Wednesday, February 29, 2012

″All business should be green businesses″ says the Business Department

The head of a team at the Department for Business, Innovation & Skills, which leads Government work on how to develop the green economy, has said that "being green doesn't mean being anti-business, but pro-business".

Chris Pook, head of the new Green Economy Team at BIS, was addressing critics of Government policy who are concerned that the long term benefits of investment in the green economy are not worth the short term costs.

Speaking at the Low Carbon Communities for Future Growth conference at the QEII Centre in London today, Pook said that all business had a crucial role to play in the transition to a green economy, in developing jobs, skills and growth in environmental goods and services (EGS) and across the board.

Unusually, for nowadays, he quoted the Stern Review, commissioned by the Treasury under Gordon Brown but now archived on their web site, in which Nicholas Stern famously pronounced that the costs of doing nothing are far greater on the long term than investing now.

The Green Economy Team works with Local Enterprise Partnerships on low carbon/green innovation, green infrastructure, stimulation of supply chains and green low carbon clusters.

Over 80% of the 60,000+ companies identified as working in this sector are SMEs, and 30% are in manufacturing. BIS forecasts their growth rate as a staggering 45%.

"Sustainable growth is based on creating our energy and economic security," he said, "but the value of the environment is not often recognised by business or planning, meaning that we consume beyond the limits of resources."

The contradiction, he said, is that "a growing economy is the only way to secure the change".

But the impact will vary from sector to sector, and so "a strong sectoral perspective is required to understand how the impacts of investment fall across the economy".

There are some easy winners, and he quoted DECC's cost-benefit assessment MACC curve which shows, for example, that CERT, local travel and community energy saving are in this category but at the other end of the curve, the Renewable Heat Incentive (RHI), zero carbon homes and decarbonising car transport requires greater investment up front.

Under the Green Deal, for example, it will be the insulation and construction companies who will experience the greatest benefits, while the Energy Market Review and carbon price floor will help new renewable and nuclear generators, he said.

It is energy-intensive industries and tax and bill payers who have been complaining loudest about the cost of low carbon policy, but Pook said that the cost to them will still be less than the future cost of doing nothing at this point.

"In fact, the energy-intensive industries like steel and chemical sectors have a key role to play in the transition to a green economy, in, for example, providing the materials we need," he observed.

"If we were to source instead our raw materials abroad, it would result in a higher carbon footprint and it would be worse for the economy.

"The low carbon goods and services sector needs to capitalise on the growth opportunities presented."

BIS is fostering the Green Investment Bank and other government initiatives that will bolster the growth of the supply chain capability.

Pook said that BIS is talking to representatives of the different sectors and using economic levers such as the extra £1bn available under the Regional Growth Fund announced by the Deputy Prime Minister last week and the Catapult project to develop offshore renewables.

Pook acknowledged that setting out in greater clarity what materials and goods are to be required both from public procurement and as a result of legislation, helps industry to prepare for the future.

Green Deal

Also speaking at the conference, Phil Wynn Owen, Director General of International Climate Change and Energy Efficiency at the Department of Energy and Climate Change (DECC), said his department had been inundated with lobbying by manufacturers of energy efficiency equipment anxious to get on the approved list for funding under the Green Deal.

DECC officials are drawing up an eligibility list now.

Under the Green Deal, repayments of loans to investors ("like Kingfisher and supermarkets", Owen said) for energy efficiency work are "attached to the electricity meter" and must adhere to the 'Golden Rule'.

This rule is that costs of measures taken to save energy don't exceed the cost savings over time.

The worry is that the return on investment required will mean that many savings which ought to be made, won't be.

In response to questioning, Owen said that because of the Golden Rule, DECC "have to draw the line somewhere". which is tantamount to an admission that the eventual measures may not be up to what is required to limit carbon emissions and lift 2.5 million households out of fuel poverty.

Long payback measures like Solid Wall Insulation on hard-to-treat properties are intended to be covered and financed by the Energy Commitment Obligation, but the Association for the Conservation of Energy is convinced that this will leave thousands of homes missing out on measures that could reduce their bills.

Monday, February 27, 2012

Greenpeace's arguments against nuclear power

Here is some important text from a new Greenpeace document, Renewable energy is the future: nuclear energy is the past that sums up the arguments against nuclear power and for renewables.

Nuclear energy and the conflict with renewables 

The nuclear industry often claims that nuclear energy is needed to combat climate change.

This is wrong.

Research by Greenpeace and others shows that continuing to operate nuclear plants prevents the large-scale integration of renewable energy into the electricity grid.

Nuclear also channels investment away from renewables where investment can make a difference in fighting climate change.

The argument that nuclear power could help fight climate change is seriously flawed.

If the entire global fleet of reactors was quadrupled, a completely far-fetched scenario, this would lead to, at most, a 6% reduction in global CO2 emissions, and only after 2020, well beyond the deadline that climate scientists have set for avoiding catastrophic climate change.

A key problem with nuclear power is that it must run around the clock with a constant output capacity, which is called ‘baseload’.

The nuclear industry presents this as an advantage, which it is not.

First, a permanent power generation mode –̶ independent from the actual need in the power grid – is needed to generate as much electricity as possible to make generation costs low.

If the operational hours were reduced to half, the cost would double.

So the ‘baseload’ strategy is more an economic than a technical concept.

Second, unlike modern gas turbines, which can react within seconds to fluctuating demand in the electricity grid, nuclear power stations are unable to react to the demand curve, and demand must follow the operation mode of nuclear power plants.

This leads to the inefficient use of electricity.

In almost all countries with a winter heating demand, a large share of nuclear in their power mix goes hand in hand with the expansion of highly inefficient electrical heating systems.

For example, France, with about 80% nuclear in its power mix, had an overall power demand of 101GW on a cold day in February 2012, while Germany, which has 15 million more people than France, with 20% nuclear in its power mix had a demand of just over 50GW on the same cold day.

(Bunesnetzagentur – German Grid Authority – 9 February 2012).

Germany has far better insulated houses and a significantly lower share of electrical heating systems.

The inflexibility of nuclear reactors has a negative effect on renewables.

For technical and safety reasons, nuclear plants cannot easily be turned down so wind operators are often told to shut off their generators to give priority to electricity from nuclear plants, an economic and ecological mistake.

As a result, nuclear energy blocks the development of renewable energy technologies by commandeering space on the electricity grid and reducing income for wind operators.

Renewable power plants can be built much more quickly than nuclear and are safe.

In addition, renewables can replace several times more of the carbon that is leading to climate change for the same cost as nuclear and at a far faster pace.

At present, over 90% of the Japan’s reactors are offline. The rest may be offline by May 2012.

Given that only three of 54 reactors are operating and there have been no significant problems with the electricity supply, Japan has shown that it can survive without nuclear power.

Rip-off tactics of the Big Six energy suppliers

Having poorly insulated homes is not the only reason why some people are paying too much for their energy use.

New research from think tank ippr finds that people who use the same amount of energy and live in the same area are paying vastly different amounts for their energy because of the way they pay their bills.

They are calling for regulator Ofgem to clamp down on anti-competitive practices in the energy market.

Those who are on a ‘standard credit account’ (paying for their energy use in arrears) and are very unlikely to switch tariff or supplier, are most likely to be paying over the odds.

With more than 60% of all households having never switched energy supplier and 34% being on standard credit accounts, over five million may be being overcharged.

IPPR tested tariffs for British Gas, EDF, E.ON, Npower, Scottish Power and SSE for three different payment types using a price comparison website for properties in London, Sheffield, Dumfries in Scotland and Aberystwyth in Wales.

Across each, Scottish Power was found to consistently offer the greatest differential between their standard and cheapest tariff at over £330.

The difference was greatest in Sheffield at £339 and second greatest in London at £333.

Npower offered the second largest differential between these tariffs of up to £315. E.ON was £229.

Whilst British Gas, SSE and EDF all offered much smaller differentials of up to £126, £100 and £86 respectively, as a whole, the difference in the tariffs offered could not be justified solely by the cost of different payment methods.

Those who are vulnerable or on low incomes are overrepresented among the group at risk of being overcharged.

Nick Pearce, IPPR Director, said: “The loss-leading by some suppliers is limiting competition in the energy market by making it harder for small suppliers and new entrants to compete."

Call for Passivhaus standard to be adopted to beat fuel poverty and climate change

Thermal image of Passivhaus retrofit in a terrace, taken in January 2012, showing how much less heat it is leaking compared to its neighbours. Pic: bere:architects
Thermal image of Passivhaus retrofit in a terrace, taken in January 2012, showing how much less heat it is leaking compared to its neighbours. Pic: bere:architects

A consortium of local authorities and universities from five countries across the North Sea region is calling for a new EU target of a 40% reduction in primary energy demand by 2050 and adoption of the Passivhaus standard.

The existing target is a 20% improvement in energy efficiency by 2020, but the EU is currently on track to achieve only half of this.

