The collapse of Sun Biofuels has left hundreds of Tanzanians landless, jobless, and in despair for the future
Damian Carrington in Tanzania
The Observer, Sunday 30 October 2011
"People feel this is like the return of colonialism," says Athumani Mkambala, chairman of Mhaga village in rural Tanzania. "Colonialism in the form of investment."
A quarter of the village's land in Kisarawe district was acquired by a British biofuels company in 2008, with the promise of financial compensation, 700 jobs, water wells, improved schools, health clinics and roads. But the company has gone bust, leaving villagers not just jobless but landless as well. The same story is playing out across Africa, as foreign investors buy up land but leave some of the poorest people on Earth worse off when their plans fail.
The tale of London-based Sun Biofuels's misadventure in Kisarawe links the broken hopes of the villagers to offshore tax havens and mysterious new owners, tracked down by the Observer, and ultimately to petrol pumps in the UK and across Europe. The final link results from the mandatory blending of biofuels into European petrol and diesel. The aim is to reduce carbon emissions, but many say biofuels actually increase pollution. The G20 meeting next week will discuss the issue, following a stark report it received in June from the World Bank, World Trade Organisation, UN and others calling for biofuels subsidies to be abandoned.
"The situation in Kisarawe is heartbreaking, but the real tragedy is that it is far from unique. Communities across Africa and beyond are losing their land as a result of the massive biofuel targets set by our government," said Josie Cohen at development group ActionAid, which works in Kisarawe. "Like it or not, everyone who drives a car or catches a bus is involved in this problem, as all UK petrol and diesel is mixed with biofuels."
It was the promise of this lucrative export market that led Sun Biofuels to Africa to plant jatropha, the seeds of which can be processed into biodiesel. Mkambala's first contact with the company was in 2006 through the former Kisarawe MP, Athumani Janguo. "People trusted him. We thought all our problems would be solved," Mkambala told the Observer. He says no compensation has been paid for the land, on which villagers used to hunt animals, gather firewood, wild mushrooms and honey.
Mhaga has no electricity, and water has to be carried each day from a well several kilometres away, back to the small mud or concrete-block houses in which 1,000 people live. "Water is everything," says local activist Halima Ali, sitting with three of her children on the earth floor of their home. "Because they promised there would be water available, everyone was happy." There would be more time for farming and more time for her children to go to school, she says. But the company drilled only a 6in-wide hole in the village, despite having sunk a 100m well on the plantation. "We thought something very good had come to the village, to lift our standard of life, but now we are only crying," she says.
Sun Biofuels was the first company to come to the area and about 50 people in Mhaga rushed to take jobs at its plantation, some queueing for days for the £42-a-month salary. Saidi Abasi was one, but he was soon unhappy. He asked his employer why a promised pay rise failed to materialise. "The reply was 'if you want to work, work. If you don't, get out'," he says.
Abasi's job was spraying pesticides, but he claims he was initially given no protective equipment. "During spraying, we became like drunk people," he says. When his contract was terminated after Sun Biofuels went into administration, he says he was not paid the full severance pay due for his 18 months of service.
Mhaga's crowded school teaches 257 children and was promised new classrooms, books and materials, says teacher Rhamadani Lwinde, but all that appeared were a few portable blackboards. In addition to the village land, the company also took 670 hectares of Lwinde's family land, he says. He was offered 13m Tanzanian shillings (£4,835), which he says was not a good price, "but we were advised to accept it by the district authorities. If we had problems we would sort it out later, they said." In the end he says he was paid for just 85 hectares.
In the nearby village of Mtamba, villagers tell the same stories of broken promises and unpaid compensation. Tabu Koba says he was one of 11 people to lose land and one of nine who received no money at all. "We are very angry," he says. "My children have now left school but have nowhere to farm."
Sun Biofuels and two related companies went into administration in August, but their shares in a Tanzanian subsidiary – Sun Biofuels Tanzania, which did not go bust – were sold. The insolvency company directed the Observer to Christopher Egerton-Warburton and a company called Thirty Degrees East, based in the tax haven of Mauritius. Egerton-Warburton is a former Goldman Sachs banker and now a partner at the London-based merchant bank Lion's Head Global Partners. "We are part of a consortium that purchased the shares of Sun Biofuels Tanzania," he said. "Given that we are currently in the process of raising additional funds, I am not at liberty to discuss publicly or off the record about our long-term plans."
Egerton-Warburton said a site visit was not possible, but when the Observer went to the plantation it was able to interview farm manager Ambilikile Mwenisongole, who has worked there for four years and lives on site. He confirmed that fewer than 50 of the 700 workers remained and that the plantation was not operating due to the change of ownership. Mwenisongole said the progress on the water wells and other social services were "not on target because of the transition", but he denied that workers lacked tools or protective equipment and rejected claims that access to an ancestral graveyard had been blocked. He blamed the complaints on rumours spread by "lazy" villagers.
It was not possible for the villagers to get their land back, Mwenisongole said. "It is now owned by the government. The government was meant to compensate the land owners." In Tanzania, large land deals are done through the district government, which acquires the land and then leases it to companies. District officials have told villagers that Sun Biofuels did not pay all the money due, but refused to see the Observer.
Mwenisongole named Kenyan Alan Mayers as the new chief executive of Sun Biofuels Tanzania. Mayers said he could not comment on the previous owners' failure to provide wells and classrooms, but added: "We are looking into the matter and our community relations officer is in constant contact with the villages." Villagers say that there has been just one recent meeting.
Mayers said all compensation for land and all due severance pay had been paid, and that he was unaware of claims by ex-workers that national insurance payments were missing. He added: "We are focused on a positive, collaborative relationship with local people."
Yet Kisarawe MP Selemani Saidi Jafo said: "I am the MP and I am not yet informed there is a new owner. What is the secret behind it? I need investors to come to my district, especially to help bring employment for many people. I prefer a win-win project, but this is not a win-win." Why Sun Biofuels went bust is unknown, as attempts to contact the previous owners were unsuccessful. Whatever the reason, the company is far from alone. A large jatropha plantation created by a Dutch firm called Bioshape in the southern Tanzanian district of Kilwa has also gone bankrupt, leaving locals complaining of missing land payments. Also in Tanzania, a large ethanol biofuel project set up by Swedish company Sekab went bust. In both cases, the land has not been returned to its owners.
