened. This is exactly what was urged by Lord Nicholas Stern in his 2008 report.

The Summary for Policymakers says that: "The contrast in precipitation between wet and dry regions and between wet and dry seasons will increase, although there may be regional exceptions".

This means that to be resilient, cities and regions, and the land areas from which they source the water and their food, need to be far more water efficient and to implement strategies to manage excessive rainfall.

For those cities vulnerable to sea level rise the report says that "under all scenarios this rise will very likely exceed that observed during 1971-2010".

Over the next 80 years the rise could be between 40cm and 63cm (3ft6"-5ft). Together with predicted storm surges this guarantees increased flooding unless action is taken.

Oceans will acidify as they uptake carbon from the atmosphere, affecting marine sources of food.

"Most aspects of climate change will persist for many centuries even if emissions of carbon dioxide are stopped," the summary concludes.

Cities and regional and local authorities are in a better position than national governments to show leadership and respond more quickly to the challenge. Because they have control over planning and services locally they can choose to implement adaptation measures.

They also have a vital role in communicating the urgency of the situation to their citizens with local campaigns. Responding to the threat of climate change can be a source of pride for a city or region and its inhabitants and also improve quality of life.

Besides taking action to substantially and quickly reduce emissions of climate-warming gases, cities must also take steps to protect themselves: planting trees, using carbon-absorbing concrete instead of Portland cement, planning to reduce car journeys, making buildings as energy efficient as possible and generators of renewable energy, encouraging urban horticulture, using sustainable urban drainage surfaces.

This represents a business opportunity. There is room for cities to partner with industry to meet this challenge.

Tell me what you plan to do in responding to climate change.

How do you think we should respond?

A middle class low carbon community in the UK

Not far from the Minster town of Southwell, Nottinghamshire, on the edge of Sherwood Forest, a groundbreaking experiment has been going on for the last 20 years.

Five households have been forging a new way of living that is more sustainable than most in the sleepy village of Hockerton.

When I went to see Hockerton Housing Project as part of the research for a book I'm writing on One Planet Living it was a lovely late summer’s day. All of the trees and bushes were laden with fruit.

I was taken on a tour by a chap called Bill who had been living there for about seven years with his family.

We saw the orchards and fields where they grow 40% of their food and keep sheep and hands, and the pond which collects water, that is filtered for use in their washing machines, sinks and toilets.

Drinking water is collected from the glass roof of the conservatory the front of the row of houses and treated separately.

All of the effluent is purified using a beautiful reed bed at the side, and the water flows into a long lake in front of the terrace, which is stocked with carp and a haven for wildlife.

The houses are partly earth covered and made of dense concrete to hold the sun's heat captured by the south-west facing conservatories. Electricity is provided by solar panels on the roof and two wind turbines. They have more than they need and sell some for profit.

Part of their mission is to spread the about what is possible to live more lightly on the earth, and so they have regular tours and give talks and workshops.

And if you want to go live there one of the four bedroomed homes is for sale: a snip at £500,000.

"My kids love it here," says Bill. "And, after the initial suspicion, the local council and village people like us to. In fact, they are very proud of us."

More info: call (+44)(0) 1636 816902.

DECC tables plan to support independent renewable energy suppliers

Energy Minister Greg Barker said: “Our new reforms will create the framework for a far more dynamic and entrepreneurial market”.

The Department for Energy and Climate Change (DECC) has published plans to help independent renewable generators gain entry to the electricity market, in order to promote competition and innovation.

Energy Minister Greg Barker has tabled an amendment to the Energy Bill that will make it easier for independent generators of renewable electricity to sell their power to suppliers via Power Purchase Agreements, thereby improving their access to market.

Energy Minister Greg Barker said: “The Coalition is committed to driving much greater plurality, innovation and competition in the electricity market.

“Our new reforms will create the framework for a far more dynamic and entrepreneurial market, while still ensuring that we get the large scale investment that industry needs. Opening up the electricity market to more competition is a fundamental part of the reforms we are introducing through the Energy Bill.

“It will also allow new smaller players to gain a greater share of the exciting renewable electricity market.”

The amendment allows for the creation of an off-taker of last resort to be enabled, providing ‘back-stop’ power, providing greater certainty for renewable generators and investors.

Independent generators do not usually have a strong supply arm that sells electricity direct to consumers and have been finding it hard to enter the market, which is dominated by the ‘Big Six’ vertically integrated energy companies.

DECC says such companies "play an important role in helping to meet the country’s renewable energy targets, account for a significant chunk of the new energy infrastructure projects that are awaiting final investment decisions", and also introduce innovation and competition into the market.

The amendment would enable the Government to establish a scheme obliging suppliers to buy electricity from renewable generators under specified conditions if they were unable to agree a commercial contract. It would be used as a last resort, to strengthen routes to market and stimulate competition.

Detailed proposals will be developed and consulted on later this year.

Independent generators often sell their power to suppliers via power purchase agreements, and this is how they gain a route to market. The definition can cover a range of technologies and sizes.

Earlier this week DECC also published a draft delivery plan for Contract for Differences (CfDs) and the reliability standard of the future Capacity Market to guide how much capacity is auctioned in 2014 for delivery in 2018 to 2019.

Unveiling the plan, Secretary of State Ed Davey said it should "provide investors with further certainty of government's intent" to help incentivise up to £110 billion of funding for new electricity infrastructure by 2020.

Woodfuel conditions

DECC also issued a condition that new standalone biomass power plants will not be eligible for some subsidies unless they also generate heat, meaning many new plants could be cancelled, according to the Renewable Energy Association (REA), which represents large biomass generators. Gaynor Hartnell, its chief executive, said that combined heat and power (CHP) could not easily be retrofitted onto projects that had already been approved.

The move was welcomed by the Combined Heat and Power Association, which has lobbied in its favour. CHP is seen as much more efficient, as otherwise the heat goes to waste.

DECC also plans to restrict subsidies for biomass to 400MW per plant under the Renewables Obligation, which will operate until 2018.

The restriction does not apply to plants converting from coal-fired power, such as Drax, Britain's biggest power station. This means that large scale, controversial imports of wood pellets to Britain will continue, at least until the subsidies phase out in 2027.

On Wednesday, Mr Davey said that importing wood and burning it as biomass was not a long-term answer to the country's energy needs, leading to expectations that the government would reverse its support policy, but this has not materialised.

"This is something we already knew and does not mark a change in government policy," a Drax spokeswoman said.

DECC does believe that biomass is a transitional technology, "to be replaced by other, lower carbon forms of renewable energy in the medium to long term", it said in a statement.

Environmental groups are concerned that growth in Britain's bioenergy industry will mean the felling of virgin forests for fuel, a practice that was commonplace in Europe and North America before coal was used to power the industrial revolution. They are also worried that it takes 50 years to absorb from the atmosphere the carbon dioxide that is emitted during the burning of a tree.