The appeal comes in a report, written by Dr Bruce Tofield and Martin Ingham, from the University of East Anglia (UEA)’s Adapt Low Carbon Group, which concludes that radically improving the energy efficiency of new and existing buildings is key to reducing global greenhouse gas emissions, and Europe should be leading the way.

Passivhaus standard

A core strategy in their thinking is the use of the innovative Passivhaus concept for both new build and refurbishment, which can reduce energy use for heating and cooling buildings by 90% and is already in use in both new buildings and refurbishments in the UK.

Passivhaus, a standard originating in Germany, is primarily a tough Quality Assurance standard, which demands great attention to detail during the design and construction process to achieve certification.

It is especially valuable in helping to relieve fuel poverty, and so Passivhaus is increasingly being used in the social sector. Tenants who will be paying gas bills as low as £5 per month have just moved into the UK’s first social housing development to achieve the European PassivHaus standard. The scheme is at Wimbish near Saffron Walden in Essex.

Announcing the winner recently of a competition to create Passivhaus demonstration homes for the BRE Innovation Parks in Watford and Scotland, a member of the judging panel, Robert McLeod, praised bere:architects & The Princes Foundation for Building Community for their "genuine commitment to the task of alleviating fuel poverty and addressing wider socio-economic issues".

He also called the standard of all entries "a real testament to the growing strength of Passivhaus in delivering robust solutions to low carbon building in the UK," proving that the talent and skills already exist in the country.

This month, the first Passivhaus schools in the UK also achieved accreditation. They are: Bushbury Hills Primary School in Wolverhampton, Montgomery Primary School in Exeter, and Oakmeadow Primary School in Wolverhampton.

It means that the schools' managers will have minimal energy bills throughout the buildings' lifetimes. The Exeter school was built with the help of a Zero Carbon Task Force grant.

Passivhaus is an allowable standard under the Government's plans for all new homes to be zero carbon from 2016, however it is not yet even mentioned in the Building Regulations.

European efforts failing

A 40% reduction in energy use by 2050 for the EU is in line with the ambitions of new Energy and Climate Change Secretary Ed Davey.

At the launch of his new Energy Efficiency Deployment Office earlier this month, he called for a cut in UK energy use of between a third and a half by 2050.

But Dr. Tofield criticises current European efforts to increase energy efficiency. “The 20% energy efficiency target for 2020 is almost certainly a lost cause," he says.

“It's way off target and there's no enthusiasm where needed (member state governments) to get it back on track."

He criticises the Danes, who have made the best progress in Europe on renewable energy and energy efficiency, and who currently hold the Commission Presidency, for not pushing this. "Instead, there is a lot of talk about targets (renewable energy, greenhouse gas reduction and energy efficiency) for 2030," he says.

“A long-term target of 40% would galvanise the near-term action on energy efficiency that is essential if action to tackle potentially dangerous climate change is to succeed,” he adds.

Dr Tofield said he agreed with the EU Commission’s Energy Roadmap 2050 that a big reduction in energy demand is achievable and that very energy efficient buildings should become the norm, but he said many barriers remained.

“The biggest barrier is lack of political will to accelerate progress in energy efficiency,” he said.

“New build ambition is insufficient and the rate of building refurbishment to achieve high standards of energy efficiency is far too low. Political will to transform buildings will demonstrate EU leadership on climate action post-Durban. Cities across the EU can lead this change.”

Green Deal needs long term thinking

With the finishing touches being put to the Green Deal, the UK's flagship strategy for tackling fuel poverty and energy leakage in buildings, does Dr. Tofield think it will be successful?

"The problem with the Green Deal is that we cannot know if it will be effective," he says. "There are no targets. The UK Government wants to leave everything to 'the markets'.

"A second problem is that there is no subsidy. As experience in Germany has shown, an element of subsidy is important if you want significant take up for low-energy refurbishment."

He says one problem is short term thinking. "Investment decisions on building refurbishment are made with a time horizon of a few years at most. A subsidy, as in Germany, can help people to think longer term."

Therefore, the funding institutions involved in the Green Deal should not be looking for a quick return. Instead he advocates using the funds of insurance companies and pension funds, "institutions that really do have a long-term horizon for investment".

Building Regulations need to be more ambitious

The campaign also calls for building codes to change to adopt Passivhaus as the default for new build as well as for refurbishment, something which the AECB, the Sustainable Building Association, has called for many times.

The Government is consulting right now on changes to the 2013 Building Regulations, specifically Part L, which refers to energy efficiency. However, the new draft contains no reference to Passivhaus.

Neil Cutland, Director of Cutland Consulting, says he is "very disappointed" at this. He was a member of one of the working groups contributing to the revised text, which recommended that a certified Passivhaus dwelling should be given 'deemed to satisfy' status" for meeting a 2013 target.

"The Passivhaus standard is clearly in advance of the proposed 2013 energy/carbon standard, and its certification process leads to guaranteed outcomes," he adds.

"No-one was proposing replacing ADL1A and SAP with Passivhaus, but that Passivhaus should be an optional alternative.

"This would have advantages for Government as well as the environment, and would give the Passivhaus enthusiasts a ‘pat on the back’ for going above and beyond the call of duty. Seemed a no-brainer to me," he concludes.

We need an army of energy super-warriors, to save the country billions in bills

800 organisations who signed up to the Carbon Reduction Commitment (CRC) have yet to invest in significant energy management programme, according to the information published on the energy efficiency league website.

Why are these organisations, which represent 40% of those signed up to the commitment, yet to take advantage of the considerable financial, carbon and energy savings they could make?

One answer, postulated by the authors of a new report, is simply a lack of knowledge of the returns that can be expected at board level from a programme of energy efficiency at board level.

But why don't they know? Surely you'd think there were enough people telling them?

Well, perhaps one reason for this is that they don't have anyone in the company with sufficient clout to identify the opportunities and to persuade them to make the change.

The authors of this report should know what they are talking about. They're the energy managers of top companies: Stephen Barker, the Head of Energy Efficiency & Environmental Care at Siemens; Richard Tarboton, Director of Energy and Carbon at BT; Mervyn Bowden, the Head of Energy Management at Marks & Spencer; and Trevor Seddon, Johnson Controls' Director of Energy Consulting.

Notice that none of these are actually called energy managers. It's a sign of how the discipline is changing.

Their report, the Evolution of the Energy Manager, is published by Acre, a recruitment consultancy specialising in corporate responsibility, energy efficiency, carbon, environmental and health and safety.

For these energy efficiency slackers, it's not persuasive enough to cite examples of other companies who are saving money by saving energy, such as BT who saved £35m in two years from its programme, with investments of less than £15m per year.

Or M&S, whose Plan A generated £70m in profit in 2010, with energy efficiency being the biggest contributor.

Look, here are a few more examples of financial paybacks from selected energy efficiency programmes:

CompanyInvestment (£m)Payback (years)
Barts & London NHS1.21.5
Imperial Tobacco2.53.1
Johnson Controls8.13.1

Source: The Green Monday Energy Efficiency White Paper.

If you are an organisation which hasn't yet begun to take seriously the idea of energy management, then it's quite possible you would just look at this list and say to yourself, “Fine, but my organisation is not like any of these companies. They can afford to do something like this, and our needs are quite different".

Magic numbers

Well, surprise surprise, this isn't true. BT's Richard Tarboton says that any company can find energy savings, and the way to start doing it is to use an economic tool called the Marginal Abatement Cost Curves (MACC) to persuade members of the board of the economic case. [This link is to a page that tells you how to make one in Excel.]

MACCs crunch numbers to present the 'whole life costings' of taking a particular measure and can easily establish an argument for spending in order to save.

MACC curves enable a visual comparison between different projects, comparing their cost to implement and the amount of carbon or energy they can save.

They can also help you figure out what the price of carbon needs to make implementing a project more financially viable than not doing so.

The warrior wielding this powerful tool should be someone with leadership qualities, someone who is directly connected to the company's core business strategy.

This is not your traditional image of an energy manager. Maybe 20 years ago he (and an energy manager was usually male) could be characterised as someone technical, nerdy and permanently attached to a clipboard.

They would be marginalised, relatively powerless, and, if they were lucky to have an office at all, it would probably be under the stairs or in the boiler room.

Their role would previously have been more to do with the procurement of energy. Now it is just as much to do with its demand management and reduction. In other words, it is a strategic role.

This is why modern energy managers need to have super-powers; not just able to do their job but also possess super leadership qualities and super communication skills.

They need to be able to get across to their colleagues that issues like energy, carbon management and sustainability are not peripheral, separate topics, but indistinguishable from any other matter that is of primary concern to the organisation.

Just as ‘the environment’ can no longer legitimately be seen as something which is ‘out there’ and divorced from human activity, or indeed an individual's very day-to-day existence, so sustainability and energy use are a facet of everything any individual in an organisation does or has responsibility for.

