Thursday, 28 October 2010

Jeremy Leggett: Solar storm coming: the battle for the UK energy industry

Business Interview: Last week's Spending Review was just a skirmish in an industry 'civil war', the Solarcentury founder tells Sarah Arnott

Thursday, 28 October 2010
DAVID SANDISON

Jeremy Leggett has solar tiles on his Surrey home. He said: 'Climate change is a bigger risk than the credit crunch'

"It is a great big battle of ideas, and we haven't won it yet," says Jeremy Leggett. The green guru and founder of Solarcentury – the solar-photovoltaic (PV) supplier that is Britain's fastest-growing energy company – is in the vanguard of the battle. And while the clean-energy industry is breathing a sigh of relief that last week's Government Spending Review did not axe the feed-in tariff (FIT) widely hailed as a cornerstone of Britain's renewable-energy revolution, Mr Leggett has no time for complacency.

"We've had a lucky escape," he says. "There were massive forces of darkness lined up against us – a whole cadre of politicians and officials trying to, at the minimum, cut back the FIT and, if they could get away with it, shut it down completely."

Such manoeuvres were seen off by the progressive elements in the Coalition only "at the 11th hour", Mr Leggett says, citing sources "who could not be more highly placed". The FIT is central to the development of Britain's clean-energy sector, and the back-room machinations over its survival are just a single skirmish in the war for the future of Britain's energy supplies.

Mr Leggett could not be more serious: "The danger is that we will be ambushed by our collective stupidity before we have enough weapons to fight back. The mobilisation of renewable-energy technologies vital to our survival might not happen fast enough to counter the threats of global warming and peak oil."

The reception area at Solarcentury's head office near London's Waterloo station is littered with awards. And Mr Leggett himself is similarly feted: a loud voice on impending climate catastrophe and the author of two books on the subject.

But his career began on a different track entirely, and it was only after more than 10 years as a geologist working for the oil industry that he was spooked by evidence of global warming and made the break to join Greenpeace. Eight years later, in 1997, he set up Solarcentury, which is now Britain's biggest solar-PV supplier. "Solar is so incredibly neat: there are no moving parts, just sits there and makes electricity," he says.

With 130 staff, its ground-breaking solar-PV roof tile manufactured by Sony in Wales, and more than 40 per cent annual revenue growth for the past six years, Solarcentury's prospects are sunny indeed. "This business is all about 'seeing is believing'," Mr Leggett says. "At first blush it just doesn't sound right, but then people see the installation and see the meter going round, and then they get it."

But without the FIT, renewables cannot move from the fringes to the mainstream. Introduced in April by the Labour government, the scheme encourages small-scale clean-energy generation – such as solar-PV panels or roof-mounted wind turbines – by obliging electricity companies to buy any excess energy produced.

The impact was immediate. Solarcentury alone saw revenues grow by 76 per cent in the first half of the year and boosted its headcount by a fifth to cope with the influx of orders. And that is just the beginning. Analysts estimate the solar-PV market could hit as much as 250 megawatts (MW) next year, from a woeful 10 MW in 2009, thanks to the FIT. The Government's wider green targets need a whopping 2.3 gigawatts of solar energy by 2020, which translates into an extra 100,000 jobs in the industry, according to Mr Leggett.

But nothing will happen without the boost from the FIT. Although the £8.6bn scheme is funded by a levy on customer bills, the Coalition Government's commitment to balance Britain's books – requiring cuts on a scale not seen for a generation – almost spelled doom for the FIT as the vested interests of major power companies weighed in against it.

"There is a civil war in the energy industry between renewables and big centralised power," Mr Leggett says. "There is real resistance to the idea that grown-ups get their energy from renewables."

In both Whitehall and the energy majors, "retrograde thinkers" are already defending the status quo "with amazing vehemence" – and the battles are only just beginning. The rhetoric in recent years has been about an energy mix generating capacity of every sort, but the old and the new can no longer co-exist, Mr Leggett believes. And once renewables really take off, the war will begin in earnest, he says, pointing to evidence from Germany that even the fraction of electricity consumption supplied by solar PV is pulling down midday-peak electricity demand, clipping prices and hurting the profits of the energy giants.