Further afield, in Ghana, a Norwegian-backed jatropha project has collapsed, while in Mozambique a UK-linked company called Procana, behind a huge ethanol project, has folded in acrimony. The Observer's investigations and those of journalist Stefano Valentino have identified at least 30 abandoned biofuels projects in 15 African countries.
The thirst for biofuels to meet the UK and EU's rising targets has led British companies to lead the charge into Africa. Half the 3.2m hectares of biofuel land identified is linked to 11 British companies, the biggest proportion of any country. ActionAid's estimate suggests that up to 6m hectares has been acquired. But with landowners frequently illiterate and unaware of their rights, the potential for exploitation is high.
In Kisarawe, the villagers do not know if the promises will ever be kept. They feel deeply betrayed and are increasingly angry as time passes without answers. "If we have not got our rights by December, we will slash the jatropha plants," says Mkambala. "That will be the clearest sign that we do not need this company here."
THE ENERGY DEBATE
What are biofuels?
Biofuels are petrol and diesel substitutes produced from plants. Their great attraction is that they can be used by existing cars and lorries and, because the plants absorb carbon dioxide when they grow, burning them does not fuel global warming - in theory.
What's the problem?
Many studies have now shown that existing biofuels, such as petrol substitutes produced from corn or diesel replacements from soya or palm oil, are actually worse for the environment than petrol, once you have factored in all the fertilisers, processing and transport. Furthermore, converting food into fuels has been widely linked to the rising food prices which have driven millions around the world into hunger.
Is the UK involved?
Yes. British fuel suppliers are already required to blend a few per cent of biofuel into all petrol and diesel, rising to 5% by 2013-14. This is despite 70% of these biofuels failing to meet the government's own green standards. The EU also has a target of 10% of all fuel being derived from plants by 2020. This is driving the demand for biofuels, with UK companies ahead in acquiring millions of hectares of land in Africa.
Is there any hope for biofuels?
So-called second-generation biofuels, which produce fuels from plant waste such as stalks or wood chips, would avoid the competition with food but are only at the research stage. Even further away, and perhaps even more promising, is producing fuels from algae grown in ponds or tubes. But the volumes of fuel currently used are so vast that, even with some environmentally friendly biofuels, we will need more efficient and more electric vehicles as well as better public transport if we are to tackle climate change.
Damian Carrington
Sunday, 30 October 2011
Hydropower turbine brings renewable energy to river Thames
Mapledurham Estate is now home to the biggest Archimedes screw in the UK
Fiona Harvey, environment correspondent
guardian.co.uk, Tuesday 25 October 2011 10.54 BST
The first hydropowered turbine to be built on the river Thames in recent times will be unveiled on Tuesday, taking over at the last working watermill still located on the river.
Mapledurham Estate on the banks of the Thames in Oxfordshire is now home to the biggest Archimedes screw in the UK – an update of millennia-old technology that will allow electricity to be generated from 280 Olympic swmming pools of river water washing through the turbine every day.
Several other hydropower plants have been proposed for the Thames, including one for the Queen at Windsor, but none are yet operational.
The 900-year-old estate – whose watermill was mentioned in the Domesday Book – supplies milk to Marks & Spencer, which has helped to finance the renewable energy project, providing the retailer with about 500,000kWh of renewable electricity each year, or enough to power one of its average stores.
John Eyston, owner of the estate, said the deployment of the hydropower technology was a long-held dream. He said: "It's been our long-standing ambition to generate renewable electricity from the last working watermill on the Thames. We're delighted that the hydropowered turbine is now up and running, providing a sustainable additional income for the future from this historic site."
Converting old watermills to produce electricity can be tricky, in part because of the need to gain planning permission and to build in protection for fish. At Mapledurham, the system has been designed so that fish can swim safely through the machinery, which is 3.5m in diameter, and it should not break down if hit by flooding or debris. Work on the turbine was begun in April and finished within six months.
Under its "plan A" project to be more environmentally sustainable, M&S is encouraging small suppliers, including farmers, to build renewable energy generation by guaranteeing to buy the electricity under a five year fixed price contract. This steady income stream helps the supplier to raise the finance needed for the upfront cost, and many of the schemes are also eligible for government subsidies under the renewable obligation or feed-in tariff schemes.
The watermill at Mapledurham Estate, which has been a favourite subject of British artists down the years, will be open to viewing by the public at certain times.
Fiona Harvey, environment correspondent
guardian.co.uk, Tuesday 25 October 2011 10.54 BST
The first hydropowered turbine to be built on the river Thames in recent times will be unveiled on Tuesday, taking over at the last working watermill still located on the river.
Mapledurham Estate on the banks of the Thames in Oxfordshire is now home to the biggest Archimedes screw in the UK – an update of millennia-old technology that will allow electricity to be generated from 280 Olympic swmming pools of river water washing through the turbine every day.
Several other hydropower plants have been proposed for the Thames, including one for the Queen at Windsor, but none are yet operational.
The 900-year-old estate – whose watermill was mentioned in the Domesday Book – supplies milk to Marks & Spencer, which has helped to finance the renewable energy project, providing the retailer with about 500,000kWh of renewable electricity each year, or enough to power one of its average stores.
John Eyston, owner of the estate, said the deployment of the hydropower technology was a long-held dream. He said: "It's been our long-standing ambition to generate renewable electricity from the last working watermill on the Thames. We're delighted that the hydropowered turbine is now up and running, providing a sustainable additional income for the future from this historic site."
Converting old watermills to produce electricity can be tricky, in part because of the need to gain planning permission and to build in protection for fish. At Mapledurham, the system has been designed so that fish can swim safely through the machinery, which is 3.5m in diameter, and it should not break down if hit by flooding or debris. Work on the turbine was begun in April and finished within six months.