The modern energy manager has to be able to make the case to anyone who says they don't have the time to think about energy use, that it is, on the contrary, part of their job function to think about energy use.

And, increasingly, companies employ Chief Sustainability Officers, for whom energy management is just a subset of their responsibilities.

The larger the company, the larger the energy management team, which will include members with the following skills: the ability to manage, work as part of a team, do marketing, management and accounting, have a knowledge of appropriate standards, data management, technical matters, efficiency technologies, generation technologies and keep up to speed with regulations.

As M&S' Mervyn Bowden says, “The modern energy manager needs to have wide commercial experience, with a full range of management skills to cope with a demanding role.

"A role which includes large budgets, managing risk, a need to influence others to achieve your aims, programme management and people management - to name but a few”.

In other words, cross someone with the charisma of Angelina Jolie the organisational ability of Sebastian Coe (who's organising the Olympics), the business sense of Richard Branson, and the intellectual prowess of Brian May, and you're close to what it takes: a waste-fighting superhero.

Currently, there are up to 3000 energy managers in the country, according to ESTA, the Energy Services and Technology Association, the energy management industry body.

As their responsibilities grow, so does the salary they can expect to earn.

Beginning at between £22,000 and £33,000, after five to ten years' experience they can earn up to £70,000.

Beyond that, according to recruiting experts Hays, at least 10% can expect a salary over £88,000, with some earning over £100,000.

Not bad.

The average (meaning based on average experience) is £44,000.

This is a direct measure of their value to the company in terms of saving money.

In other words, a good energy manager is worth their weight in gold, and essential to any serious organisation that wants to thrive in today's increasingly difficult conditions.

An often unsung superhero fighting an essential battle in the war against waste and climate change. We need an army of them.

Thursday, February 23, 2012

Cameron wants to pay communities to host windfarms

The Prime Minister, David Cameron, has come out in support of onshore wind farms, and promised that reform of the planning process will give more power to local communities over developments in their area, and more financial benefits to them should they agree to a windfarm being cited in their midst.

His views are expressed in a letter to Daventry MP Chris Heaton-Harris, who earlier this month coordinated an open letter to the Prime Minister, signed by up to 106 Conservative MPs, opposing onshore windfarms.

Mr Heaton-Harris boasts on his website about working with local communities "to fight both wind-farm proposals and unwanted development being foisted upon them by central government".

In his response to this letter, Mr Cameron says that he appreciates concerns from local residents about large planning applications, and “that is why we want to make the planning process more accessible to local residents, because planning works best when communities themselves have the opportunity to influence the decisions that make a difference in their lives.

"That must include local communities having their full say on onshore wind farm planning decisions."

He says that the planning reforms currently being finalised by the Coalition Government will “put local communities in the driving seat by giving new powers to neighbourhoods to write their own plans," which “will mean that the top-down regional targets will not trump local concerns in planning decisions," as it does at present.

It's significant that his wording is "regional targets" and not "national targets", for it is national targets which determine the number of onshore wind farms.

Business rates benefits

Mr Cameron goes on to say that this process should also allow local communities to “receive more local benefits as a result of development that does go ahead".

This means ensuring they “capture the full economic benefit from hosting renewable energy projects, including retention of all of the business rates they pay".

At present, only landowners and developers see a profit, which is a function of the way the Renewables Obligation was designed, unlike in several other countries where communities have long received financial benefits from wind farms sited in their locations.

Mr Heaton-Harris will take comfort from the fact that Mr Cameron says that he shares the views of the Tory MPs who signed the letter about “the need to review support for onshore wind under the Renewables Obligation".

He notes that initially the subsidy for onshore wind is being reduced by 10% because the costs of onshore wind of falling, "which will affect projects that are being built this year". This hints that the subsidy may fall further in future.

Support for low carbon sector

David Cameron then goes on to mount a defence of the role of onshore wind energy in “a balanced UK energy mix alongside gas, nuclear, cleaner coal and other forms of renewable energy".

He says that having a portfolio of different supplies “enhances energy security and prevents the UK from becoming over-reliant on gas imports".

In words that will please the low carbon sector he adds that he is “determined" to “seize the economic opportunities in renewable energy supply chains as the global race for capital in low carbon sectors intensifies", acknowledging the benefit to British companies in forging alliances with others abroad in order successfully to play their part in what is a global market.

“Around £4 billion of new investments in UK renewable energy projects have been announced with the potential to support up to 14,000 new jobs in this country" since April 2011, the Prime Minister writes.

He concludes by saying, in response to accusations that British renewable energy policy is a dog being wagged by the tail of policymakers in Brussels, that, “in other words, there are perfectly hardheaded reasons for allowing some onshore wind energy to be part of our mix irrespective of the EU's 2020 renewable energy target signed up to by the previous government..."

However, he adds to this sentence “...but if, and only if, local people have a proper say in planning decisions".

Heaton-Harris' response

In response, Mr Heaton-Harris says that he is “actually slightly encouraged by the letter and the noises off I am hearing", implying that he knows something we don't.

He told the Daily Mail: "I’m hopeful given what he says about planning and how that is being addressed. This is the opening of a conversation."

Nevertheless, Greenpeace spokesman Joss Garman also found reassurance in the letter: “The Prime Minister is right to make a strong intervention to cut through the myths and remind a vocal minority on his back benches that wind farms are good for the economy and good for the environment.

“Wind energy can play a crucial role in reducing our dependence upon the expensive gas imports that are driving up everybody’s energy bills, whilst also cutting pollution and creating new jobs.”

Wind industry hopeful

A spokesman for Renewable UK, the trade body for onshore wind, said that they welcomed the recognition by the Prime Minister of the contribution that the wind industry makes to the economy, employing thousands and, in the future, tens of thousands of people.

He said that wind developers had just responded to the Localism Bill and were not too worried that its effects would impact to an uncomfortable degree on plans for more onshore wind farms.

He said it would depend very much on the nature of a Local Plan and Neighbourhood Plan, and the degree of incentives that were offered to communities in the form of business rates etc. "It would be a question of balancing these local incentives with the national priorities."

This in turn hinges on the wording in the final draft of the National Planning Policy Framework (NPPF), which will determine how national targets are to be achieved at the local level, and which is still being written.

The latest thinking on resolving the tension that clearly exists between the NPPF and Neighbourhood and Local Plans, comes from the government's Communities and Local Government Committee.

It says on this matter: “Cllr Porter told us that once Local Plans were written, taking into account the NPPF, 'Neighbourhood Plans should be able to fit into a Local Plan so communities will be able to determine for themselves where development that is needed goes. What they will not be able to determine is the fact that they do not need any'".

The CLGC concludes by telling the government to sort out "the relationship between the NPPF, Local Plans and Neighbourhood Plans, especially when these priorities conflict. The NPPF must clarify whether the Local Plan or the Neighbourhood Plan takes precedence. It should also define what constitutes 'strategic issues'."

Planning Minister Greg Clark told the committee he hopes the words used in the final document would be unambiguous enough to not be open to misinterpretation.

The feeling is that, for wind farms, in the same way as for new housing developments (where the Government believes that the New Homes Bonus will incentivise communities to be more receptive to development), the carrot of receiving local business rates will be a sufficiently powerful persuader.

There will still be centrally set targets for onshore renewable energy. And at least 4,500 more turbines currently in the planning process will have to go somewhere.

Wednesday, February 22, 2012

CBI calls on Chancellor's Budget to support nuclear power

John Cridland
CBI director, John Cridland speaking at a recent conference sponsored by French nuclear company EDF, which stands most to benefit from the tax breaks

Ahead of next month's budget, business representatives are calling on the Chancellor to reduce taxes on carbon-emitting industries, support nuclear power and to merge the Carbon Reduction Commitment (CRC) and Climate Change Levy (CCL).

The CBI's director, John Cridland, has written to Number 11 with a shopping list of items he would like to see George Osborne announce in his Budget on March 21.

Support for nuclear power

Near the top is a request for capital allowances to be applicable to investment in infrastructure for which is currently not eligible; foremost among the list of examples is the building of nuclear power structures, as well as waste treatment structures and airport terminals.

It says that giving tax relief to the building of new nuclear power stations would reduce their cost by up to £30 million.

Prior to April 2008, nuclear power qualified for 4% annual capital allowances tax relief; this was abolished as part of a range of measures to protect public finances.

The CBI says the lack of any tax relief at all makes it around 20% more expensive to invest in a structure or building that does not qualify for capital allowances, compared to a plant that does receive standard capital allowances.

This means that there is not a level playing field internationally, and that the UK is therefore discouraging investments in some types of energy compared to similar projects overseas.

It says its proposals would cost the taxpayer an average of up to £200m per year if assets are depreciated over 25 years.

Its letter gives the example of a new nuclear power station costing £2 billion, which includes 30% of spending that is non-qualifying under the current capital allowances regime.

Applying the CBI's proposals would reduce the cost of the previously non-qualifying part of the project by 10%, or 7%, depending on the depreciation rate (4% or 2.5%).