The tricky part is that the forces ranged on either side of the great debate do not fall into easy groupings. "It's not black and white, or us against them: it's a battle of ideas," Mr Leggett repeats. "There are those people that get it and those that don't, and they are spread through both the big companies and the Government departments."

There are powerful forces ranged on the side of the "progressives". Mr Leggett flies to India this week, following up on the Prime Minister's high-profile trade mission in July which took along 29 chief executives – including Mr Leggett – to reaffirm Britain's links with its former colony and to drum up business. "Credit where credit's due ," Mr Leggett says. "Trees were shaken and I'm now flying back to talk about what could be the mother of all joint ventures."

But even such progress is but baby steps compared with the scale of the challenge. "Climate change is a bigger risk than the credit crunch, but the price of undermining the future for our kids features nowhere on the global balance sheet," Mr Leggett says. "We aren't going to be able to grow our way out of the problem. We need to have debate about measuring prosperity in different ways."

The survival of the FIT is just the beginning.

Jeremy Leggett

* Green guru Jeremy Leggett began his career working as a geologist for the oil industry.

* Spooked by evidence of global warming, Mr Leggett joined Greenpeace as an environmental campaigner in 1989.

* In 1997 he set up Solarcentury, which is now Britain's largest solar panel company.

* A vocal campaigner for climate change, Mr Leggett also founded charity SolarAid and the the first private equity fund for renewable energy.

* Mr Leggett is also on the Industry Peak Oil Taskforce and is the author of two books on the global energy crisis – 'The Carbon War' and 'Half Gone'.

Power failure: UK's wind farm plans in disarray

Objectors put green energy plans in doubt

By Oliver Wright, Whitehall Editor

Thursday, 28 October 2010

Hundreds of local revolts against wind farms have jeopardised the plan to use them to generate more than a quarter of Britain's electricity, figures seen by The Independent reveal.


New wind farms are needed to have any chance of creating enough renewable energy to reduce reliance on coal and gas power production. But planning approvals for them in England are at an all-time low, with only one in three applications getting the go-ahead from councils in the face of angry and organised opposition from people living nearby.

More than 230 separate local campaign groups against wind farms are operating across the UK, from Scotland and Kent to Norfolk, Yorkshire and Cornwall. These groups are scoring striking successes in defeating planned wind farms – even when faced with the weight of official recommendations.

In the last 12 months to September, there has been a 50 per cent drop in planning approvals in England, and approvals for windfarms in Scotland have also fallen.

The number of new windfarms coming “on-stream” (becoming active) has also fallen by 30 per cent – partly as a result of the recession.

The figures are revealed in a report on the state of the industry which will be published next week and has been seen by The Independent.

They cast doubt on the ability of the Government to reach its target of generating 20 per cent of all our energy needs from renewable sources by 2020. Changes to planning laws due to be announced later this year are expected to make it harder still to get planning permission.

Campaigners say that although windfarms maybe needed to combat global warming, the turbines – often as tall as the London Eye - are an eyesore in some of the most beautiful parts of the country, unacceptably noisy and can decimate local bird population. They suggest that all new windfarms should be built off-shore.

But environmentalists and industry experts say this is unrealistic. The time needed to build off-shore wind farms can be up to seven years, they are more expensive and the technology is still a relatively immature.

If Britain is to meet its renewable targets, they say, it is vital that onshore wind farms continue to be built at a significant rate well into the 2020s.

The situation is typified by instances such as those in North Yorkshire, where local politicians recently vetoed plans to build seven turbines in the face of official advice that they should go-ahead after a concerted local campaign.

Permission for the windfarm was later granted on appeal to the Planning Inspectorate but Maurice Cann, head of planning at Hambleton District Council, said that might not happen under the Government’s new localism plans.

“The court of public opinion plays a big role here,” he said. “I can see the situation getting worse. Some of these structures are 125 metres high and have a huge visual impact. It does not surprise me at all that so many applications are getting rejected.

“With the Government’s agenda to give a stronger voice to local politicians this is only going to become more of an issue.”

Local councils are to get more power to make planning decisions in their areas and the Planning Inspectorate, which has given the go-ahead to a number of wind farm projects turned down by local planning authorities, is to be abolished.