Drax asserts that the woodfuel it imports has cut emissions in converted units by 80% compared with burning seaborne coal, and that it is certified as sustainable.

Last week, RWE npower said it would close a newly converted 750-megawatt biomass plant at Tilbury by July 21 because of a forecast drop in UK power prices and lack of capital from the Germany-based parent RWE.

Last year Drax also scrapped plans to build a new dedicated biomass plant on its site in North Yorkshire, due, it said, to insufficient government support.

Energy Minister Greg Barker said: “Our new reforms will create the framework for a far more dynamic and entrepreneurial market”.

Osborne gives tax boon to shale gas developers

The UK’s first shale oil site near the West Sussex village of Balcombe could soon become operational.

The Chancellor, George Osborne, has cut by around half the production tax that shale gas developers in the UK will have to pay, mesmerised by the possibility of emulating the success of fracking experienced in the USA.

Simultaneously he has stipulated that energy companies must contribute a benefit for each well drilled of £100,000 to local communities, plus up to 1% of all revenues from production.

Most British oil and gas companies pay 62% reduction tax. Shale gas producers would pay just 30%, a tax break that would apply to a proportion of their income to be determined following a consultation.

George Osborne announced today that shale gas has "huge potential" to diversify energy supplies in Britain, create jobs, improve energy security and keep bills low.

“Shale gas is a resource with huge potential to broaden the UK’s energy mix,” he said. “We want to create the right conditions for industry to explore and unlock that potential in a way that allows communities to share in the benefits.”

Energy Minister Michael Fallon gave a rigorous defence of shale gas in Parliament on 18 July in which he made reference to the shale gas industry’s "community engagement charter" and the environmental protection already in place for the industry.

He added: "The industry has said that we can expect about 20 to 40 exploration wells to be drilled here in the next couple of years, but I am clear… that success will come only if development is done in true partnership with communities."

He also told Green MP Caroline Lucas that planning applications will be dealt with by the local minerals planning authority "in the normal way" and not at the national level.

Friends of the Earth's Andrew Pendleton immediately slammed the move. "Promising tax hand-outs to polluting energy firms that threaten our communities and environment, when everyone else is being told to tighten their belts, is a disgrace," he said.

"Ministers should be encouraging investors to develop the nation's huge renewable energy potential. This would create tens of thousands of jobs and wean the nation off its increasingly expensive fossil fuel dependency," he continued.

A recent report from the British Geological Survey estimated there may be 1,300 trillion cubic feet present in the north of England alone, much of it in the Bowland Basin beneath Lancashire.

Fracking has many passionate opponents. Amongst them is the high street chain Lush Cosmetics, which this week has given their 105 UK and Irish shops – their windows, their staff and their online channels – to grassroots activist group Frack Off to publicise their ‘Don’t Frack our Future’ campaign that has been devised by Frack Off and campaigners at Lush Cosmetics.

During the ten days of this campaign the UK’s first shale oil site near the West Sussex village of Balcombe could become operational. The preparatory work for a 914 metre shale well has been started.

Activists from Frack Off have hosted training sessions for all Lush staff. Tamsin Omond, head of global campaigns at Lush Cosmetics, said: “This campaign will educate tens of thousands of people about the threat of fracking to their communities. With the success of community-led activism in France, Bulgaria, Australia, the United States and all around the world, I have no doubt that we will keep the frackers from our land.”

Andi Walsh from Frack Off added: “Balcombe joins communities at Airth near Falkirk fighting coal bed methane, residents in Lancashire fighting shale gas and towns and village along the north east coast from Alnwick to Sunderland fighting underground coal gasification.

“When it comes to issues like fracking, where human health and our shared environment are under threat, we have to question whether those in power are even capable of putting the interests of the general public first.”

Mr Fallon told Parliament this week: "The Environment Agency will require disclosure of all substances proposed for injection into groundwater that might affect the water, and it will only approve the use of those chemicals if they are assessed as harmless in that context".

Shadow energy Minister Tom Greatrex warned that there was no proof that any shale oil bonanza would reduce gas prices. “Suggestions there is going to be cheap gas to extrapolate the US experience doesn’t stand up to much scrutiny, given the way gas is traded,” he said.

The impact of shale gas upon climate change is estimated to be greater than the use of conventional natural gas because of the risk of so-called fugitive emissions escaping through geological strata.

Picture: Frack Off campaign

Community bribes to host nuclear are one fifth those for wind farms

Ecotricity founder Dale Vince said: “This is a further move by the Government to rig the energy market against renewables in favour of nuclear and gas". 

The Government is rigging the energy market after its announced nuclear power would pay five times less than wind energy in community benefit.

Ministers announced yesterday that communities around eight sites (Hinkley Point, Sizewell, Wylfa, Oldbury, Sellafield, Bradwell, Heysham, and Hartlepool) in England and Wales could be in line to receive benefits - otherwise known as bribes - worth up to £1000/MW over 40 years from when and if nuclear power stations sited there begin operating. 

The founder of leading renewable energy supplier Ecotricity, Dale Vince, said: “This is a further move by the Government to rig the energy market against renewables in favour of nuclear and gas. Nuclear power is already being fast-tracked through the planning system and today they’ve announced nuclear will pay a fraction of the community benefit paid by wind power.”

On July 6 the Government announced that onshore wind farms should pay £5,000/MW in community benefit – an increase of five fold. At that time Mr Vince said: “Will we see the same logic being applied to the new generation of gas plants and nuclear power stations? This is a slippery slope.”

Dr Doug Parr, Chief Scientist at Greenpeace UK, commented: “Whilst wind farms and even shale gas developers have to pay community benefits, only nuclear stations will get a fat taxpayer subsidy to fund them. 

"Our entire energy policy is now absurdly distorted by the desperation to prop up EDF’s faltering Hinkley C project, with the government piling the costs onto the taxpayer to avoid the embarrassment of admitting they backed the wrong technology. We can’t go on like this.”

Dale Vince added: “This shows the Government’s approach to energy policy. Firstly, to fast-track planning for nuclear and gas; secondly, allowing nuclear to pay community benefit that’s one fifth the cost burden of wind power; and thirdly, the new mechanism of financial support (Contracts for Difference), which it’s widely believed will be two to three times higher for nuclear when compared to onshore wind.

“When you put those three parts together it shows an energy market being rigged. The Government shouldn’t be picking winners in the energy industry, they should be providing a level playing field for competition. Are they really saying the impact of nuclear power in one fifth that of wind power?

“After 25 years, windmills are removed and the land returned to nature. The impact of nuclear power remains for hundreds of years and those sites will stay radioactive and never be safe."

The Government is clearly only thinking short term. What happens after 40 years is up and the site is radioactive?

Its motivation is the expected creation of employment, which it estimates as "up to 40,000 jobs in the sector" but crucially "at its peak", ie during the construction phase.  