Under its "plan A" project to be more environmentally sustainable, M&S is encouraging small suppliers, including farmers, to build renewable energy generation by guaranteeing to buy the electricity under a five year fixed price contract. This steady income stream helps the supplier to raise the finance needed for the upfront cost, and many of the schemes are also eligible for government subsidies under the renewable obligation or feed-in tariff schemes.
The watermill at Mapledurham Estate, which has been a favourite subject of British artists down the years, will be open to viewing by the public at certain times.
Solar subsidies to be cut by more than half
Government documents prematurely published online reveal feed-in tariff cut will double the payback period for householders
Adam Vaughan and Fiona Harvey
guardian.co.uk, Friday 28 October 2011 09.51 BST
Solar subsidies will be dramatically cut by more than half, according to government documents that were prematurely published online and quickly taken down.
The cut will almost double the payback period for householders, the document revealed, meaning someone installing £10-12,000 solar panels will only be in credit after 18 years rather than the current 10. The rate will be reduced from 43.3p per kilowatt hour of solar electricity to just 21p, the document revealed, cutting returns from around 7% to 4%.
Although the solar industry said it could bear the cuts, many companies said the reductions would hurt the poorest consumers hardest. Lower income households are more likely to rely on free deals whereby the installer takes the subsidy but the household gets free power – often enough to rescue people from fuel poverty.
While the PDF on the Energy Saving Trust website noted that "these proposals are currently under consultation and are not final", the figure is in line with earlier speculation that the rate will be cut by over half. It also said consumers considering solar should assume the 21p figure is what they will get if they install after 8 December.
Howard Johns, MD of Southern Solar, who spotted the document, tweeted: "It seems that EST know exactly what the outcome of the Fit review already – so much for consultation." Toby Ferenczi, chief technology officer at solar company Engensa, wrote: "This isn't acceptable and will result in massive job losses – don't be fooled."
The official announcement on the slashing of the feed-in tariff rate paid to householders looks set for Monday, with energy secretary Chris Huhne slated to make a statement in parliament, echoing tweets from the climate change minister, Greg Barker.
A Department of Energy and Climate Change (Decc) spokesman said: "We'll be publishing a full consultation on changes to the solar PV tariff changes in parliament on Monday. The Energy Saving Trust inadvertently published a draft of documentation on its website that was neither final nor accurate." However, the figures are line with those disclosed by the Guardian.
The spokesman added that if government took no action now, by 2014-15, Fit payments for solar would be cost consumers £980m annually, adding £26 to electricity bills by 2020. Average electricity bills are estimated to be £512 by 2020.
The government has argued that as the cost of solar power has come down, the subsidies should also be reduced as at present solar companies are absorbing some of the extra profits. Although the payback period has been reduced, the financial return at about 4% a year still beats most bank offerings and other financial investments available to individuals.
Prof Stephen Frankel, who chairs the Wadebridge Renewable Energy Network in Cornwall, which wants to install solar panels for free to local homes, warned the cuts would endanger the project.
"The Fit underpins these installations, and the benefits then flow not to outside speculators but are retained in the area and contribute to our community fund. This fund is available for local projects, as decided democratically by local people. We are now told that the Fit is to be curtailed drastically. If that is true, our efforts to act upon government advice and encouragement will have been for naught."
Daniel Green, of the solar installer HomeSun, said people without the money to invest £10,000 or more upfront in roof panels would be hardest hit, as suppliers would no longer find it worth their while to install solar panels for them.
HomeSun is one of a range of companies fitting solar panels to homes and community buildings for free: the roof-owner gains free energy, and the subsidies are kept by the installer. Proponents of these schemes argue that it helps to rescue people from fuel poverty.
Green said: "In the residential sector, providers of free solar panels are around 50% of installations and they will disappear at anything less than 28p per kWh. This means the less well-off will not be able to benefit from solar."
The news comes a day after the government signalled support for the 25,000 jobs in the fast-growing solar industry. Barker said the government wanted growth in solar panel installations to continue.
"We are determined not just to drive down carbon emissions but to build a successful, thriving, prosperous low-carbon economy," he told a solar power conference in Birmingham.
"I'm personally committed to ensuring that your industry can prosper in the longer term, sustaining green jobs at a critical time for our economy, jobs that people can build a career on [and] that can help drive the recovery."
Johns told the Guardian that the cuts would be a "disaster". "If they go ahead with this, the tariff is way too low, and all the social housing and free solar schemes – which make the feed-in tariffs exciting in terms of fuel poverty – will be destroyed." He added that this was the third government review into solar subsidies this year, saying: "We've invested business in PV [solar photovoltaic panels] and had it sliced up three times in a year. They [the government] have no credibility on this any more."
"You can't do U-turns like this without having to answer for it – it puts the spotlight firmly on the coaliton's green credentials," he said.
Seb Berry, head of public affairs at the UK's largest solar company, Solarcentury, said they would campaign against the proposals:
"Today's leak from the EST confirming the government's intention to more than halve the domestic tariff from 8 December to 21p makes a mockery of the feed-in tariff consultation process established by the Energy Act. The minister tried to reassure the industry yesterday that he supported this sector and valued our investment, jobs, innovation and rapid growth. Today those reassurances ring hollow."
Juliet Davenport, CEO of utility Good Energy, said: "Clearly we'll have to wait until Decc comes out with the final details on Monday, but if these rumours are true they are very concerning. Feed-in tariffs have been successful at the end of the day because they give households control over their energy supply, insulating themselves from price hikes and reducing their carbon footprint."
But the consultancy PwC argued that the deep fast cuts proposed by the government were better than the risk of a bubble which would lead to over capacity in the short-term, followed by cuts later, which would mean sharper job losses. "A deep and fast cut in Fits will be required to protect the UK solar industry from stalling or creating a market bubble before any rate changes take effect," the consultancy said in a report on Friday.