It now takes on average nearly two years from the point of application for windfarms to be approved by local councils and even then up to three-quarters will be unsuccessful, according to the report by RenewableUK, which represents the windfarm industry.

This compares with a 70 per cent approval rating for other major infrastructure projects such as supermarkets and roads.

“The industry has significant concerns for both the rate and consistency of local decision making on projects yet to come forward for determination,” the report concludes.

Gordon Edge, director of policy for RenewableUK, said that for every completed windfarm, 18 projects had been considered and rejected, either for feasibility or planning problems.

“One of the main issues for us is the cost and the unpredictability of the planning system. If we are going to meet our renewables target it is vital that we have a planning system that we can predict and depend on.”

Martyn Williams, from Friends of the Earth, said he could understand why people were opposed to windfarms in their local areas but a compromise needed to be found.

“The dilemma is that we believe people should be able to say what they want where they live but at the same time every part of the country has to do its bit if we are to get emissions down to a sustainable level.

“What we would favour is for local area to be given their own carbon targets and make there own decisions on how they get – and that is very relevant to [David] Cameron’s idea of the big society.”

Michael Hird, from the Campaign against Windfarms, said they were proud of the fact that they had managed to significantly slow down the growth of turbines across Britain.

“We are fighting from the trenches to slow down the growth of windfarms until people understand just how bad they are.

“The windfarm industry had hoped to created 10,000 windfarms by now and they’ve only managed 2,500. That is some success but there is still a long way to go.”

Mr Hird added that one of the problems they faced was the huge subsidies available to farmers prepared to have wind farms on their land.

“They’ve been unbelievably generous and a lot of farmers have been persuaded by the money on offer. The industry will build these things everywhere unless somebody stops them.”

Gary Porter, Chairman of the Local Government Association's Environment Board, insisted councillors were not to blame but the system.

“Councillors are elected to represent the interests and concerns of people in their area and will quite rightly take this into account when making decisions on whether to permit this sort of development,” he said.

“The industry must do more to make sure that they choose suitable sites which get local support. The refusals are not a reflection on councils but on the poor quality of the applications.

“It is only when local communities can see clearly the benefits of renewable energy at both national and local level that individual proposals for renewable energy will be welcomed as a matter of course.”

China Oil Company’s Carbon Play

China’s biggest oil company is betting that carbon trading has a future.


Bloomberg NewsAccording to industry news service Point Carbon, PetroChina has hired Garth Edward, an ex-Citigroup trader, to head a new UK-based emissions trading desk.

The Point Carbon report is available to subscribers here. Reuters — owned by the same company as Point Carbon — also has a report here.

It’s noteworthy that PetroChina is entering the market at a time when the future of the Kyoto Protocol, which provides the international framework for trading carbon credits, is in doubt.

Europe has the most vibrant carbon market, with many of the credits originating from investments in projects in China and India under the U.N. Clean Development Mechanism. CDMs have come under fire for helping fund projects that critics say shouldn’t have qualified for international subsidies.

Still, there are plenty of reasons for PetroChina to move into trading carbon. China is the world’s biggest energy producer and the world’s biggest source of carbon emissions. PetroChina, meanwhile, is China’s biggest oil producer.

Analysts predict that some form of carbon trading will still exist after Kyoto expires in 2012 - and there’s talk of China setting up a domestic carbon market. “Carbon markets will continue in Europe, emerge in Asia (Japan, Korea, maybe China later) even in the absence of a follower to Kyoto, which if it comes, will be weak,” Emmanuel Fages, head of power, gas and carbon coal research at Orbeo, the carbon trading arm of Societe Generale SA and Rhodia SA, wrote in an email to China Real Time. “Dynamics will be much more regional and bilateral now.”

Even the much maligned CDMs will continue, Fages says, though the investments will be in “small scale, more expensive renewable energy projects, organic methane capture or energy efficiency, dominantly based in poorer countries.” China, which has been so successful up till now, “probably will not be able to keep on the same recipe post-2012.”

PetroChina has already shown a commitment to carbon trading. It was one of the first companies to invest in setting up one of the domestic carbon exchanges, even though there was no legislation (such as domestic carbon caps) to support markets. The exchange has had a few modest trades.