Its nuclear industrial strategy sets out the basis for a long-term partnership between government and industry to exploit those opportunities.

But communities hosting nuclear sites will be left with the toxic legacy long after these benefits have been forgotten.

German heavy energy users to be exempt from ETS costs

The UK Government is currently consulting on its proposals for compensating heavy industry from costs incurred by Contracts for Difference.

Energy-intensive industries such as steel and cement makers in Germany will be compensated for higher electricity costs due to the EU Emissions Trading Scheme (ETS), following a decision by the European Commission yesterday.

The decision paves the way for similar one on state aid proposed by the Treasury for costs generated by Contracts for Difference under Electricity Market Reform proposals.

Heavy energy users have been lobbying furiously for such support in order to prevent what is called 'carbon leakage', or the transfer of the same industrial activities to less regulated parts of the world as a result of the higher costs of operating in Europe due to the ETS.

A statement from the European Commission said: "The Commission's investigation found that the scheme... would effectively prevent carbon leakage while keeping competition distortions to a minimum".

A proposal for a separate €40 million compensation scheme for non-ferrous metal producers in Germany, which that nation introduced unilaterally in 2009, was rejected by the EU executive.

It argued that the German government had not provided sufficient evidence to support a case that carbon leakage had occurred and that "would favour very selectively only eleven German beneficiaries to the detriment of competitors in the internal market".

The approved scheme is back-dateable to January 2013 and also relates to support offered in Germany.

The Commission's investigation found that the scheme, "in applying the harmonised methodology of the ETS guidelines, would effectively prevent carbon leakage while keeping competition distortions to a minimum".

In May 2012, the Commission adopted guidelines on how Member States can support industry in the context of the Emissions Trading Scheme (ETS).

British proposals for a similar scheme to exempt energy-intensive industries from the costs of Contracts for Difference (CfD) are contained in an amendment to the EMR bill, currently out for consultation.

Under this Government-regulated scheme, energy suppliers would not add the costs of CfDs to the charges made for the supply of electricity to high energy users, and has been constructed using five principles. It would:

be targeted at companies that are both electricity intensive and trade intensive

minimise distortions within the UK economy;

avoid perverse incentives, e.g. discouraging take-up of energy efficiency measures;

minimise the administrative burden for all parties;

minimise the costs to consumers outside of the scope of the exemption (both business and household) whilst meeting the policy objective.

The Government has already set out the eligibility for compensation from the indirect costs of the EU Emissions Trading Scheme (EU ETS), based on European Commission guidelines.

It is also lobbying Brussels for urgent structural reform of the ETS, arguing that the best way to address carbon leakage would be an ambitious international climate agreement. This would create a level playing field for industry inside and outside the EU.

However, the Government meanwhile supports the allocation of free allowances under the ETS, in the absence of a global climate agreement, as it "gives relief to sectors at significant risk of direct carbon leakage, without raising barriers to international trade".

Image from thinkstock

Caption: The Government is currently consulting on its proposals for compensating heavy industry from costs incurred by Contracts for Difference.

Severn Trent goes self-sufficient in renewable gas

An example of Malmberg’s double container COMPACT plant, which is used in the upgrading of biogas to biomethane through the ‘water washing process’.

Work will soon start on the largest fully commercial gas-to-grid plant to be built in the UK to date, which will purify sewage gas on behalf of Severn Trent Water.

When completed, it will process up to 1500m3 per hour of renewable biogas to a state at which it can be safely injected into the national gas grid and make the water company self-sufficient in gas.

Imtech Waste, Water and Energy (Imtech) has been awarded the contract, worth an estimated £6.4 million, by Severn Trent Water to construct the Minworth Gas-to-Grid plant. The project will run for 60 weeks.

This project has only been made financially viable following the recent introduction of the Government’s Renewable Heat Incentive scheme.

Its award has resulted in job creation at Imtech, with a number of new team members employed specifically for this high profile project, including project management, QS and engineering positions, as well as several general site staff jobs.

Commented Nick Small, operations manager at Imtech: “We are extremely pleased to have been awarded such a high profile contract, which represents a significant step change for the waste industry in the UK.

"Severn Trent is already the UK’s largest producer of electricity from sewage gas producing 192GWh in 2012/13, and with the help of Imtech this will enable Severn Trent to become totally self sufficient in gas demand."

The project represents another key milestone in the development of the Waste and Energy business at Imtech, after it recently began work on a prestigious contract to develop the Wakefield AD biogas plant with Shanks Waste Management. This is part of a wider agreed plan to reduce the landfill diversion rate of Wakefield district waste by 90%.

The production of grid-quality biogas from sewage is not without technical problems, but a partial solution to these has been found at Cranfield University, which, earlier this month, received an award for its research in this area.

The research was recognised by the Worshipful Company of Engineers for excellence in engineering that benefits the environment.

It was awarded for looking at the most effective methods for removing chemicals called siloxanes from the process. Siloxanes end up in sewage because they are widely used to soften, smooth, and moisten, in products such as shampoos and moisturisers.

But they do not decompose in the sewage system, and so find their way into the waste matter that remains following the sewage treatment process. They then turn into silicon dioxide, or sand, during the process of burning this waste for biogas and ‘green energy’, which can block engines and cause costly damage.

PhD student Caroline Hepburn, whose research is funded by Severn Trent Water, was presented with the Hawley Award and a cheque for £5,000 at the Worshipful Company of Engineers’ Annual Awards Dinner, on 9 July by Sir George Cox, Board Member of NYSE-Euronext and Director of Shorts, the aerospace company.

Pic from Imtech

An example of Malmberg’s double container COMPACT plant, which is used in the upgrading of biogas to biomethane through the ‘water washing process’.

New report plots way to zero carbon Britain

Tobi Kellner, Zero Carbon Britain's energy modeller, said: "A lot of people say it can't be done but, actually, we looked into it, we did the research very thoroughly, and we say it is possible".

Leading environmental charity, the Centre for Alternative Technology (CAT), has released an update of its Zero Carbon Britain scenario called Rethinking the Future, in which it attempts to show that it's possible for the UK to decarbonise rapidly using the current level of technological development.

The Zero Carbon Britain modelling suggests that the variability of solar and wind energy sources can be accommodated by using carbon-neutral synthetic gas as a back-up, but achieving zero greenhouse gas emissions requires a shift in the nation's diet and transport habits.

The researchers claim that this will also be healthier and enhance biodiversity while cutting emissions from land use and agriculture, and that these proposed changes will generate over a million new jobs.

Speaking at the launch during the final sitting of the All Party Parliamentary Climate Change Group this morning, its chair, Joan Walley, said: “by setting out what a low carbon world would look like this report shows that the solutions to our problems do exist and all that is needed is the political will to implement them”.

Paul Allen, Project Co-ordinator, added that: “The fact that we can demonstrate that rapid decarbonisation is possible with current technology, and without significant lifestyle changes, should be a major call to action”.