On Thursday, Germany, the world's biggest solar-panel market, said it will also cut subsidies for solar photovoltaic power. Rates will be reduced 15% from January 2012, the Bundesnetzagentur, the federal grid regulator, announced. Power from panels will earn €17.94to €24.43 a kilowatt-hour, depending on size and location.
Deep cuts to the popular feed-in-tariff have been overseen in recent years, with the German government arguing that economies of scale and improvements in technology are resulting in rapid reductions in the cost of the sector, meaning the industry no longer needs such a high-level state aid. Since Germany's Renewable Energy Sources Act (EEG) was introduced 11 years ago, providers are guaranteed fixed prices for the electricity they feed into the grid. Like the UK scheme, it is paid for by consumers, adding €3,59 a kilowatt hour on energy bills or, according to calculations by The Rheinish-Westphalian Institute for Economic Research (RWI)€ 85,4bn for the solar built between 2000 and 2010 and ensuing payments.
The Bundesnetzagentur revises the tariff regularly. A 9% reduction every year is given by law, but it can be higher depending on actual new installations. "During the past 12 months an additional new capacity of approximately 5.200 megawatts has been registered. This figure results in a 15% lower remuneration compared to the actual Fit for systems connected to the grid beginning January 1 2012," said Matthias Kurth, president of the federal grit regulator. The rate could have been cut by as much as 24% (the annual cut's ceiling) if a larger amount of solar, 7,500MW, had been added.
In 2010, Germany added a record 7.400 megawatts of solar power, and small green energy firms have become sizeable within just a few years. The renewable industry supports 380,000 jobs in total, 108,000 within the photovoltaic industry alone. "Germany is the global market leader in the renewable energy sector," the German environment minister, Norbert Röttgen, said .
However, German solar cell manufacturers can hardly keep up, now that prices are collapsing and Chinese suppliers are flooding market. "The prices were falling down more rapidly than German manufactures expected. but they will prevail in the long time because of the better quality," Daniel Kluge from the German Renewable Energy Federation said.
Probably, there will be a run in the next weeks, as a lot of home owners will cover their roofs with solar-modules before the 15 percent reduction at the beginning of January.
Adam Vaughan and Fiona Harvey
guardian.co.uk, Friday 28 October 2011 09.51 BST
Solar subsidies will be dramatically cut by more than half, according to government documents that were prematurely published online and quickly taken down.
The cut will almost double the payback period for householders, the document revealed, meaning someone installing £10-12,000 solar panels will only be in credit after 18 years rather than the current 10. The rate will be reduced from 43.3p per kilowatt hour of solar electricity to just 21p, the document revealed, cutting returns from around 7% to 4%.
Although the solar industry said it could bear the cuts, many companies said the reductions would hurt the poorest consumers hardest. Lower income households are more likely to rely on free deals whereby the installer takes the subsidy but the household gets free power – often enough to rescue people from fuel poverty.
While the PDF on the Energy Saving Trust website noted that "these proposals are currently under consultation and are not final", the figure is in line with earlier speculation that the rate will be cut by over half. It also said consumers considering solar should assume the 21p figure is what they will get if they install after 8 December.
Howard Johns, MD of Southern Solar, who spotted the document, tweeted: "It seems that EST know exactly what the outcome of the Fit review already – so much for consultation." Toby Ferenczi, chief technology officer at solar company Engensa, wrote: "This isn't acceptable and will result in massive job losses – don't be fooled."
The official announcement on the slashing of the feed-in tariff rate paid to householders looks set for Monday, with energy secretary Chris Huhne slated to make a statement in parliament, echoing tweets from the climate change minister, Greg Barker.
A Department of Energy and Climate Change (Decc) spokesman said: "We'll be publishing a full consultation on changes to the solar PV tariff changes in parliament on Monday. The Energy Saving Trust inadvertently published a draft of documentation on its website that was neither final nor accurate." However, the figures are line with those disclosed by the Guardian.
The spokesman added that if government took no action now, by 2014-15, Fit payments for solar would be cost consumers £980m annually, adding £26 to electricity bills by 2020. Average electricity bills are estimated to be £512 by 2020.
The government has argued that as the cost of solar power has come down, the subsidies should also be reduced as at present solar companies are absorbing some of the extra profits. Although the payback period has been reduced, the financial return at about 4% a year still beats most bank offerings and other financial investments available to individuals.
Prof Stephen Frankel, who chairs the Wadebridge Renewable Energy Network in Cornwall, which wants to install solar panels for free to local homes, warned the cuts would endanger the project.
"The Fit underpins these installations, and the benefits then flow not to outside speculators but are retained in the area and contribute to our community fund. This fund is available for local projects, as decided democratically by local people. We are now told that the Fit is to be curtailed drastically. If that is true, our efforts to act upon government advice and encouragement will have been for naught."
Daniel Green, of the solar installer HomeSun, said people without the money to invest £10,000 or more upfront in roof panels would be hardest hit, as suppliers would no longer find it worth their while to install solar panels for them.
HomeSun is one of a range of companies fitting solar panels to homes and community buildings for free: the roof-owner gains free energy, and the subsidies are kept by the installer. Proponents of these schemes argue that it helps to rescue people from fuel poverty.
Green said: "In the residential sector, providers of free solar panels are around 50% of installations and they will disappear at anything less than 28p per kWh. This means the less well-off will not be able to benefit from solar."
The news comes a day after the government signalled support for the 25,000 jobs in the fast-growing solar industry. Barker said the government wanted growth in solar panel installations to continue.
"We are determined not just to drive down carbon emissions but to build a successful, thriving, prosperous low-carbon economy," he told a solar power conference in Birmingham.
"I'm personally committed to ensuring that your industry can prosper in the longer term, sustaining green jobs at a critical time for our economy, jobs that people can build a career on [and] that can help drive the recovery."
Johns told the Guardian that the cuts would be a "disaster". "If they go ahead with this, the tariff is way too low, and all the social housing and free solar schemes – which make the feed-in tariffs exciting in terms of fuel poverty – will be destroyed." He added that this was the third government review into solar subsidies this year, saying: "We've invested business in PV [solar photovoltaic panels] and had it sliced up three times in a year. They [the government] have no credibility on this any more."