This would in turn reduce the overall cost of the project by 3% or 2% respectively (£30 million or £20 million), which, it says, either makes new nuclear power stations more likely to be built, or reduces costs to the end user, or both.

The letter says this approach would “complement the extra funding for infrastructure provided in the Autumn Statement" and private sector infrastructure investment.

It also wants to see more regulatory roadblocks removed and reform of Private Finance Initiative agreements to make them more attractive.

Were the Chancellor to consider changing the rules to support nuclear power, this would raise accusations from his Liberal Democrat Coalition partners that he was providing government support for the industry, to which they are staunchly opposed.

It would be French company EDF which would be most likely to benefit from such tax relief, since it is the one most advanced in its plans, to build a new nuclear opwer station at Hinckley Point, Somerset.

CBI also wants a change carbon reporting laws

The CBI is also calling for reform of the Climate Change Levy (CCL) and the Carbon Reduction Commitment (CRC).

It says that that while it supports the original objective behind the CRC to secure emissions reductions and promote energy efficiency, since the Chancellor chose to convert it to a straightforward carbon tax instead of recycling the revenue back to energy efficient companies, it is no longer an “effective and proportionate mix of the financial, reputational and reporting drivers required" to promote energy efficiency.

Instead, it proposes reforming the Climate Change Levy (CCL) as well as Mandatory Carbon Reporting (on which Defra consulted last year) to differentiate the rates of the CCL, which would allow the Treasury to protect this CRC revenue stream by removing unnecessary administration burdens on business.

At the same time, it urges protection for energy-intensive businesses so they are not unfairly penalised.

It says that introducing MCR would ensure that reducing emissions gets board level attention and would allow the companies which succeed most in reducing emissions to gain the most reputational advantage in the public eye.

It believes that business has dismissed the current CRC performance league table as part of a mere tax and the issue is not being considered at board level.

However, carbon reporting does retain credibility amongst companies, investors and NGOs. Emissions reporting under an MCR framework would therefore stand a better chance of getting results.

...And opposes carbon taxes

The CBI wouldn't be the CBI if it wasn't against taxes. So, in the same letter, it is calling for several policies on taxation which will ensure that carbon emissions do not fall.

It wants to see Air Passenger Duty (APD) to continue to be pegged to the rate of inflation for the foreseeable future, calling for the government to balance “the value of air travel's contribution to the Exchequer with the potential impact of further immediate rises on the UK as a place to trade and invest".

The duty would therefore rise in line with inflation by 5% this April. Currently it is slated to rise by 8%. This reduction would cost the taxpayer £145 million a year.

The CBI also reiterates its "robust opposition" to a Europe-wide carbon tax as proposed in the draft reforms to the Energy Taxation Directive (ETD), on the basis that tax is a national competency and imposing it would go against the principle of subsidiarity.

It points out that individual member states of the European Union are already working towards binding targets in 2020, and several existing European directives support this work.

Imposing the ETD would “reduce the ability of member states to choose the measures most appropriate to their circumstances to reach 2020 targets".

The current proposals for the directive are to split the minimum tax rate into two parts: one would be based on CO2 emissions of the energy product and be fixed at €20 per tonne of CO2.

The other would be based on the actual energy that a product generates and the minimum tax rate would be fixed at €9.6/GJ for motor fuels, and €0.15/GJ for heating fuels and be applied to all fuels used for transport and heating.

Consistent with this attitude, the CBI also calls for no further opportunistic tax raids on Britain's oil and gas industry.

It says this is important because the sector represents 7% of all business investment in the country, equivalent to around £8 billion last year.

It also calls for greater certainty over tax relief available for decommissioning old fields.

Green Deal

Finally, the CBI welcomes the £200 million allocated by the Treasury in the Autumn Statement to attract early adopters to the Green Deal.

It calls for an incentive scheme similar to the boiler “scrappage" scheme in 2010, where a voucher worth £400 was given to those who replaced their old boiler with something more efficient.

This succeeded because it was consumer friendly and simple. Another proposed option is a discount for early adopters such as “sign up now and get the 1st 6 months free".

The country will have to wait until 21 March to see how closely George Osborne listens to the voice of business.

Monday, February 20, 2012

MPs call for targets to help Britain rule the world's waves again

Marine Current Turbines' commercial-scale demonstration project with SeaGen in Strangford Lough in Northern Ireland
Marine Current Turbines' commercial-scale demonstration project with SeaGen in Strangford Lough in Northern Ireland. The shrimp MCT has just been swallowed by the Siemens' whale.
The UK could become a leading exporter of wave and tidal power equipment and expertise if the Government adopts a more visionary approach to developing marine renewables, according to a new report by the Energy and Climate Change Select Committee.

The MPs suggest giving targets to set the pace of development and show commitment, and suggest a cost target for marine energy of 14p/kWh by 2020.

Tim Yeo MP, Chair of the Committee, said that "We are extremely well placed to lead the world in wave and tidal technologies, which could potentially bring significant benefits in manufacturing and jobs, as well an abundant supply of reliable low-carbon electricity".

He called for "a more visionary approach from the Department of Energy and Climate Change" which "could help to boost confidence and drive the pace of development".

The UK is currently the world leader in the development of wave and tidal energy technologies. Of the eight full-scale prototype devices installed worldwide, seven are in the UK.

The country is lucky to have an abundant natural resource, along with Canada, France and East Asia, with the added advantage of a long history of academic research, world-class testing facilities and a strong skills base in other maritime industries.

The worldwide potential for power generated by tidal power plants is estimated at 800TWh a year, or about 3-4% of global power consumption.

Don't repeat mistakes

The MPs urge the Government not to repeat the mistakes that allowed the UK to lose its lead in the development of wind power. In the 1970s, it was a leader in the research and testing of wind turbines, but failed to establish a domestic manufacturing industry and missed out on many economic benefits.

By contrast, Denmark supported its wind power industry through the early adoption of Feed-in Tariffs and is now hosts the world’s largest supplier of wind turbines.

Those MPs with long memories may also have in mind a 1970s pioneering British wave power invention, Salter's Duck, whose development was allegedly sabotaged by Government officials prejudiced against renewable energy, by falsifying research results concerning its efficiency, leading to the cancellation of a £1m research project. This set marine power development back at least ten years.

"An overly cautious approach to developing the sector may allow other less risk-averse countries to steal the UK's lead," MPs warn.

The report recommends ways to maintain crucial investor confidence by maintaining policy certainty and sharing risk.

MPs also note the need to address other barriers to commercialisation such as grid connection, the consenting process, the need for better data on marine wildlife and public attitudes.

At the moment the industry is required to underwrite the cost of new grid connections. The committee report says that this places "an excessive burden on individual developers", as the cost is disproportionately borne, and suggest that either the Marine Energy Programme Board set up consortia that would shoulder this responsibility, or that the Government should underwrite some of the cost.

They also call for a simplification of a "complicated funding landscape" for marine renewables which leads to "overlaps and inefficiencies in the way the programmes are funded".

"The £20 million provided by DECC to underpin a world-leading industry is not large", they say, and so must be spent wisely.

They stop short of calling for more funding.

They also note a shortage of skilled scientists and engineers and want the Government to encourage more students into these disciplines now to take advantage of future opportunities.

On the investment issue, Martin McAdam of Aquamarin Power observed that "private sector investors can see the support available via Renewable Obligation Certificates until 2017, when they will be phased ou, but beyond that, the view is unclear.

"The critical enabler for our industry will be the long-term signal of a suitable marine energy feed in tariff (FIT).

"The shift from ROCs to FITs has already unsettled potential investors, and what we need now is a stable tariff that will stay in place, and not be tinkered with for a number of years."

Ready for launch

A spokesman from DECC responded by saying that the Government is "fully committed to spurring on the growth of this industry", as the launch last month by Change Minister Greg Barker of the South West Marine Energy Park shows. He said there are plans to create similar parks in Scotland and Northern Ireland.

It's a time of exciting activity in the sector, but it is experiencing difficulty in finding investment partners in this country to help it take off.

Last week, Scottish tidal developer Marine Current Turbines (MCT) handed over boardroom control to German company Siemens, which bought a controlling stake in the company.

This world leader is already providing power to approximately 1500 households in a commercial-scale demonstration project with SeaGen in Strangford Lough in Northern Ireland, and has further projects at the planning stage, including the 8MW Kyle Rhea project in Scotland and the 10MW Anglesey Skerries project in Wales.

MCT needs investment and expertise to take it to the next stage of growth, and it evidently could not find a suitable British buyer.

Also north of the border, Alex Salmond is pinning hopes for Scotland's independence on success in the marine, and offshore wind, industry, which he believes will eventually let Scotland become an exporter of renewable energy and expertise, and he is securing partnerships in China and Abu Dhabi to help achieve this.

Wind developer Ecotricity has recently begun investing in a new kind of wave energy device called Searaser, which it believes will reach commercial stage before 2020, but both the developer and the investor in this case are British.