Zero Carbon Britain: Rethinking the Future synthesises cutting-edge research across multiple disciplines to map a comprehensive and technically realistic scenario for the UK.

The model suggests a 60% cut in energy demand is feasible, with over half of the remaining annual energy supplied from the wind; the rest is produced from a suite of renewable resources suitable for the UK, including liquid fuels derived from biomass grown in the UK.

UK hourly weather data from the last ten years (87,648 hours) was used to model electricity demand and renewable energy supplies. Even though both demand and supply are highly variable, over the ten years modelled, electricity demand is satisfied directly over 80% of the time.

The rest of the time, back-up generation can be provided using surplus electricity and biomass from UK grown second-generation energy crops to produce carbon neutral synthetic gas, which can then be burned as and when necessary in gas power stations. The flexibility of this back-up generation is considered to be important, since making baseload power available only leads to a costly overproduction of energy at times when demand is already met.

In the modelling, this back-up provides only 3% of the total annual electricity required by the UK, but is crucial to ‘keep the lights on’ at all times.

On agriculture and diet, the report finds that "By reducing the amount and altering the balance of foods we eat to be in line with UK government health recommendations (fewer foods high in saturated fats, sugar, and salt (HFSS foods), and decreasing meat and dairy consumption, and by reducing food waste, greenhouse gas emissions from agriculture can be cut by almost 75%", reducing the amount of agricultural land required.

Alice Hooker-Stroud, Research Co-ordinator, said: "The fact that a healthy diet is also lower in greenhouse gas emissions, and uses less land is a win-win-win situation that should be supported throughout society".

Paul Allen, also director of the Centre for Alternative Technology, told me that current energy policy doesn't account for the external costs of burning fossil fuels.

"We must also bear in mind that 'business as usual' has not calculated the cost of taking [World average temperatures] above 2 degrees [the value agreed by 200 nations at climate change talks to be dangerous]. The adaptation costs would be very high indeed, also we would have to deal with higher global temperatures under conditions of post peak oil prices," he said.

When asked whether the proposed developments had been costed out, he said this would be the subject of the next round of research, using data generated by the New Economics Foundation. "But as an approximation, we are confident that if fossil fuel energy embraces all the costs currently externalised by the market systems, and if we include the economies of scale, ZCB will prove an effective investment, especially as, once the systems are in place, the energy supply costs are not volatile like oil and gas."

He continued: "A lot of Britain's energy infrastructure is coming to the end of its design life. We need to replace it and we do not want to lock ourselves into the wrong energy path. Now is the time to have that critical debate about what are our energy sources and the means of using energy that we will need for the 21st Century."

Regarding the modelling used, he added that "The purpose of this iteration has really been to answer the question "what happens if the UK is becalmed at minus 17 degrees under peak load" So we have vastly increased the detail in the energy model to be able to answer this question fully. We have used 10 years of hourly real meteorological data to model shits in demand and we have scaled up real output from offshore wind farms, again driven by the same data."

Picture from Zero Carbon Britain

Investment funds divested from fossil fuels "will perform better"

The author of the influential Stern Review on the Economics of Climate Change is also calling for Europe to decarbonise the power sector by the 2030s.

Research by leading investment and asset management firm has shown that fund managers divesting fossil fuels from their portfolios, and replacing them with an actively managed portfolio of renewable energy and energy efficiency stocks, will reduce risk and achieve positive financial benefits.

The conclusion will support a call issued last Friday by Lord Nicholas Stern for Europe to "re-ignite growth by investing in the transition to a low carbon economy".

The author of the influential Stern Review on the Economics of Climate Change, said in his statement that "low-carbon growth is the only credible medium-term growth strategy" and called for a European goal of decarbonising the power sector by the 2030s.

Pressure is building on institutional investors to assess their exposure to companies that extract fossil fuels, as concerns rise about the likely effects on the climate from greenhouse gas emissions.

In parallel, financial analysts are increasingly warning investors of the risks that tighter regulations on carbon dioxide emissions and falling demand for fossil fuels could make fossil fuel reserves substantially less valuable, or even ‘stranded’, and ultimately rendered worthless.

Impax Asset Management, which won the Sustainable Investor of the Year accolade at the FT/IFC Sustainable Finance Awards last month, has assessed the relative performance over the last seven years, in terms of returns and volatility, of four alternative portfolio structures.

Its analysis of the historical data found that, over the past seven years, eliminating the fossil fuel sector from a global benchmark index would actually have had a small positive return effect.

Furthermore, much of the economic effect of excluding fossil fuel stocks could have been replicated with ‘fossil free’ energy portfolios consisting of energy efficiency and renewable energy stocks, with limited additional tracking error and improved returns.

The four alternative scenarios were:

a completely fossil free portfolio: based on the MSCI (formerly Morgan Stanley Capital International) World Index without the fossil fuel energy sector;

fossil free plus alternative energy 'passive' portfolio: replacing the fossil fuel stocks of the MSCI World Index with a passive allocation to renewable energy and energy efficiency stocks;

fossil free plus alternative energy 'active' portfolio: as [2] but actively managing the portfolio;

fossil free plus environmental opportunities 'active' portfolio: as [2] but actively managing a portfolio of stocks selected from a wider range of resource optimisation and environmental investment opportunities.

The best performing alternative was [3]. As a result, the company believes that investors should consider reorienting their portfolios towards low carbon energy by replacing fossil fuel stocks with energy efficiency and renewable energy investments.

The announcement follows news last week of two more financial institutions, Storebrand and Rabobank, divesting from fossil fuels.

Awarding the Sustainable Investor of the Year to Impax in June, Martin Dickson, US Managing Editor of the Financial Times and co-chair of the Sustainable Finance Awards judging panel, said: “The world faces not only persistent economic uncertainty but also unparalleled resource constraints that are putting pressure on social systems across both developed and emerging markets. This situation makes sustainable investment, and these awards, even more relevant.”

Managers of college endowments and municipal and state pension funds are increasingly finding themselves the target of fossil fuel divestment campaigns from within US universities, similar to the calls for divestment of stocks of companies that supported apartheid in the 1980s.

The Fossil Free campaign maintains that it is “morally wrong to profit by investing in companies that are causing the climate crisis”.

Independently, mainstream analysts are now building on research from the Carbon Tracker Initiative, which has warned that regulations to limit carbon emissions could significantly impact the market value of fossil energy companies as it becomes uneconomic to extract their reserves.

It calculates that 80% of the world’s proven fossil fuel reserves cannot be consumed without exceeding the international target to keep global warming to within 2°C above pre-industrial levels, implying that the world’s listed fossil fuel companies, whose share prices are partly based on their proven reserves, are grossly overvalued.