"You can't do U-turns like this without having to answer for it – it puts the spotlight firmly on the coaliton's green credentials," he said.
Seb Berry, head of public affairs at the UK's largest solar company, Solarcentury, said they would campaign against the proposals:
"Today's leak from the EST confirming the government's intention to more than halve the domestic tariff from 8 December to 21p makes a mockery of the feed-in tariff consultation process established by the Energy Act. The minister tried to reassure the industry yesterday that he supported this sector and valued our investment, jobs, innovation and rapid growth. Today those reassurances ring hollow."
Juliet Davenport, CEO of utility Good Energy, said: "Clearly we'll have to wait until Decc comes out with the final details on Monday, but if these rumours are true they are very concerning. Feed-in tariffs have been successful at the end of the day because they give households control over their energy supply, insulating themselves from price hikes and reducing their carbon footprint."
But the consultancy PwC argued that the deep fast cuts proposed by the government were better than the risk of a bubble which would lead to over capacity in the short-term, followed by cuts later, which would mean sharper job losses. "A deep and fast cut in Fits will be required to protect the UK solar industry from stalling or creating a market bubble before any rate changes take effect," the consultancy said in a report on Friday.
On Thursday, Germany, the world's biggest solar-panel market, said it will also cut subsidies for solar photovoltaic power. Rates will be reduced 15% from January 2012, the Bundesnetzagentur, the federal grid regulator, announced. Power from panels will earn €17.94to €24.43 a kilowatt-hour, depending on size and location.
Deep cuts to the popular feed-in-tariff have been overseen in recent years, with the German government arguing that economies of scale and improvements in technology are resulting in rapid reductions in the cost of the sector, meaning the industry no longer needs such a high-level state aid. Since Germany's Renewable Energy Sources Act (EEG) was introduced 11 years ago, providers are guaranteed fixed prices for the electricity they feed into the grid. Like the UK scheme, it is paid for by consumers, adding €3,59 a kilowatt hour on energy bills or, according to calculations by The Rheinish-Westphalian Institute for Economic Research (RWI)€ 85,4bn for the solar built between 2000 and 2010 and ensuing payments.
The Bundesnetzagentur revises the tariff regularly. A 9% reduction every year is given by law, but it can be higher depending on actual new installations. "During the past 12 months an additional new capacity of approximately 5.200 megawatts has been registered. This figure results in a 15% lower remuneration compared to the actual Fit for systems connected to the grid beginning January 1 2012," said Matthias Kurth, president of the federal grit regulator. The rate could have been cut by as much as 24% (the annual cut's ceiling) if a larger amount of solar, 7,500MW, had been added.
In 2010, Germany added a record 7.400 megawatts of solar power, and small green energy firms have become sizeable within just a few years. The renewable industry supports 380,000 jobs in total, 108,000 within the photovoltaic industry alone. "Germany is the global market leader in the renewable energy sector," the German environment minister, Norbert Röttgen, said .
However, German solar cell manufacturers can hardly keep up, now that prices are collapsing and Chinese suppliers are flooding market. "The prices were falling down more rapidly than German manufactures expected. but they will prevail in the long time because of the better quality," Daniel Kluge from the German Renewable Energy Federation said.
Probably, there will be a run in the next weeks, as a lot of home owners will cover their roofs with solar-modules before the 15 percent reduction at the beginning of January.
Thursday, 27 October 2011
Renewables could be UK's major power source by 2030: WWF
Report says up to 90% of electricity could come from wind, solar, tidal and other sustainable sources - without the need for nuclear
Damian Carrington
guardian.co.uk, Tuesday 25 October 2011 07.00 BST
The UK could be primarily powered by a secure and inexhaustible supply of renewable energy by 2030 without the need for new nuclear power plants, according to a report commissioned by WWF. Between 60% and 90% of the nation's electricity could come from wind, solar, tidal and other sustainable sources, with the rest supplied via an international supergrid and gas power stations.
"This report is inspiring, but also entirely realistic. It shows that a clean, renewable energy future really is within our grasp," said David Nussbaum, chief executive of WWF-UK. "Failure to commit to a high-renewables future would leave us facing the prospect of dangerous levels of climate change and high energy prices."
The soaring cost of energy bills has become a major political issue, with the prime minister, David Cameron, recently convening a meeting of industry energy leaders. The new report notes that meeting an existing 2020 renewable energy target will increase household bills by 4%, but that this could be more than offset by cuts in usage through better energy efficiency.
"Developing a low carbon and sustainable power sector in the UK is first and foremost a question of political will," concludes the report, which comes at a time when the Conservative party's commitment to be the "greenest government ever" is being seriously questioned.
The report states backing renewables would create hundreds of thousands of jobs and new economic growth. "Investing in clean energy offers us a means to tackle the two most crucial market failures that now confront the world: the financial crisis and climate change," said Nussbaum. "The only question that remains is, are we bold enough to take it?"
The report was welcomed by a host of businesses, including one the UK's "big six" energy suppliers, SSE. "It's a useful addition to the debate," said Keith MacLean, SSE's policy and research director. "Sufficient certainty that renewables will be a long term part of the energy system, well beyond the current 2020 cliff edge, is needed in order to allow the industry to mature and put renewables on a path of cost reduction that will steadily reduce and eliminate the need for support."
WWF's Positive Energy report differs from previous analyses by including a continuation of renewable energy building after 2020, as well as big increases in energy efficiency. The energy scenarios at the core of the report were developed by GL Garrad Hassan, the world's largest renewable energy consultancy and part of the GL Group, which also works in the oil and gas industries. In the highest renewables scenarios (90% of capacity), ambitious action on energy efficiency reduces the capital costs of renewables, gas and supergrid interconnectors from £216bn to £170bn. The report calls for a firm renewable target for 2030, to give long-term and stable financial support for the renewable industry.