Saturday, February 18, 2012

Cameron & Sarkozy expose their nuclear hypocrisy

In a blaze of publicity, Prime Minister Cameron and President Sarkozy have signed a £400m deal on new nuclear reactors between Rolls Royce and Areva at the same time as agreeing a joint control and command centre for military operations and celebrating their "tough stance" against Iran's nuclear programme.

Cameron said: "One year on from the Libya uprising, we are working together to stand up to the murderous Syrian regime and to stop a nuclear weapon in the hands of Iran [sic]."

The two leaders agreed also to build a new generation of a controversial unmanned 'fighter drone' aircraft, which will allow targeted strikes, intended no doubt for use in the Middle East and elsewhere.

Anyone observing this from a Middle Eastern perspective might detect more than a whiff of hypocrisy here.

The £400m, which is as yet potential, would go to Rolls Royce to manufacture turbines for four possible reactors at a new factory in Rotherham, the first of which is the EPR reactor at Hinckley Point, Somerset.

Who gets the benefit?

DECC is claiming that the deal would support 1,200 new jobs across the nuclear supply chain in Britain.

However, as it covers four reactors, with each reactor costing £5bn upwards, the British contribution and benefit to the project would be less than 2%, (£100m per reactor).

This puts into perspective David Cameron's fine-sounding statement that "I want the vast majority of the content of our new nuclear plants to be constructed, manufactured and engineered by British companies".

He can want it as much as he likes, but it is not going to happen.

The actual size of the deal led Dr Tim Fox, Head of Energy at the Institution of Mechanical Engineers, to comment that “Although it is welcome news that the UK is pressing ahead with the development of new nuclear reactors, to secure affordable low-carbon electricity generation, this is not necessarily the best deal for securing UK jobs and skills".

Quite, but there is little that is affordable about it either.

Nuclear costs

Nuclear costs have a habit of ballooning well over predictions, as has happened at recent new builds in France and Finland.

Areva's Olkiluoto reactor in Finland is five years behind schedule and costs have increased from €3-billion to €5.3-billion, causing the Finnish utility TVO to fight Areva in court.

It is still uncertain where utilities will get the funding for new nuclear power, making Cameron's vision of £60 billion for the nuclear industry and 30,000 jobs in the UK presently no more than a hope.

Dr Doug Parr from Greenpeace commented: "No amount of talking up of the French nuclear industry by David Cameron and Nicholas Sarkozy will cover up the fact that the economics of new nuclear reactors don't stack up.

"The track record of EDF in building new nuclear power stations on time and to budget is appalling."

Recently, the independent risk agency Standard and Poor downgraded EDF’s creditworthiness on account of it being, like Areva, state-owned.

"All this came just a few months after a French judge sentenced a number of EDF senior executives to prison for unscrupulous acts of spying. French nuclear power is no longer popular even in France," said Dr. Parr.

Greenpeace accuses Cameron of using UK taxpayers' money to prop up failing French industries, and urges him instead to "follow the lead of Germany and concentrate on securing vast numbers of jobs and economic growth in the rapidly expanding clean energy industries such as wind and solar power".

Solar, wind power and other renewables can be up and running inside 18 months of permission being granted, whereas nuclear newbuild takes over a decade.

″A corruption of governance"

The source of Government enthusiasm for a new fleet of nuclear power stations can be traced to ministers having misled parliament over the need for them by distorting evidence and presenting to MPs a false summary of the analysis they had commissioned.

This is alleged by a group of MPs and experts in a a report published earlier this month by the Association for the Conservation of Energy and pressure group Unlock Democracy.

It shows that, on the basis of the Government’s own evidence, we do not need any more new nuclear power stations in order to ‘keep the lights on’ and reduce CO2 emissions by 80% by 2050.

And it shows that, again on the basis of the Government’s own evidence, electricity generated by nuclear power is the not the least expensive of all low-carbon technologies.

In everyday terms, the building of new nuclear power stations to provide electricity is likely to mean higher fuel bills.

If MPs had been presented with an accurate picture of the evidence for and against new reactors, they say, the government's plans might have been challenged.

Both the previous Labour government and the current coalition overstated the evidence that new nuclear power was needed.

The two bodies label this "nothing less than a corruption of governance" which can "only be rectified if Parliament re-opens this debate, and MPs vote on this issue having seen the correct information".

Areva's need

Behind the scenes, Areva is desperate to find new markets for the uranium it owns, following the purchase in 2007 of Canadian company UraMin's three African mines for $2.5 billion. The mines are Trekkopje in Namibia, Bakouma in the Central African Republic and Ryst Kuil in South Africa.

But the UraMin mines have yet to prove their money's worth at today's price of $52 a pound.

This has brought financial and political chaos to the company, and in December it wrote down almost the entire value of the mines.

This prompted speculation that the deal had been a scam and a report commissioned by Areva's security service even speculated that Chief Executive Anne Lauvergeon's husband had "illegally benefited" from the takeover.

No proof has been found, but an internal report two days ago has urged "reforms in governance" of the company and the French industry ministry and parliament are each investigating the UraMin acquisition.

SSE's exit

If new nuclear power is so attractive, then why is SSE pulling out? The utility company announced its intention to pull out of the nuclear sector in September last year in order to focus its efforts on renewable energy and carbon capture and storage (CCS) projects.

This week, it sold its stake in a nuclear joint venture NuGeneration (NuGen), for a cash consideration that could rise to £7m.

It has now completed the sale of its 25% stake in NuGen, which it jointly owned with partners GDF Suez and Iberdrola, parent company of ScottishPower.

Where the cash goes

The solar industry's reaction to the Cameron announcement, exemplified by Solar Century Jeremy Leggett's Twitter comment, is predictable: ″Cameron says nuclear deal with Sarkozy will create fully 1,500 jobs: And how many is he killing in solar?″

Although the mechanism is different, the broader truth is there: the cash for both nuclear and solar will come from increases in consumers' bills.

But who receives the income from the sale of that electricity? On the solar hand it is householders in the UK lucky enough to be able to afford the panels; on the nuclear hand it is a French utility, one of the Big Six we all love to hate.

Thank you Mr. Cameron, for supporting the export of British people's earnings to France.

Friday, February 17, 2012

Germany and UK have greatest deficit of EU carbon allowances

UK carbon Emissions and allowances by sector
UK carbon Emissions and allowances by sector
Figures show that the UK and Germany have the largest deficit of allowances to pollute under the EU Emissions Trading Scheme (EU-ETS), meaning they have to purchase more to meet their obligations.

The deficit arises exclusively from their power sectors' burning of more fossil fuels than originally estimated.

Individual Member States implement the trading scheme in different ways and have mixed fortunes.

Each are given allowances, distributed amongst their industrial sectors by arrangement, in anticipation of how they will be "spent".

The summary below, using up-to-date figures collected by Sandbag shows that Germany and Britain have the greatest deficit, and Romania and France the greatest surplus of allowances.

The figures represent the balance among many EU nations between the total of free allowances (EUAs) given in the current Phase II of the EU-ETS, minus the actual carbon emissions up to date, by country, ranked from the winners to the losers.

Romania: +60.3m
France: +43.7m
Spain: +33.3m
Czech Republic: +27.9m
Italy: +26.4m
Belgium: +19.4m
Poland: +13.3m
Portugal: +12.0m
Bulgaria: +10.3m
Sweden: +5.24m
Austria: +4.4m
Luxembourg: +927,553
Finland: -222,813
Slovenia: -414,803
Greece: -1.9m
Denmark: -5.47m
United Kingdom: -81.9m*
Germany: -174.6m*

* exclusively due to the power sector, which has a considerable shortage of allowances.

This means that, assuming, say, a price of €9 per EUA, Romania's surplus is worth €542.7m, and Germany's deficit will cost it €1,571.4m while the UK's costs it €737.1m.

The UK’s industrial sectors, that is, the heavy energy users which have been complaining that the EU-ETS adds to the cost of their energy use, actually currently have a combined surplus of permits of 46 million EUAs, worth €414m, at the €9 rate, which they were given for free.

Across Europe, some energy intensive sectors still oppose reform despite the fact that they, so far, are not affected by it.

Germany's severe deficit contributes substantially to an overall shortfall among the above nations of 7.34 million credits.

The UK and Germany's position has arisen from the need to burn more coal, and to a lesser extent gas, to compensate for closing nuclear power stations (in Germany's case) and a closed nuclear power station and cold winter, in the UK's case.

EU may act to boost carbon price

More top businesses have been joined by European Parliamentarians in calling for reform of the EU ETS in order to prevent a new generation of investments being made in fossil fuel intensive technologies.

The danger of this happening was made clear in a leaked Commission document last month, as a low price for carbon makes polluting technology more economically attractive than most renewables and provides less incentive to invest in saving energy.

The business names include: Shell, Alstom, Doosen and Philips, as well as a growing number of power companies, such as E.ON, SSE, ENECO and DONG Energy.