These mainstream analysts include:

HSBC, whose oil and gas analysts warned that European energy companies could see their market capitalisation fall 40-60% if oil prices drop to $50/barrel, as a consequence of climate policies commensurate with the 2°C goal;

Citi, which examined the value at risk from climate policies among Australian extractive companies within the ASX200 index;

Standard & Poor’s, which predicted that smaller oil companies, especially those heavily exposed to high-cost unconventional oil production, could face credit downgrades within a few years under its ‘stressed’ carbon reduction scenario;

and Aviva Investors, Bunge, Climate Change Capital and HSBC, which are funding research at Oxford University’s Smith School of Enterprise & Environment into risks posed to investors by high-carbon stranded assets.

The Impax report concludes: "Given the growing consensus around climate change science, it is rational for investors to expect much tighter carbon regulation, with profound economic effects, in many regions of the world. These regulations ... are only moving in one direction: towards a lower carbon world."

Picture from Wikimedia
caption: The author of the influential Stern Review on the Economics of Climate Change is also calling for Europe to decarbonise the power sector by the 2030s.

Energy storage: the next growth market in US and Europe

Energy storage is the currently missing link that will enable the intermittent renewable energy sources like wind and solar to play a much greater part in the future grid mix.

Now that more homes and businesses are installing photovoltaic systems, a new trend for combining these with battery backup is emerging.

Previously, battery storage systems were only thought necessary with solar PV and wind in stand-alone systems, separate from any grid connection, but as the grid supports more and more PV and wind systems, which can supply power only at certain times, the need for storage backup is becoming more apparent.

For large commercial installations this is especially attractive because, although they may have negotiated contracts with utilities that bring down their overall electricity rates, the fees that they are charged for the times when they do draw power, which can be based on their highest peak energy use during a month, have been rising as much as 10-12% per year.

According to Marcus Elsässer and other executives attending the Intersolar North America 2013 trade show held over the last three days, large commercial electricity users can reduce their peak demand and lower their demand charges by installing a storage system alongside a PV system.

Last month California set a proposed 2020 procurement target of 1.3GW of battery storage for network operators.

In Germany, grants from a scheme with a total value of €25 million are being offered to offer storage to existing solar installations.

Last month's Intersolar Europe trade show consequently saw over 200 exhibitors, including major brands, presenting their storage and smart grid solutions.

There, energy storage systems had their own dedicated section for the first time in any global energy trade fair. This particular show, the largest in the world for the solar industry, was attended by over 50,000 visitors from 47 different countries.

Energy storage plus PV was a key topic, with reference to many different types of storage, not just batteries, including flywheels, capacitors, heat storage and compressed air.

The German support scheme is managed by the state KfW Group bank, which provides a 600€/KW grant for new PV systems and 660€/KW grant for older systems. To receive support, systems must be in Germany, have a duration of at least five years, and no more than 60% of the installed power can be fed to the grid.

According to ">Ash Sharma of IMS Research, by 2017 the storage market is projected to be worth $19 billion, mainly due to the German scheme being taken up by residential system owners and operators of small systems up to 10 kWp.

As a whole, photovoltaic storage installations will, on average, he says, grow by over 100% for the next five years, up to nearly 7GW, rising to 40GW of battery systems by 2033.

Will this catch on here? The UK Department of Energy and Climate Change (DECC) is currently reviewing energy storage demonstrator proposals entered into a £17 million procurement competition.

There is a wide variety of entrants including some seemingly bizarre technologies: hybrid batteries to grid, smart energy storage, a radical proposal for using surplus energy to lift heavy aggregates that would be allowed to descend and generate energy at times of peak demand, flywheels, the use of electric vehicles for storage, liquid air, the conversion of surplus electricity into methane, cryogenic liquid nitrogen energy storage, and industrial scale lithium ion batteries.

A further potential winner under this scheme is Moixa Technology, an EU pioneer of smart direct current (DC) technologies, which has submitted a bid to install Maslow storage technology across 750 homes.

It works by shifting DC (direct current) loads from lighting, communications and electronic devices, to batteries during low tariff times, charged using local renewable sources such as solar PV, or at times of excess, wind power.

Simon Daniel, the CEO of Moixa, commented on the need for storage: “Just this week, the volatility of solar and wind resources created negative electricity prices and renewable curtailment in parts of Europe".

He says British distribution network operators face similar issues, especially at times of high sunshine, as now, or high winds. Daniel says that without using energy storage "considerable infrastructure upgrade costs, to reduce voltage issues caused by rising solar PV adoption" could result "which could otherwise lead to local blackouts or lost renewable revenue”.

He continued: “We’ve estimated that by using Maslow distributed energy storage systems with local solar PV, excess wind supply and low overnight energy prices, energy bills could be reduced by up to 30%, and keep essential consumer devices online if the grid fails”.

According to Anthony Price, director of the Electricity Storage Network, Britain should aim for an energy storage target of 2020MW (2.02GW) by 2020.

Speaking at the recent energy storage conference organised by the Institution of Mechanical Engineers, he said: “Meeting Britain’s power requirements requires energy storage as well as generating capacity. The expected shortfall in reliable generating capacity has been caused, in part, by a lack of commitment to a balanced portfolio of generation, storage and network investment.

"Adding more electricity storage into the power system will bring real long term benefits."

Sounds like a good bet for investors to me.

Renewable Heat Incentive launch set for next Spring

Solar thermal is one of the most affordable renewable technologies and the Solar Trade Association is looking forward to boom time.

Details of the domestic Renewable Heat Incentive (RHI) and related tariff levels have been announced by the Department of Energy and Climate Change (DECC), but anticipated news about the future of the non-domestic RHI has been postponed.

The domestic RHI will launch next Spring. As has always been promised, anyone who has installed a system since 15 July 2009 can claim retrospectively, as long as they meet the Microgeneration Certification Scheme (MCS) standards that applied at the time of installation.

DECC has confirmed the tariff levels for all four eligible technologies. These will be:

• Flat plate and evacuated tube solar thermal panels: at least 19.2p/kWh


• Ground (and water) source heat pumps: 18.8p/kWh


• Air to water heat pumps : 7.3p/kWh


• Biomass-only boilers and biomass pellet stoves with back boilers: 12.2p/kWh.

Payments will be made on a quarterly basis over a period of seven years. Householders who have already received vouchers under the Renewable Heat Premium Payment scheme will be transferred to the RHI and have their value deducted from their RHI payments.

Applicants will need to complete a Green Deal assessment to reduce their energy demand to a certain level in order to qualify for the payments.

Private landlords and providers of social housing will be able to apply for a property or properties that they own (provided they own the heating system). The landlord will receive the RHI payments.

For Local Authorities who use Arm’s Length Managed Organisations (ALMOs) to manage their properties, the application must come from the owner of the heating system.

New build properties will not be eligible for the scheme. The Renewable Energy Association said this "reinforces the need for the government to set demanding carbon compliance standards in the 2013 revision of the Building Regulations Part L, due for imminent release by DCLG".