The WWF report sets out a far more ambitious role for renewable electricity than the 45% predicted by the government's official advisers, the Committee on Climate Change, in its renewable energy review in May. But WWF points out that the build rates in its scenarios are actually lower than the government's own forecasts in its national renewable energy action plan and significantly below industry projections on realistic build rates. The difference is that in WWF's scenarios, rather than build rates falling rapidly after 2020, growth is maintained.
The electricity not generated from renewables in the report's scenarios comes instead from gas power. In the most ambitious 90% scenarios, the carbon emissions from those gas plants do not need to be captured and stored underground in order to meet the UK's climate change targets, but in the less ambitious 60% scenarios, about one-third of the gas plants would require carbon capture and storage (CCS) technology to be fitted. There are no coal plants of any sort in the scenarios, or nuclear plants.
The report warns of the danger in the less ambitious scenarios of being "locked-in" to high carbon emissions, because once unabated gas plants are built, operators will want to run them as much as possible to make a return. In the 60% scenarios, without significant supergrid interconnectors, the gas plants would run just 33% of the time.
The warning that a new "dash for gas" could lock in high carbon emissions is echoed in another report published on Tuesday, from MPs on the Commons select committee on energy and climate change. The MPs state the current proposals for electricity market reform put too much emphasis on building new gas plants to fill the gap left by the closure of about 19GW of nuclear, oil-fired and coal-fired plants by 2020, and not enough on decarbonising the power sector over the course of the 2020s in which gas without CCS will have "only a very limited role". The climate and energy secretary, Chris Huhne, told the Guardian last month that the government "will not consent so much gas plant so as to endanger our carbon dioxide goals".
The MPs' report also echoes WWF's call for more action on energy efficiency. "The government could be doing a lot more to reduce unnecessary energy wastage," said Tim Yeo MP, the Conservative chairman of the committee. "It needs to look at how it can use building regulations and energy efficiency standards for electrical appliances to cut waste and save cash on people's energy bills."
The committee's report additionally calls for much more gas storage capacity in the UK, to minimise the damage from supply interruptions or price spikes. The UK's current storage capacity is just 14 days' worth of gas, states the report, "a dangerously low level compared with France which has 87 days' worth of gas storage, Germany 69 and Italy 59."
Energy minister Charles Hendry said: "Energy security is right at the heart of the coalition's energy policy. We are reforming the electricity market to encourage investment in new power stations. We have also legislated for a mass roll-out of energy efficiency measures across Britain's housing stock through the green deal."
Damian Carrington
guardian.co.uk, Tuesday 25 October 2011 07.00 BST
The UK could be primarily powered by a secure and inexhaustible supply of renewable energy by 2030 without the need for new nuclear power plants, according to a report commissioned by WWF. Between 60% and 90% of the nation's electricity could come from wind, solar, tidal and other sustainable sources, with the rest supplied via an international supergrid and gas power stations.
"This report is inspiring, but also entirely realistic. It shows that a clean, renewable energy future really is within our grasp," said David Nussbaum, chief executive of WWF-UK. "Failure to commit to a high-renewables future would leave us facing the prospect of dangerous levels of climate change and high energy prices."
The soaring cost of energy bills has become a major political issue, with the prime minister, David Cameron, recently convening a meeting of industry energy leaders. The new report notes that meeting an existing 2020 renewable energy target will increase household bills by 4%, but that this could be more than offset by cuts in usage through better energy efficiency.
"Developing a low carbon and sustainable power sector in the UK is first and foremost a question of political will," concludes the report, which comes at a time when the Conservative party's commitment to be the "greenest government ever" is being seriously questioned.
The report states backing renewables would create hundreds of thousands of jobs and new economic growth. "Investing in clean energy offers us a means to tackle the two most crucial market failures that now confront the world: the financial crisis and climate change," said Nussbaum. "The only question that remains is, are we bold enough to take it?"
The report was welcomed by a host of businesses, including one the UK's "big six" energy suppliers, SSE. "It's a useful addition to the debate," said Keith MacLean, SSE's policy and research director. "Sufficient certainty that renewables will be a long term part of the energy system, well beyond the current 2020 cliff edge, is needed in order to allow the industry to mature and put renewables on a path of cost reduction that will steadily reduce and eliminate the need for support."
WWF's Positive Energy report differs from previous analyses by including a continuation of renewable energy building after 2020, as well as big increases in energy efficiency. The energy scenarios at the core of the report were developed by GL Garrad Hassan, the world's largest renewable energy consultancy and part of the GL Group, which also works in the oil and gas industries. In the highest renewables scenarios (90% of capacity), ambitious action on energy efficiency reduces the capital costs of renewables, gas and supergrid interconnectors from £216bn to £170bn. The report calls for a firm renewable target for 2030, to give long-term and stable financial support for the renewable industry.
The WWF report sets out a far more ambitious role for renewable electricity than the 45% predicted by the government's official advisers, the Committee on Climate Change, in its renewable energy review in May. But WWF points out that the build rates in its scenarios are actually lower than the government's own forecasts in its national renewable energy action plan and significantly below industry projections on realistic build rates. The difference is that in WWF's scenarios, rather than build rates falling rapidly after 2020, growth is maintained.
The electricity not generated from renewables in the report's scenarios comes instead from gas power. In the most ambitious 90% scenarios, the carbon emissions from those gas plants do not need to be captured and stored underground in order to meet the UK's climate change targets, but in the less ambitious 60% scenarios, about one-third of the gas plants would require carbon capture and storage (CCS) technology to be fitted. There are no coal plants of any sort in the scenarios, or nuclear plants.
The report warns of the danger in the less ambitious scenarios of being "locked-in" to high carbon emissions, because once unabated gas plants are built, operators will want to run them as much as possible to make a return. In the 60% scenarios, without significant supergrid interconnectors, the gas plants would run just 33% of the time.