There are signs that China is contemplating using carbon credits as a way to reach its goal of slowing the pace of carbon emissions. A promise to cut greenhouse gasses relative to economic output between 40% to 45% percent by 2020 from 2005 levels will likely be part of the country’s next five-year plan.

Already, companies in energy intensive industries that emit a lot of greenhouse gasses are investing in technology to reduce their emissions. If a domestic market is established, some companies with greenhouse gas emissions below their allotment could sell their credit to someone else.

If that market actually materializes – and it’s a big “if” at this point — PetroChina, which produces a lot of emissions from its refining and chemical businesses, will need to know how to trade.

Entering Europe could be the first step in eventually setting up shop back home.

–Shai Oster

Top scientists answer your 'toughest' energy questions

Post your questions on peak oil, wind power, nuclear power and more for our panel of six of the world's leading energy scientists

Adam Vaughan guardian.co.uk, Wednesday 27 October 2010 12.01 BST
Can the world shift entirely from fossil fuels to renewable sources such as wind, solar and marine power? Is nuclear power a good green alternative to coal and gas? When will the oil run out? And what should power the cars of tomorrow - oil, biofuels or electricity?

Here is your chance to get answers from a panel of six of the world's top energy scientists on today's big energy questions.

Just post your questions in the form below. We will pick the ten best questions and then the awards committee of the 2011 Global Energy Prize will answer them here on environmentguardian.co.uk in a week (3 November).

The panel
• Klaus Riedle - a world specialist in the sphere of gas turbine energetics and head of the Scientific Developments Department for high-temperature energetic turbines at Siemens. He was awarded Global Energy Prize in 2005 for his extensive work in the development and creation of powerful high-temperature gas turbines for steam and gas power plants.

• Dr Alvin W. Trivelpiece - a physicist and former director of the Oak Ridge National Laboratory, the Department of Energy's world leading research and manufacturing park with approximately 13,000 employees. Dr Trivelpiece was head of the 1986 US Delegation on Peaceful Uses of Atomic Energy to the USSR and was an early supporter of the Human Genome Project.

• Dr Tom Sanders - the manager of the Global Nuclear Futures Program at Sandia National Laboratories, and president of the American Nuclear Society from 2009-2010. Dr Sanders is a member of the US Department of Commerce's Civil Nuclear Trade Advisory Committee, and has advised numerous senior government officials on the development of nuclear energy in the USA.

• Dr Clement Bowman - founding chairman of the Alberta Oil Sands Technology and Research Authority (AOSTRA), and pioneered Canada's oilsands extraction project. For his work in this field Dr Bowman was awarded a Global Energy Prize in 2008. He is also a former Chair of the Alberta Government's Technology and Research Advisory Committee and President of the Alberta Research Council.

• Ambassador Pius Yasebasi Ng'wandu - holds a PhD from Stanford University and has held many political positions in Tanzania, including as the Minister of Science, Technology and Higher Education, and as the Minister of Water. He is founder and managing director of consulting group Yaseconsult, and from 1998 to 2005 was the Chairperson of the National Commission of UNESCO.

• Dr Robert Aymar - former Director-General of CERN, the European Organisation for Nuclear Research, one of the largest and most respective science research centres in the world. He held this role for five years, during which time he oversaw the completion and first experiments of the Large Hadron Collider, a particle accelerator designed to recreate the conditions just after the Big Bang.

US navy completes successful test on boat powered by algae

American navy sails towards sustainability with biofuel-powered gunboat

Suzanne Goldenberg, US environment correspondent guardian.co.uk, Wednesday 27 October 2010 20.46 BST
It looked like a pretty ordinary day on the water at the US naval base in Norfolk, Virginia: a few short bursts of speed, a nice tail wind, some test manoeuvres against an enemy boat.

But the 49ft gunboat had algae-based fuel in the tank in a test hailed by the navy yesterday as a milestone in its creation of a new, energy-saving strike force.

The experimental boat, intended for use in rivers and marshes and eventually destined for oil installations in the Middle East, operated on a 50/50 mix of algae-based fuel and diesel. "It ran just fine," said Rear Admiral Philip Cullom, who directs the navy's sustainability division.