People will not be able to claim for more than one space heating renewable heating system in the same property, with the exception of installations of solar thermal and another eligible technology.

Climate change minister, Greg Barker, said: “Investing for the long term in new renewable heat technologies will mean cleaner energy and cheaper bills. So this package of measures is a big step forward in our drive to get innovative renewable heating kit in our homes.

“Householders can now invest in a range of exciting heating technologies knowing how much the tariff will be for different renewable heat technologies and benefit from the clean green heat produced. We are also sending a clear signal to industry that the coalition is 110% committed to boosting and sustaining growth in this sector.”

DECC gives an example of what an installer might receive, in the case of a biomass boiler which might cost, say, £8,000 to install. In a year, the estimated heat use could be around 15,000kWh, which, at a 12.2p/kWh tariff, would result in a payment of £1,830. This would mean it might pay for itself in around five years.

New installations of biomass systems will need to meet air quality standards in relation to particulate matter (PM) and oxides of nitrogen (NOx).

Ofgem will be responsible for administering the scheme when it launches.

The RHI is funded directly from Government spending and has been given annual budgets. There are worries that, as with the payments for Feed-in Tarriff PV systems, they might unexpectedly decrease in the future. DECC will make an announcement on this around the time of the launch.

The news was welcomed by trade body the Heating & Hotwater Industry Council, whose director, Roger Webb, said: “it gives the industry confidence to invest in renewable heating products helping to protect and create jobs. We would of course like the tariffs to be higher but we understand the difficulty of introducing a government funded scheme in the current economic climate," he added.

"We will also be urging DECC to monitor uptake and if necessary to increase tariffs if they are not driving up product sales.”

Stuart Elmes, Chair of the Solar Trade Association's solar thermal working group, called the announcement “a massive boost for the solar thermal market. The value of this incentive is on a whole new level, there’s nothing like it anywhere in the world. From now on people can install solar heating with confidence that their system will be able to join the RHI scheme, and knowing what their payments will be worth.”

Solar thermal is one of the most affordable renewable technologies for homeowners, with a typical system costing around £4,500. This includes the replacement of an old hot water cylinder with a well-insulated solar cylinder.

Solar thermal systems are relatively small and appropriate for partially shaded roofs or those with limited space. A typical system will provide over half the hot water needs of the average home.

Paul Barwell, Chief Executive of the STA, said: “This announcement today is a major success for the STA. Our team has worked very closely with DECC over an extended period in an effort to ensure that the benefits of solar thermal are adequately recognised in the domestic RHI.

"In particular we have helped to drive a deeming calculation based on true occupancy that better reflects hot water usage in the home. The exceptional technical expertise of Stuart Elmes has been invaluable to our efforts.”

Ground source heat pump manufacturer Kensa's Managing Director, and Chairman of the Ground Source Heat Pump Association, Simon Lomax, said that the "Domestic RHI announcement made today, three and a half years after the initial consultation, is disappointingly short on detail."

Tim Minett, chief executive of CPL Industries, a supplier of biomass systems and wood pellet distributor, said he was “surprised the Government is offering more for other technologies but still expect biomass systems will be the most popular by far.

"They are the easiest to retrofit to properties, simple to use and work in all weather conditions – a big factor in the UK – while 12.2p/kWh will cover the cost of installation, lower people’s fuel bills and provide regular income for years to come. What’s not to like about that? “The domestic RHI should be hugely popular as a fifth of the UK’s housing stock is not connected to the gas grid," but he added, "the chief stumbling block is lack of awareness among the public so what we desperately need now is for the Government to step up and promote the scheme vigorously.”

Brian Smithers, European Director, Rexel, agreed, adding: "it is also in the industry’s interest to drive awareness by educating consumers".

Non-domestic RHI decision postponement

At the same time as making the announcement about the domestic RHI, the Government said it was delaying a decision on expanding the non-domestic RHI scheme, which has been operating for over two years, until the autumn, a full year after the proposals were originally released in September 2012.

Industry response was to express disappointment. The Combined Heat and Power Association said the continuing lack of clarity and certainty is "unhelpful for the hundreds of millions of pounds of renewable heat projects currently under development".

Last year the CHP industry welcomed the proposals to expand the RHI scheme to include tailored support for heat produced from biomass and bioliquid CHP. The proposals highlighted recognition within Government that biomass CHP is the most optimal use for limited biomass resources.

Dr Tim Rotheray, Head of Policy and Communications at the CHPA said: "It is absolutely crucial that the Government now provide clarity and certainty. The Government’s proposals for a CHP-specific rate under the RHI is driving renewable heat projects around the country, and a clear, quick decision will help lock in these investments, lock in the jobs these investments will provide, and lock in our ability to meet our renewable heat targets with highly efficient renewable CHP.”

He did, however, welcome the boost to investor confidence given by the Government's decision, also just announced, to grandfather existing renewable CHP schemes from changes to its quality assurance programme.

The biofuel-industry trade body, the Renewable Energy Association, called the delay "disappointing", but welcomed the announcement on the domestic RHI.

The same response came from the Anaerobic Digestion and Biogas Association's chief executive, Charlotte Morton, who called it "very disappointing for AD developers and operators. Making good use of heat from AD plants makes sense for operators, and will help the government deliver renewable energy targets," she added.

"The (non-domestic) RHI is currently well below its projected budget and another delay will simply make it harder for our members to deliver the projects government wants to see.

"DECC could help resolve this by giving developers clarity over the eligibility date, which would allow projects to start generating and using renewable heat if they have commissioned their plant within a set period," she concluded.

Large companies to be forced to implement energy efficiency

Shadow Chancellor Ed Balls last night criticised the Government for not doing enough to promote energy efficiency.

Proposals for an Energy Savings Opportunity Scheme (ESOS) have been published by the Government that will make it compulsory for large companies to undertake energy audits.

The aim is to enable companies to identify opportunities for saving on their energy bills through improved energy efficiency. The Department for Energy and Climate Change (DECC) estimates that up to £1.9 billion could be saved.

The proposals form part of the Government's implementation of the EU Energy Efficiency Directive, under which large enterprises have to identify cost-effective ways to invest in energy efficiency. These ESOS assessments will be carried out by approved assessors.

The proposed scheme would apply to all large enterprises in the UK, including charities and any other UK organisations outside the public sector, if sufficiently large. Small and medium enterprises (SMEs) will not be required to participate, unless they are part of a large corporate group enterprise, but could do so on a voluntary basis.

An ESOS assessment would undertake a review of the total energy use and energy efficiency of the organisation, including the measurement of an energy intensity ratio (e.g. energy use per employee or per unit of output) and, as appropriate, considering the variation in energy use over time within key buildings, key industrial operations, and key transport activities (exempting de minimis energy use).