The warning that a new "dash for gas" could lock in high carbon emissions is echoed in another report published on Tuesday, from MPs on the Commons select committee on energy and climate change. The MPs state the current proposals for electricity market reform put too much emphasis on building new gas plants to fill the gap left by the closure of about 19GW of nuclear, oil-fired and coal-fired plants by 2020, and not enough on decarbonising the power sector over the course of the 2020s in which gas without CCS will have "only a very limited role". The climate and energy secretary, Chris Huhne, told the Guardian last month that the government "will not consent so much gas plant so as to endanger our carbon dioxide goals".
The MPs' report also echoes WWF's call for more action on energy efficiency. "The government could be doing a lot more to reduce unnecessary energy wastage," said Tim Yeo MP, the Conservative chairman of the committee. "It needs to look at how it can use building regulations and energy efficiency standards for electrical appliances to cut waste and save cash on people's energy bills."
The committee's report additionally calls for much more gas storage capacity in the UK, to minimise the damage from supply interruptions or price spikes. The UK's current storage capacity is just 14 days' worth of gas, states the report, "a dangerously low level compared with France which has 87 days' worth of gas storage, Germany 69 and Italy 59."
Energy minister Charles Hendry said: "Energy security is right at the heart of the coalition's energy policy. We are reforming the electricity market to encourage investment in new power stations. We have also legislated for a mass roll-out of energy efficiency measures across Britain's housing stock through the green deal."
Greece in talks to repay debts with solar power
Debt-stricken Greece is in talks to see if it could repay debts to EU member states by providing them with solar energy
Arthur Neslen for EurActiv, part of the Guardian Environment Network
guardian.co.uk, Tuesday 25 October 2011 12.30 BST
EU's energy commissioner Gunther Oettinger, the director general for energy Philip Lowe, and the head of the EU's Athens task force Horst Reichenbach have discussed the idea of enabling Greece to repay some of its debts to EU member states, such as Germany, by providing them with solar energy.
EurActiv has learned that the EU's energy directorate general has been asked to investigate the idea's potential, which is so far hampered by a lack of enthusiasm from EU nations.
"Several German companies have expressed interest in the idea but it would clearly be more interesting if several member states were involved," a senior source told EurActiv.
Marlene Holzner, a spokesperson for the energy commissioner Gunther Oettinger, confirmed that talks were ongoing.
"There is a task force in the European Commission where we have energy experts looking into the question of how energy could help Greece to grow economically," she told EurActiv. "Solar is one topic, and energy efficiency is another."
Greece enjoys 50% more solar radiation than Germany and yet its solar energy output is about 80 times smaller, according to the Greek energy ministry.
Speaking at a Brussels policy meeting last week, a top EU official told EurActiv that there was "no reason" why Greece could not benefit from investment in solar energy on its own territory – or cooperate in its export to other countries.
But "it depends whether the country or countries concerned are willing to allow Greek promoters to take advantages of their national schemes," he said.
"There is a great need in Germany, and maybe with some other countries [involvement] it could get off the ground. It's certainly something which we're talking about with the Athens task force people, and they're quite interested in it," the EU official added.
Earlier this month, the German chancellor Angela Merkel called for her country's solar energy subsidies to be reduced and clean energy to be imported from countries such as Greece instead.
Such a move could smooth over Germany's transition from nuclear power in the aftermath of the Fukushima disaster.
The German economy minister Philipp Rösler subsequently visited Athens with 60 business leaders on an mission to explore investment opportunities.
"In the spirit of solidarity, it is the task of all Europeans to help Greece get back on its feet economically," he reportedly told the German broadcaster ZDF. "And we want to take German firms to Greece," he added.
The Greek economy has been in crisis since 2010, with a succession of multi-billion euro bailout packages and austerity measures failing to satisfy the international banking sector.
In September, Athens announced Project Helios, an optimistic plan for a quantum expansion of Greece's solar power production from 206MW to 2.2GW by 2020, and then 10GW by 2050.
The scheme is intended to attract up to €20 billion and create between 30,000 and 60,000 jobs, but it will first need to overcome what the Greek newspaper Ekathimerini rcalled "bureaucratic and legal obstacles".
According to Paul Van Son, the president of the Desertec Foundation, Project Helios could face other problems too.
"Greece is very hilly, the infrastructure is very expensive and there's less solar irradiation than in southern Spain," he told EurActiv.
Greek locations still had to be found "where the conditions are favourable enough to create a feasible business case, connect the electricity grids and move power from A to B," he added.
Van Son declined to say whether Desertec was currently talking to the Greek government about investments. But a Greek company, Turner Energy, recently bought a stake in the company, which is mostly active in North Africa.
Another leading US solar PV firm, First Solar, says it is looking at investment in Greece, partly "because Helios is coming around the corner," Christopher Burghardt, the firm's Vice President confirmed to EurActiv.
"The problem is that Greece has a real constraint on financing so my appeal to European governments is to provide financing guarantees to project investors, because that's what we need," he said.
Arthur Neslen for EurActiv, part of the Guardian Environment Network
guardian.co.uk, Tuesday 25 October 2011 12.30 BST
EU's energy commissioner Gunther Oettinger, the director general for energy Philip Lowe, and the head of the EU's Athens task force Horst Reichenbach have discussed the idea of enabling Greece to repay some of its debts to EU member states, such as Germany, by providing them with solar energy.
EurActiv has learned that the EU's energy directorate general has been asked to investigate the idea's potential, which is so far hampered by a lack of enthusiasm from EU nations.
"Several German companies have expressed interest in the idea but it would clearly be more interesting if several member states were involved," a senior source told EurActiv.
Marlene Holzner, a spokesperson for the energy commissioner Gunther Oettinger, confirmed that talks were ongoing.
"There is a task force in the European Commission where we have energy experts looking into the question of how energy could help Greece to grow economically," she told EurActiv. "Solar is one topic, and energy efficiency is another."
Greece enjoys 50% more solar radiation than Germany and yet its solar energy output is about 80 times smaller, according to the Greek energy ministry.
Speaking at a Brussels policy meeting last week, a top EU official told EurActiv that there was "no reason" why Greece could not benefit from investment in solar energy on its own territory – or cooperate in its export to other countries.