A vote yesterday by EU parliamentarians to withdraw an unspecified number carbon allowances in order to prop up EUA prices, which have reached record lows, means that a move to cut the glut of EUAs on the ETS market looks more certain to happen.

Carbon prices perked up at the news, with the benchmark contract price rising nearly 4% to €8.68 per tonne within hours.

After the meeting, Dutch Green MEP Bas Eickhout reported that negotiators from all parties supported the compromise and there was "a good chance" it would get voted through at a crucial meeting of the European Commission on 28 February.

UK Allowance sales

A sale by DECC of 3.5 million EU Allowances on 9 February showed a healthy demand, with 5.89 times the demand of the supply, such that bidders were only able to obtain 62% of what they bid for.

The EUAs went for €8.11 each, down from €9.72 fetched at the last auction three months earlier.

The price has halved from a peak last summer, as the figures below show:

Nov '11: €10.38
Sept '11: €12.31
July '11: €13.17
June '11: €16.34
March '11: €15.59
Feb '11: €14.36

The price drop underscores the call by the big companies and Parliamentarians for action.

Last month, think-tank Civitas criticised the EU-ETS for being expensive and ineffective.

Sandbag's research points to the opposite conclusion: that emissions trading delivers carbon reductions at lowest cost, minimises the burden on consumers and businesses, and that the electricity sector has consistently shouldered the greatest effort under the scheme.

The design of the next trading period (2013-2020) is being deliberated now.

It is already determined that the electricity sector will buy all of its pollution permits at auction, and that heavy energy using industrial companies will continue to receive up to 100% of their permits for free, depending on their exposure to international competition and their carbon efficiency compared with their European competitors.

The latter are affected by indirect carbon costs, but the Directive allows member states to compensate them if required, and this is exactly what George Osborne announced in his autumn statement.

Thursday, February 16, 2012

World-beating €1.1bn under-sea cable to connect England and Scotland

Western HVDC Link
The route of the Western HVDC Link

While politicians talk of Scottish independence from England, a world-beating €1.1 billion contract has today been announced to make the two countries even more interconnected.

The Western HVDC Link will be the first submarine grid interconnector ever that uses a high voltage direct current (HVDC), and is to join the Glasgow and Wirral areas along the bed of the Irish Sea. It is planned to be up and running by 2016.

No ordinary wire, this grid connection has two other firsts: it will be the longest 2,200MW capacity HVDC cable in the world, as well as the first to use a voltage level of 600kV (600,000 volts).

This will increase the link’s capacity and provide lower transmission losses.

The highest voltage level used to date has been 500 kV; Siemens says that raising the voltage level in the cable by 20% raises the amount of electrical capacity it can handle by the same amount, while still using the same diameter of copper in the cable, thereby reducing the cost of this expensive material.

Furthermore, the transmission losses over its 420 km will be reduced to below 3% (including cable and converter losses). A conventional 400-kv A.C. connector would lose about three times this amount.

The project has been commissioned by the National Grid Electricity Transmission and its counterpart Scottish Power Transmission from Italian cable company Prysmian and the German company Siemens Energy, to bring renewable energy from Scotland and the Irish Sea to help England meet its 2020 renewable targets.

The order comprises cable installation along the route and construction of converter stations in Hunterston, in Ayrshire, and Connah's Quay on the Wirral peninsula on the Wales-England border.

Ignacio Galán, Chairman of ScottishPower, said that the project should be seen "in the context of a vital upgrading of the UK electricity grid over the coming years, with the electricity grid between Scotland and England already running close to maximum capacity".

He said that ScottishPower expects to invest a total of £2.6 billion between 2013-2021 on upgrading its transmission network in the UK.

"Overall, we are projecting investments totalling £12 billion in the UK over the course of this decade, including major offshore wind projects around the country,” he added.

Nick Winser, Executive Director at National Grid said: “This link will have a vital role of play in helping to address the problem of climate change.

"We are investing in an innovative solution using the most advanced technology. The benefits for consumers and electricity generators in being able to transport power in the most efficient way, will be felt for years to come.”

Round 3 windfarms

The Western HVDC Link will support the planned expansion of renewables such as offshore wind and marine power at sites that are far away from loads and where the amount of electricity produced can be dependent on weather conditions.

It will therefore help to meet the consequent challenge of balancing power generation and consumption within the grid.

Underground or submarine cables lengths of 80 km or more are only possible with HVDC transmission technology because when A.C. lines reach this length the cable’s insulation serves as a capacitor and becomes charged, thereby absorbing most of the electricity.

Future wind farms will be far offshore due to the higher yield and because the near-coastal regions were already contracted out in rounds 1 and 2.

For round 3, with 32 GW of wind power, areas have been identified for wind farms that are between 40 and 200 km off the coast.

In the Irish Sea, the area is 'Zone 9', located between the Isle of Man and Anglesey.

"This order underscores our technological leadership in the HVDC field," said Udo Niehage, CEO of the Power Transmission Division of Siemens Energy.

“It will be the first subsea interconnector with a transmission capacity of 2200 megawatts – this equals the power output of two large-scale power plants,” he added.

The project was conceived in 2009 following an Electricity Network Strategy Group survey which identified a number of transmission reinforcements needed to enable renewable energy to be connected and secure the UK’s energy supplies.

Its report said the HVDC subsea link would be the most appropriate way to ensure that the additional energy generated in Scotland could be transmitted to the rest of Britain, because HVDC becomes more economic at longer distances.

Udo Niehage said that he foresees an expanding need for HVDC. “By 2020, I’m expecting to see new HVDC transmission lines with a total capacity of 250 gigawatts. That is a dramatic increase. In the last 40 years, we’ve only installed 100 gigawatts worth of HVDC transmission lines.

“Additional HVDC transmission projects will be awarded in Germany and Europe during this year.”

China, India, and Brazil in particular are also utilising the technology more and more, because their energy demand is growing rapidly and large distances must be bridged to ensure a supply of electricity from renewables projects.

Wednesday, February 15, 2012

"Deniergate" spells "time's up" for anti-climate change fraudsters

Heartland Institute CEO Joseph Blast
Heartland Institute CEO Joseph Blast

In a massive leak that will do far greater damage to the credibility of climate change deniers than so-called Climategate did to climate change science, secret details have been released on the DeSmogBlog website revealing the donors and future plans of the Heartland Institute, the American lobby group behind many attacks on climate science.

The Heartland Institute is a nonprofit organisation that describes itself as a "think tank", and also lobbies on behalf of the tobacco industry against the reality of second-hand smoke health hazards, and many other issues where regulation threats affect free market activity.

The material is published by DeSmogBlog editor Richard Littlejohn, co-author (with Jim Hoggan) of Climate Cover-up: The Crusade to Deny Global Warming.

The documents were apparently leaked by an anonymous donor called "Heartland Insider" and include a budget, fundraising plan, and Climate Strategy for 2012.

The names, addresses, phone numbers and email addresses of the Board of Directors have also been published.

Detective work is on to discover the identity of a single, male, anonymous donor who gave the Heartland Institute a staggering total of $14,260,443 over six years, including $979,000, or about 21% of total 2011 receipts, in 2011.

Many well-known and sometimes surprising names are to be found in a long list of other donors, including AT&T, well-known climate deniers the Charles G. Koch Charitable Foundation, the Credit Union National Association, General Motors, GlaxoSmithKline, Microsoft, Murray Energy Corporation, Pfizer, Time Warner, various insurance companies, and, in 2010, the US Chamber of Commerce.

It is astonishing that some of these, such as Microsoft, in public purport to support the fight against climate change.

Targeting schoolchildren

The Heartland Institute's 2012 plans include a shocking $200,000 "Global Warming Curriculum project" to plant doubt about the scientific basis of climate change in the minds of schoolchildren using specially written materials; and a $100,000 campaign to promote the hydraulic fracking of shale gas.

The former is to be directed by Dr. David Wojick, well known as a climate change sceptic and with strong links to the coal industry.

Wojick would create “modules” for grades 10-12 on climate change (“whether humans are changing the climate is a major scientific controversy”), climate models (“Their reliability is controversial”), and air pollution (“whether CO2 is a pollutant is controversial”).

For Grades 7-9 the proposal is to say about environmental impact: “environmental impact is often difficult to determine. For example there is a major controversy over whether or not humans are changing the weather”, and so on.

The intent would be laughable if it were not known that these people have been effective before. Yet is doubtful whether any teacher worth their salary could bring themselves to cooperate.

The pro-fracking work is described as follows: "Heartland has been one of the most outspoken defenders of fracking in the U.S., using Environment & Climate News" [which is packed with 'science' stories that are demonstrably untruthful or misleading], "its Web sites, and its PR and GR operations to comment repeated on the issue and reach large audiences. We have not, however, yet attempted to raise funds from businesses with a financial interest in fracking. In 2012 we intend to correct that oversight and approach dozens of companies and trade associations that are actively seeking allies in this battle."