The review would need to be proportionate and sufficiently representative “to permit the drawing of a reliable picture of overall energy performance” of the organisation and present clear information on potential savings, which identify and quantify cost-effective energy savings opportunities.

These should be, wherever practical, based on life cycle assessments (LCA) instead of simple payback periods (SPP), as the former are more realistic.

All procedures for doing this are outlined under the international standard for energy management, ISO 50001, with which all energy and facility managers are encouraged to become competent.

The Government has come under sustained criticism recently for failing to do enough to promote energy efficiency.

Last night, speaking at a Green Alliance event, promoting their report, which said that £180 billion of new infrastructure is at risk without political leadership, the Shadow Chancellor, Ed Balls, promised that Labour, if elected, would set a decarbonisation target and do more to promote energy efficiency.

He attacked the Chancellor George Osborne for “scaring away” green investment in infrastructure and energy efficiency.

He said that on energy efficiency the government had “failed to deliver. The construction industry is crying out for clarity on the next steps in Labour’s successful zero-carbon homes strategy. The Green Deal, which replaced previous successful domestic energy efficiency schemes, has so far helped just four households this year".

He added: "We will also put an end to the mixed signals that are causing confusion and deterring investment by posing a false choice between gas and renewable energy. We support efforts to secure new domestic gas supply, although there are real environmental concerns that must be addressed. We will need a secure gas supply in the decades ahead.

"But while 'fracking' has had a major impact on energy prices in the US, most experts believe any impact in Europe is uncertain at best. Any balanced and low-carbon energy strategy for the years ahead will need gas, renewable energy and, in our view, nuclear too," he concluded.

DECC's consultation will close on 3 October 2013.


Shadow Chancellor Ed Balls last night criticised the Government for not doing enough to promote energy efficiency.

€22 billion EC R&D package to support low carbon industries

Máire Geoghegan-Quinn, European Commissioner for Research, Innovation and Science, said that the partnerships will underpin growth and jobs in key sectors of a knowledge-based European economy.

The European Commission has announced a €22 billion Innovation Investment Package for sectors including fuel cells and hydrogen, biofuels and cleaner, quieter aircraft.

In total, more than half of the money will go to low carbon industries.

The programme intends that over the next seven years, the EU's contribution of €8 billion will mobilise €10 billion from the private sector and close to €4 billion from Member States.

It will be accomplished through the establishment of a series of public-private partnerships under the

These are in form of Joint Technology Initiatives (JTIs) between the EU and industry to provide vital funding for large-scale, longer-term and high risk/reward research.

They set out commitments, including financial commitments, and address strategic technologies that will underpin growth and jobs in key sectors of a knowledge-based European economy. Over four million Europeans are currently employed in these sectors.

The initiative will help make Europe a more attractive location for international companies to invest and innovation and contribute to meeting many EU objectives, including 3% of GDP invested in R&D and 20% of GDP coming from manufacturing by 2020.

Máire Geoghegan-Quinn, European Commissioner for Research, Innovation and Science, said at a press conference that many of the EU's competitors are investing faster and they are thinking big. "There need to bolster both public and private spending if we are to stay in, never mind ahead of the game," she said.

Most of the investment will come through five JTIs:

1. Clean Sky 2 (CS2): to develop cleaner, quieter aircraft with significantly less CO2 emissions;


2. Innovative Medicines 2 (IMI2): to develop next generation vaccines, medicines and treatments, such as new antibiotics;


3. Fuel Cells and Hydrogen 2 (FCH2): to expand the use of clean and efficient technologies in transport, industry and energy;


4. Bio-based Industries (BBI): to use renewable natural resources and innovative technologies for greener everyday products;


5. Electronics (ECSEL): to boost Europe’s electronics manufacturing capabilities.

The Commission is also proposing to extend the SESAR (Single European Sky ATM Research), which aims to modernise Air Traffic Management in Europe.

The public-private partnership of the Biobased Industries Consortium (BIC), a cross-sector group of 48 large and small companies, is worth €3.8 billion; it will accelerate the deployment of biobased products in Europe by 2020.

"This is a unique partnership that places sustainability at the heart of all economic, social and industrial activities," said Berry Wiersum, chief executive of Sappi, a global paper company. "It is about realising the untapped potential of biomass and waste, to deliver sustainable growth in Europe."

Guy Talbourdet, chief executive of Roquette Frères, said that BIC comes at a critical time for European development of the bioeconomy. "It will accelerate the market entry of new biobased products 'made in Europe' in the so-called biorefineries. The use of locally grown biomass will not only enable growth and jobs in rural areas across European regions, but it will also reduce the EU's reliance on fossil or proteins imports."

The Proposal for a Council Regulation on the Fuel Cells and Hydrogen 2 Joint Undertaking will expand the use of clean and efficient technologies in transport, industry and energy and improve energy security in Europe.

NEW-IG (New Energy World Industry Grouping), the leading European industrial association, that represents much of Europe’s hydrogen and fuel cell industry, acknowledged that some 150 projects and over 430 industry and research organisations have already won support under the current programme.

This will now be continued under the new proposals, which will step up activities with a €1.4 billion budget until 2020. Pierre-Etienne Franc, Chairman of the Board of NEW-IG called the announcement “a sign that Europe will strive to establish this technology as a key enabler for its future energy and transport roadmap. Joint priority setting and a long term perspective are key to enabling private investment in such complex, societal challenges.”

Màire Geoghegan-Quinn added: "Thanks to the current Fuel Cells and Hydrogen partnership, you can take a ride on hydrogen-powered pollution-free buses in five cities across Europe.

"But much research and development is still needed to make this application of FCH technology widespread and those for clean energy production and storage commercially attractive. The EU and industry will continue to work together under this new initiative to help reduce the carbon footprint of our energy and transport sectors."

Henri Winand, CEO of Intelligent Energy, observed, “This public-private partnership is testament to the very real possibilities of hydrogen as an important energy vector for more sustainable and competitive energy systems.”

The Commission's proposals are expected to be finalised and approved by the European Parliament by the beginning of 2014.

Fierce lobbying on biofuels criteria as EU cap passed

The bête noire of the bioethanol and biodiesel industry, Timothy Searchinger, argues that their use increases world hunger.

MEPs voted 43-26 in favour of a 5.5% cap on European support for biofuels, as new research showed that growing fuel crops in place of food creates more hunger and deforestation.

Today’s vote was on whether to endorse a strict cap on crop-based biofuels, to curb emissions from ‘indirect land use change’ (ILUC) caused by, for example, the clearing of forest to grow palms for oil.

Lobbying is fierce on all sides of the argument, as parts of the biofuels industry that have invested billions in securing first and second generation biofuel sources, now found to be harmful, fight to preserve the status quo. But other parts are in favour of the move and want it tightening further.

On the side against the cap are MPs in Humberside and East Yorkshire, where some of these companies are based, who are backing a campaign by the biofuel industry trade organisation, the Renewable Energy Association (REA).