The tests, conducted on Friday, are part of a broader drive within the navy to run 50% of its fleet on a mix of renewable fuels and nuclear power by 2020. The navy currently meets about 16% of its energy and fuel needs from nuclear power, with the rest from conventional sources.

The navy plans to roll out its first green strike force, a group of about 10 ships, submarines and planes running on a mix of biofuels and nuclear power, in 2012, with deployment in the field scheduled for 2016.

The green trend runs across all military services. The air force has been testing jet engines on a mix of conventional fuels and camelina, a crop similar to flax, and the Marine Corps recently sent a company to Afghanistan's Helmand province equipped with portable solar panels and solar chargers for their radio equipment.

Fuels made from algae oil burn more cleanly than fossil fuel, but preventing climate change is not a major factor in the Pentagon's calculations. "Our programme to go green is about combat capability, first and foremost," Cullom said. "We no longer want to be held hostage by one form of energy such as petroleum."

Over the last year, the Pentagon has become increasingly vocal about the burden of running oil convoys in battle zones. Fossil fuel is the number one import to US troops in Afghanistan, and the slow and lumbering convoys of oil tankers are an obvious target for enemy combatants.

Fossil fuels are also horrendously expensive. By the time it reaches a war zone, the true cost of a gallon of petrol is well over $400.

In theory, biofuels can be produced wherever the raw materials are available, possibly even in the combat zone. However, Cullom admitted that, as of today, algae-based fuels are no bargain. The current cost of a gallon of algae-diesel mix is $424 a gallon. "Any time you are an early adopter, it's not going to be $3 a gallon," he said.

The early versions of algae-based fuels had a short shelf life, with the fuel separating in the tank, sprouting, or even corroding engines. "They had some not very good characteristics at the end of the day," he admitted.

But the navy appears committed. Last month it placed an order for 150,000 gallons of algae-based fuel from a San Francisco firm.

Vestas to close five wind turbine plants

Vestas, the Danish wind turbine manufacturer, will cut 3,000 jobs as a result of the closures
Alex Hawkes
guardian.co.uk, Tuesday 26 October 2010 19.05 BST
Vestas, the Danish wind turbine manufacturer, said today it would close five production plants across Scandinavia and cut 3,000 jobs.

The group said the surge in demand for wind power it had hoped for in Europe had not materialised and it would have to shift production away from Denmark and Sweden towards Spain to protect profits.

It is closing four plants in Denmark and one in Sweden, including one in Viborg where it has been manufacturing since 1989. The factory moves follow Vestas' decision to move production of turbines away from the UK last year, when it closed its Isle of Wight facility.

It still employs 500 people in the UK, who are unlikely to be hit by the company's latest round of job cuts, but a spokesman could not it rule out. The company employs 250 research and development specialists on the Isle of Wight, and 250 other staff primarily at a sales centre in Warrington and a spare parts and repair plant in Bristol.

The cuts came as Britain celebrated more than £300m of investment in new manufacturing centres by rival manufacturers GE, Siemens and Gamesa. Following a boost from the government's Infrastructure Plan on Monday, GE said it would invest £100m in a manufacturing plant. Spanish firm Gamesa said it would spend €150m (£131m) setting up a worldwide centre for offshore wind, including a turbine factory; and Siemens said it would build an £80m wind turbine factory.

Monday's announcements were part of a commitment to a £60m upgrade of British ports to make them suitable for dealing with large offshore turbines.

A Vestas spokesman said the company kept an open mind about returning to manufacturing in the UK: "We are always considering [different options], though we don't have any current plans in the UK," he said.

Rupesh Madlani, an analyst at Barclays Capital, said the layoffs would take Vestas back to where it had been a year earlier: "Vestas has been a terrific job creator," he said. He also said the investment in ports could give the UK a significant advantage in offshore wind: "Germany has been the champion of solar and Spain onshore wind. The announcements that came from companies yesterday give the UK potential to be a champion for offshore wind."

Vestas's revenues for the third quarter fell to €1.72bn (£1.5bn) from €1.81bn in the same period a year earlier. Earnings before interest and tax stood at €185m, compared with €244m last time.The company said shutting down plants and staff lay-offs would cost it between €140m and €160m.