Fred Singer

Matters which environmentalists have often suspected but not been able to prove can now be established using these documents.

For example, prominent climate sceptic Dr Fred Singer was paid for producing "Climate Change Reconsidered", published by a front organisation named the "Nongovernmental International Panel on Climate Change" (NIPCC), which attempts to disprove the climate change reports of the UNFCCC using so-called "scientific literature".

This cost the Institute $388,000 in 2011. The Strategy document says "NIPCC is currently funded by two gifts a year from two foundations, both of them requesting anonymity. Another $88,000 is earmarked this year for Heartland staff, incremental expenses, and overhead for editing, expense reimbursement for the authors, and marketing."

Singer was given $5,000 in the same time period that he appeared on a Horizon TV programme on climate change last year, where he was given a relatively free ride by the interviewer.

The 2012 Climate Strategy proposes further funding for high-profile individuals who regularly and publicly counter the "alarmist AGW message".

"At the moment," it says, "this funding goes primarily to Craig Idso ($11,600 per month; he is the founder and former President of the front Center for the Study of Carbon Dioxide and Global Change, funded partly by ExxonMobil), Fred Singer ($5,000 per month, plus expenses), Robert Carter ($1,667 per month; he is an Australian climate denier), and a number of other individuals".

Singer has worked for at least 11 ExxonMobil funded think tanks, and has been a paid lobbyist for polluting industry on a wide range of issues, as well documented in 'Merchants of Doubt', the book by Naomi Oreskes and Erik Conway which exposes how the ideology of free market fundamentalism, aided by an over-compliant media, has skewed public understanding of tobacco, acid rain, the ozone hole, global warming and DDT.

DeSmogBlog has also today published evidence compiled by John Mashey that Singer claimed Dr. Frederick Seitz as the chair of the Science and Environmental Policy Project (SEPP) for two full years after Seitz died, thereby committing perjury in his tax filings to the Inland Revenue Service.

James Taylor

The Strategy document confirms that James Taylor, a climate denier with a blog on the top free-market business website and who appears on CNN, CNN Headline News, CBS Evening News, MSNBC, Fox News Channel, is on the payroll of the Heartland Institute.

Taylor is so right wing that he attacks Republican Presidential candidates Mitt Romney and Newt Gingrich for supporting big-government energy and environment policies.

The document expresses anger that Forbes is now allowing high profile climate scientists (such as Peter Gleick) to "post warmist science essays that counter our own".

The Fundraising Plan also proves that the Institute funds Anthony Watts, a meteorologist who hosts, which trashes the reputation of weather stations in collecting climate data.

The Plan proposes giving him more money to create another website costing $88,000, called the Weather Stations Project, which would repost NOAA data regarded as favourable by the Institute (the NOAA is the National Oceanic and Atmospheric Administration, but the Heartland document amusingly mis-names it the 'National Aeronautics and Atmospheric Administration').

There is also a further $250,000 earmarked for a "Center for Transforming Education".

Declining support

The Strategy document admits that the Anonymous Donor’s generosity has declined from being over half of its budget, and that times are now harder. "We went half the year without a development director and didn’t do any direct mail", it says.

It also does not have the cash to produce a 2012 edition of "Climate Change Reconsidered".

These documents are undoubtedly genuine. Their release makes it less likely that the work of climate change deniers can be taken seriously, now that it is patently obvious which vested interests are behind their persistent misrepresentations and inversions of climate science.

No doubt the Heartland Institute is now urgently seeking the identity of the whistleblower who is the Heartland Insider, but the damage has been done, and its donors will be wondering whether 2012 might be the year to withdraw their support.

But the question remains: who is the Anonymous Donor who has been their biggest single backer?

Tuesday, February 14, 2012

Job creation potential of the Energy Efficiency Directive

The crucial Energy Efficiency Directive is being discussed at today's meeting of the Transport and Energy Council in Brussels.

Martin Lidegaard, the Danish Minister of Climate, Energy and Buildings, a key helmsman of the EED, said yesterday that, “As Presidency, we will do our utmost to deliver on this request to get an agreement on energy efficiency by the end of June 2012, and to make sure that the current gap to the 20% Energy Efficiency target in 2020 is closed”.

Some of Europe’s largest investors and private enterprises, including 1E, Danfoss, Knauf Insulation, Philips Lighting, Schneider Electric, Siemens, the European Climate Foundation and Kyoto Club have called upon national Energy Ministers to change tack on the Directive in advance of the meeting.

Donald MacDonald, a trustee director of the BT Pension Scheme, Britain's largest at £36 billion, and Chairman of The Institutional Investors Group on Climate Change (IIGCC), said, "The issue of carbonisation is totally embedded into every single asset class. Failure to take this up in investment policies could be a failure of fiduciary duty."

"Energy efficiency is critical to the wider effort to mitigate climate change," MacDonald added. "For private investment to flow, policy makers must focus on removing barriers to investment inherent in sectors such as the real estate market.

"This requires policies that provide regulatory certainty to investors and are targeted enough to take the complexity of the market into account. The Energy Efficiency Directive will remain crucial to achieving this."

Nick Robins, head of HSBC's Climate Change Centre of Excellence, has said he is optimistic about the EED's implementation, and claimed that opposition to green investment was "bottoming out" after being fuelled by the economic crisis.

"We have the beginnings of a case for being more quietly optimistic. We are recognising the case for energy efficiency," he said.

The EED proposes market based energy efficiency obligation schemes such as the renovation of 3% of public buildings each year.

Research has demonstrated that these schemes could create half a million jobs and save around €50 billion (annually) in primary energy imports by 2020, as well as achieving half of the energy savings needed to close the 20% energy savings gap by 2020.

And the construction industry estimates that the equivalent of up to 530,000 full time jobs would be created in Europe through an ambitious strategy to improve energy efficiency in buildings by 2020.

As for financing the measures, to top up the EU-ETS carbon price investment, a new IEA report, Policy Pathways: Joint public-private approaches for energy efficiency finance, suggests three particular kinds of public-private partnership agreements which could be of use:
  1. Dedicated Credit Lines, established by a public body (such as a government agency and/or donor organisation) to enable financing of energy efficiency projects by a private-sector organisation (like a bank or financial institution)
  2. Risk-Sharing Facilities, involving a kind of partial credit guarantee established by a public body to reduce the risk of energy efficiency project financing to the private sector and
  3. Energy Saving Performance Contracts (ESPCs), which can condition the performance of energy service companies (ESCOs) using targets and private-sector financing.

Monday, February 13, 2012

Cameron advisor urges policy change to support community renewables

The message that communities can come up with the answers to our looming energy supply crisis, which I promoted last week, is reinforced today by a report that urges the Government to radically overhaul the ‘closed shop’ energy market by unleashing the community energy sector.

ResPublica, a think tank founded by Phillip Blond, whom David Cameron has described as being "at the cutting edge of progressive thinking about public services", is warning that failure to recognise and back the community sector will have serious consequences on the Government’s climate change, emissions and fuel poverty targets.

They're calling for local people to be empowered to move beyond the status of passive users and consumers and instead become producers and distributors of their own energy supplies.

The report, Re-energising our Communities: Transforming the energy market through local energy production, which is backed by Friends of the Earth, recommends opening up the energy market, and highlights examples of best practice elsewhere, citing Germany where one-quarter of all renewable energy is community owned.

In the UK, it points to successful schemes in the Isle of Eigg off the west coast of Scotland, Torrs Hydro Ltd in New Mills, Sheffield, and Fintry Renewable Energy Enterprise in Stirling, which is it says could be replicated across the country.

Ed Mayo, ResPublica Fellow and Director General of Co-operatives UK, said, "The beauty of renewable energy that is co-operatively owned and community-level is that it solves the twin issues of social acceptance and economic efficiency".

The report’s authors say the Government wants to reform the market and increase community production, but that its current approach is doomed to fail.

And they criticise the regulator Ofgem, because its rationale "largely ignores the social and economic potential of the community energy".

They say that Ofgem's proposal in its Retail Market Review for suppliers to auction off 20% of power generation in order to help new suppliers enter the market "will not help community organisations" because they can't afford to buy bulk supplies, and this approach "will not change the type of energy that is generated”.

They are recommending that instead, a new hybrid company structure should be included in the upcoming consolidated Co-operatives Bill, launched last month by the Prime Minister, and that the policy should build upon existing coalitions, such as the Low Carbon Communities Network, or the recently established ‘coalition for community energy’ spearheaded by Co-operatives UK, Friends of the Earth, Forum for the Future and others.

Local authorities have a role, too, to work with communities, local asset holders and the energy industry to highlight underused assets and space that could be utilised for community energy projects, they add.

Wind farm developers go into schools in search of the next generation of workers

Dogger Bank wind farm installation

In an effort to make sure that the skills needed for the imminent offshore renewable energy industry will be available, renewable energy developers have begun teaming up with schools and communities in the North East of England.