REA's Head of Renewable Transport, Clare Wenner, argued: “If it was mandatory for all land-using industries to account for emissions from the direct conversion of land from one use to another, as the biofuels industry does already, then there would be no such thing as indirect land use change."

But new research throws up an additional problem: when agricultural land that has been used to grow food is converted to biofuels, food prices will go up causing some people to go hungry unless previously uncultivated land is made productive.

The research, by Princeton University researcher Timothy Searchinger (known as ‘the godfather of ILUC’), says, in his words: "Biofuels have almost doubled the rate of growth in demand for food, and the system is having a hard time keeping up. If demand growth stopped, prices would come down as farmers caught up, although their efforts to catch up will cause more land use change."

His latest analysis, produced with the help of the EU’s Joint Research Centre, of a report by the International Food Policy Research Institute (IFPRI), found that of every 100 calories from wheat or maize diverted to food tanks by bioethanol production, 25 calories were not replaced.

The European Renewable Ethanol Association, is also against the cap. “I wouldn’t expect anything good to come out of Searchinger,” said Rob Vierhout, its secretary-general. “Whatever he says, he is biased. He is not even a scientist. He is a lawyer and could defend any position you want him to.”

In a previous life, Searchinger was an attorney for the Environmental Defence Fund, and wrote a prize-winning book on wetlands that led work to protect the Everglades and Mississippi river.

Another lobby group, composed of the Chief Executive Officers of leading European biofuel producers and European airlines, called 'The Leaders of Sustainable Biofuels', is in favour of the cap and wants to ensure the market uptake of advanced sustainable biofuels by all transport sectors.

It issued a statement supporting EU policy to gradually phase in less harmful third generation biofuels and supporting the ILUC principle.

But it foresees a further threat lurking in a proposed extended list of feedstock that would be eligible for support as advanced biofuels, namely the use of animal fats and used cooking oil, palm oil residue/waste and any other food feedstock waste.

It says that were used palm oil to be supported in this way, it would be "absurd and counter-productive to the objectives of this legislation".

The long list of feedstock eligible for advanced biofuels, prepared by the EU Committee on Industry, Research and Energy (ITRE), includes a number of disputable raw materials which should, this group says, therefore be excluded from the definition because it would once more "open the door to unsustainable biofuels production from food and feed crops".

Looking forward, 2020 marks the deadline for 10% of EU's transport fuels to be sourced from renewable energies. Before then, by 1 July 2014, all new biofuels installations must meet a 60% greenhouse gas saving threshold and, by 1 December 2017, all biofuels installations in operation before 1 July 2014 must meet a greenhouse gas saving threshold of 35% and 50% a year later.

By the end of 2017, the Commission will submit a review of policy and best scientific evidence on ILUC to the European Parliament and Council.

After 2020, the European Commission will not support further subsidies to biofuels unless they can demonstrate "substantial greenhouse gas savings".

15,000 jobs at risk as official support for offshore wind wavers

The launch of the London Array last week saw David Cameron praising offshore wind: but will it deliver British jobs?

Britain is not making the most of its opportunity to become the ‘Saudi Arabia of offshore wind’, according to a new report from the think tank IPPR, putting up to 15,000 jobs at risk.

The report, entitled Pump Up The Volume, says the British Isles have ideal building conditions for offshore wind, with large areas of sovereign seabed in shallow waters and close to shore.

However, it warns that the Government is not making sufficient effort to bring down costs and secure British jobs.

Offshore wind is currently more expensive than unabated gas, onshore wind or nuclear. By 2020, the cost is expected to have fallen rapidly, but it will still be more expensive than those three technologies.

Only a small proportion of offshore wind farm components are built in the UK, varying from 10% for London Array Offshore wind farm, opened last week by David Cameron, 20% for Thanet Offshore wind farm, 48% for E.ON’s Scroby Sands development, 50% for Vattenfall’s Ormonde project and 32% for E.ON’s Robin Rigg development.

These figures do not include operational and maintenance costs, which are inherently local in nature and accumulate over the lifetime of a wind farm.

IPPR argues that the levels of British workers' contributions to offshore wind will need to increase in order to realise the economic benefits of the sector in terms of jobs and growth and to maintain political commitment.

Vince Cable's business department consulted earlier this year on the feasibility of achieving the Offshore Wind Developers Forum’s vision of 50% local content.

Observing that the Government has backtracked on its ambition to secure 18GW offshore wind by 2020 and expects instead just 4.4GW to come online between 2020 and 2030, the report points out that up to 15,000 jobs could consequently be lost that would otherwise have been created.

“The UK's current policy trajectory could see it achieving a ‘worst of all worlds’ outcome: low volume, low jobs, and high costs," said Will Straw, Associate Director at IPPR, launching the report.

Pointing out that there are cost reductions to be obtained from working at scale, he added: "Unless Britain 'pumps up the volume' there is little prospect of either bringing down the costs of offshore wind or creating domestic jobs. An alternative pathway is possible, if the Government can bring together an industrial strategy for the sector predicated on a combination of ‘carrots and sticks’".

He also reiterated the need for a 2030 decarbonisation target, which would give the industry "the long-term clarity that it needs, and which has been provided in other countries".

Instead, he said, "developers must be expected to drive down costs with a subsidy regime that reduces the strike price over time".

He also added that "developers and suppliers should do more to provide apprenticeships and sponsor university and FE courses” to meet the skills gap.

The report recommends that in order to build a strong domestic offshore wind supply chain, the Government needs to attract at least two turbine manufacturers, preferably more, to build factories. This "would be a major boost, as these companies are able to attract a cluster of other companies further down the supply chain (as is the case in Denmark)".

It must also, the report argues, continue to support and build upon the country's existing strengths in the supply chain, building on its expertise in both the onshore wind and the North Sea oil and gas industry, and should support export opportunities for British firms. A new EU renewables target would help create export markets to 2030.

On the issue of reduced ambition for offshore wind, DECC clearly stated in the 2011 UK Renewable Energy Roadmap that "up to 18GW of offshore wind could be deployed by 2020 ... with over 40GW possible by 2030".

In June of this year, however, they appeared to change their ambition by announcing that the subsidy regime would allow for just 8–16GW by 2020.

DECC’s ‘central scenario’, published last October, sets out a much less ambitious path, leading to just 11.5GW by 2020 and 16GW by 2030.

The government's watchdog, the Committee on Climate Change, believes that this latter scenario "would imply unacceptable costs and risks of achieving the 2050 [decarbonisation] target".

Both developers and suppliers are concerned. The industry argues that several ports need to be upgraded to provide construction and assembly facilities for the supply chain, but the port owners will not do so unless they are given government reassurances.

Meanwhile, in relation to the grid, the lack of a costing of risk allocation between the developers and the transmission operators could result in offshore wind being more expensive than it needs to be.

DECC has not yet responded to the report.