Forewind, a consortium of RWE, SSE, Statkraft and Statoil, which is a development partner for the Dogger Bank offshore wind farm zone, has launched a programme for schools that will support teachers to develop classroom resources about the job opportunities that will be available for their students in the locality in offshore wind power.

Graduate schools are also capitalising opportunities provided by offshore renewable energy. Some prestigious universities and online graduate degree programmesare now offering programs with offshore windpower as the main focus.

Stephen Logan, ICT and business studies teacher at Malet Lambert school in east Hull, said: "It is crucial young people are aware of the career opportunities in the area. It will raise aspiration and ambition and give them the opportunity to see what they can do.

"The offshore wind and renewables industry could have a massive impact on this area and it could be their future career for a decade or 20 years."

Forewind's general manager, Lee Clarke, said the schools, from Scarborough in the north to Withernsea in the south, are in the area where the first proposed offshore wind farms are planned to connect with the national grid.

Dr Clarke said: "It made sense for us to focus on the area around the onshore infrastructure for our first development – Dogger Bank Creyke Beck – to ensure the nearby community is aware of the potential opportunities offshore wind may bring."

The project, called the Champions For Wind careers education programme, was launched last week at conference in Hull with speakers from Forewind, The Crown Estate and Renewable UK and the Humberside Engineering Training Association (Heta).

The teachers are enthusiastic. Sarah Bone, deputy head teacher at Hessle High School, said: "I want to raise awareness and aspirations about what the industry can offer. The industry is facing problems that there aren't yet solutions for and our students could be the ones to come up with them."

£56 million for next gen offshore renewable energy

The marine and tidal energy sector in Scotland is being offered £6 million to push out new wave and tidal power devices, on top of a £50 million R&D fund for all offshore energy.

The £6 million is from Scottish Enterprise, which is launching a second round of funding from its WATERS £13 million fund to help reduce the cost of bringing wave and tidal technologies to commercial application.

First Minister Alex Salmond said the programme will continue to work with “enterprise agencies, SDI and the European Marine Energy Centre in Orkney" to "help generate £4 billion for Scotland’s economy by 2020".

The fund will be open to businesses that are legal entities registered or planning to register in Scotland, including Scottish subsidiaries of overseas companies.

Leading developers Aquamarine Power (with its Oyster wave power device), Open Hydro (tidal current devices), AWS Ocean Energy (which has a doughnut-shaped wave energy converter in Loch Ness and the Cromarty Firth) and Ocean Flow Energy (another marine energy device) have already benefited from funding in a previous round.

Today's news follows last Friday's announcement from the UK Technology Strategy Board that it will base its ‘Offshore Renewable Energy Catapult’ innovation centre for offshore renewables (wind, wave and tidal) in Glasgow’s International Technology & Renewable Energy Zone (ITREZ).

This is a UK-wide consortium comprising the Carbon Trust, National Renewable Energy Centre (Narec), and Ocean Energy Innovation. It will receive up to £10m per annum over five years (£50 million) from the Technology Strategy Board.

Friday, February 10, 2012

FITs reductions get mixed reaction from renewables industry

PV solar modules on roof
One installer says the new proposals "could spell Armageddon for the industry".

The solar industry has responded with mixed feelings to DECC's new proposed changes to the Feed-In Tariff system for small scale renewable energy, announced yesterday.

In its response to the consultation on FITs for solar PV, the Government admits that 81% of respondents disagreed with their proposed reduced tariffs for solar PV installations and with the proposed reference date of 12 December 2011, compared to 12% who agreed.

Nevertheless, it is proceeding with the tariff reductions, and the appeal to the Supreme Court over the legality of the cut-off date for the high tariff rate.

The new tariff rate includes a drop to 21p/kWh for systems under 4kW, until June 30. It estimates the cost to taxpayers of all the new tariffs to be £1.2 billion over 25 years.

The reductions are based on research showing that the average cost of a 2.6kW system has dropped from £15,000 in 2010 to £12,000 in 2012. They aim to provide an approximate 5% rate of return to their owners for well located installations.

DECC projects around six million installations by 2020 based on the new tariffs, which over their lifetime will involve total costs, the Impact Assessment says, of £54.3 billion. [Note: the document contains several errors so this figure, high as it seems, may not be correct.]

Nevertheless, the Impact Assessment calculates a net benefit of around £400 million because the savings on social costs outweigh the overall costs, compared to a loss of £600 million under the original scenario.

The response does contain a concession to objectors from the solar industry: that the energy efficiency requirement that will be a condition of receiving FIT support should be based on an Energy Performance Certificate (EPC) rating of level ‘D’ or above, not the more stringent level ‘C’, as previously mooted, as this excluded too many homes.

Even so, it will almost certainly exclude the majority of old, solid-walled homes, that do not have wall insulation. DECC estimates that about half of all properties are already at the ‘D’ rating level.

A second concession is that the threshold at which the multi-installation tariff rates would apply has been increased from more than one PV installation to over twenty five. These rates are set at 80% of the standard tariffs to reflect the economies of scale gained from tackling several roofs at once.

Individuals or organisations with 25 or fewer installations will still be eligible for the individual rate.

"This will help community groups, small businesses and councils who do not benefit from the economies of scale that larger aggregators can obtain," said Energy Secretary Ed Davey.

DECC says it is using budget flexibility to cover the overspend resulting from high PV uptake of 240,000 installations over the last year, while still allowing £460 million for new installations over the Spending Review period.

The statement says this will not impact any further on consumer bills, since DECC is juggling overspends and underspends in the overall amount allocated to it for renewables under the Comprehensive Spending Review between the budgets for FITs, the Renewables Obligation, and the Warm Home Discount.

What happens beyond June?

A new consultation is beginning, and it is this which so far appears to be the most disheartening for the solar industry, for it proposes a reduction of 10% of solar PV tariffs every six months, with an added deployment trigger to ensure that subsidy levels keep in step with the market.

It is based on projections which estimate that system costs will fall by two thirds by 2020.

The proposals would make the tariffs from 1 July onwards dependent on the levels of actual deployment of new eligible installations seen in March and April.

They outline three ways of calculating the level, which could bring rates down as low as 13.6p/kWh for installations below or equal to 4kW.

This structure is aimed at protecting the scheme's budget and creating long term certainty for consumers and investors about what the FIT rates will be.

However, one installer said this "could spell Armageddon for the industry. Yet again the Government, even with a newly appointed Energy Secretary in Ed Davey, seem happy to watch the solar industry lurch from one crisis to the next," said David Hunt, a director with Eco Environments.

Friends of the Earth's Executive Director Andy Atkins also said that the "distinctly unclear solar road map leaves a dark cloud hanging over thousands of jobs".

But others welcomed the news.

Robert Goss, Managing Director of Conergy UK, called it "a very good day for British solar. There will be a boom in May and June as people look to complete installations before the June tariff reduction, with returns of seven to nine percent".

A spokesperson for Good Energy said they considered this "a step forward".

"The industry was in desperate need of more clarity and the government has moved to provide that," said its CEO, Juliet Davenport. "The rate changes proposed for solar PV are a reflection of the well-known problems with the FIT budget and it will take time to fully digest what they mean."

Ed Davey said the proposals, "will remove the need for emergency reviews, consistent with our commitment to a stable, predictable future for solar PV and for the whole FITs scheme.

"It will also help to keep the long-term costs of supporting solar PV down, increasing the number of people able to benefit from FITs over time," he added.

The consultation closes on 3 April.

Other FIT technologies

A further consultation has been launched on tariffs for technologies other than PV, including potential arrangements for community projects.

Significantly, it proposes an increase in the rate of return available for micro-combined heat and power, as ministers believe this could bring multiple benefits.

It also outlines potential tariff guarantees for wind, anaerobic digestion and hydro projects, to provide greater certainty about what rates of return they will receive.

This was welcomed by Don Leiper, Director of New Business at E.ON, which has been investing for a few years in micro-CHP for the home market.

He called it "a key step towards building a mass market for what is a smarter home heating and power solution that can save customers money and contribute to saving the planet".

E.ON calculates that under the new Feed-in Tariff scheme, homeowners installing microCHP could see financial savings of more than £600 per year, including electricity savings of £194 and export payments of £46.

This consultation closes on 26 April.

Concluding the announcements, Climate Change Minister Greg Barker said: “Our new plans will see almost two and a half times more installations than originally projected by 2015 which is good news for the sustainable growth of the industry.

"We are proposing a more predictable and transparent scheme as the costs of technologies fall, ensuring a long term, predictable rate of return that will closely track changes in prices and deployment."

The impact of the FIT cuts on solar have captured the headlines, but they have also affected small wind power installations.

Trade association RenewableUK said tariffs for these have been slashed by over 40%, while farm and small business-scale turbines have seen cuts of over a quarter, and it expressed anxiety over the possible impact on jobs.

Story: David Thorpe, News Editor