But "it depends whether the country or countries concerned are willing to allow Greek promoters to take advantages of their national schemes," he said.
"There is a great need in Germany, and maybe with some other countries [involvement] it could get off the ground. It's certainly something which we're talking about with the Athens task force people, and they're quite interested in it," the EU official added.
Earlier this month, the German chancellor Angela Merkel called for her country's solar energy subsidies to be reduced and clean energy to be imported from countries such as Greece instead.
Such a move could smooth over Germany's transition from nuclear power in the aftermath of the Fukushima disaster.
The German economy minister Philipp Rösler subsequently visited Athens with 60 business leaders on an mission to explore investment opportunities.
"In the spirit of solidarity, it is the task of all Europeans to help Greece get back on its feet economically," he reportedly told the German broadcaster ZDF. "And we want to take German firms to Greece," he added.
The Greek economy has been in crisis since 2010, with a succession of multi-billion euro bailout packages and austerity measures failing to satisfy the international banking sector.
In September, Athens announced Project Helios, an optimistic plan for a quantum expansion of Greece's solar power production from 206MW to 2.2GW by 2020, and then 10GW by 2050.
The scheme is intended to attract up to €20 billion and create between 30,000 and 60,000 jobs, but it will first need to overcome what the Greek newspaper Ekathimerini rcalled "bureaucratic and legal obstacles".
According to Paul Van Son, the president of the Desertec Foundation, Project Helios could face other problems too.
"Greece is very hilly, the infrastructure is very expensive and there's less solar irradiation than in southern Spain," he told EurActiv.
Greek locations still had to be found "where the conditions are favourable enough to create a feasible business case, connect the electricity grids and move power from A to B," he added.
Van Son declined to say whether Desertec was currently talking to the Greek government about investments. But a Greek company, Turner Energy, recently bought a stake in the company, which is mostly active in North Africa.
Another leading US solar PV firm, First Solar, says it is looking at investment in Greece, partly "because Helios is coming around the corner," Christopher Burghardt, the firm's Vice President confirmed to EurActiv.
"The problem is that Greece has a real constraint on financing so my appeal to European governments is to provide financing guarantees to project investors, because that's what we need," he said.
Chris Huhne attacks renewable energy critics
Climate secretary to tell conference that 'climate sceptics and armchair engineers' are selling the UK economy short
Press Association
guardian.co.uk, Wednesday 26 October 2011 06.30 BST
The climate and energy secretary, Chris Huhne, will attack "climate sceptics and armchair engineers" for criticising renewables, in a speech on Wednesday on the economic benefits of green energy.
Huhne will insist the government is backing renewable energy and has resolved to make the UK the largest market in Europe for offshore wind.
His speech to the annual renewable industry conference comes in the wake of the publication of government proposals to reduce subsidies for green technologies including onshore wind, although the plans contained better news on support for offshore wind, wave and tidal power.
And the solar industry is bracing itself for an announcement on the review of feed-in tariffs that pay people for the electricity they generate from small-scale renewables, which is expected to slash payments for solar electricity.
The industry claims the expected move will hit jobs and growth in the sector.
But Huhne will say today that renewable energy technologies will deliver a new industrial revolution, creating jobs and bringing investment into the UK.
And he will accuse an "unholy alliance" of short-termists, armchair engineers, climate sceptics and vested interests of selling the UK economy short by their refusals to acknowledge the benefits that renewables will bring.
Critics claim renewable energy is expensive and unreliable and that support for it adds to consumer bills, but proponents say shifting to green power reduces the reliance on fossil fuels which have driven recent large rises in household bills.
Huhne will tell the RenewableUK conference: "Across the length and breadth of Britain, new companies are creating new jobs and delivering the technologies that will power our future.
"At a time when closures and cuts dominate the news cycle, next-generation industries are providing jobs and sinking capital into Britain.
"I want to take aim at the curmudgeons and faultfinders who hold forth on the impossibility of renewables, the climate sceptics and armchair engineers who are selling Britain's ingenuity short.
"Yes, climate change is a man-made disaster. Yes, the UK is only 2% of global carbon emissions. But if we grasp the opportunity now our businesses and economy can be much more than 2% of the solution."
He will tell the conference that "we are not going to save our economy by turning our back on renewable energy".
"It is this three-party consensus that makes the UK such a a good place to invest. So I can today assure you that this government has resolved that we will be the largest market in Europe for offshore wind."
Louise Hutchins of Greenpeace said: "It is increasingly clear that there's a green war at the heart of government.
"On the one hand Chris Huhne is making a strong case for the strategic role renewable energy can play in creating jobs and reducing CO2 emissions, while at the same time George Osborne seems to be in perpetual denial about the benefits of investing in green growth.
"The renewables industry urgently needs a clear and coherent policy from the government so that lost confidence is restored.
"We'll know the coalition's priorities are sound if in the coming weeks ministers support smallscale solar and wind power at a level that will protect the growth in jobs and manufacturing in that sector, rather than slashing support as is currently rumoured."
But Simon Less, head of environment and energy at thinktank Policy Exchange, said: "Huhne's words are unhelpful and deeply worrying.
"Conflating those who want to see cost-effective carbon emissions reduction - in other words policies that can be sustained and so will deliver our long-term carbon targets - with climate science deniers, is insulting.
"To be greener, we must be cheaper.
"Existing renewable technologies have a key role to play in emissions reduction, alongside a range of other actions including increased energy efficiency, switching coal to gas generation, nuclear and emerging new technologies.
"What cannot be defended is wasting tens of billions of pounds on excessive short-term deployment of hugely expensive technologies, such as offshore wind. This damages decarbonisation," he said.
A report published by WWF on Tuesday said between 60 and 90% of the UK's energy could come from wind, solar, tidal and other sustainable sources by 2030.
Press Association
guardian.co.uk, Wednesday 26 October 2011 06.30 BST
The climate and energy secretary, Chris Huhne, will attack "climate sceptics and armchair engineers" for criticising renewables, in a speech on Wednesday on the economic benefits of green energy.
Huhne will insist the government is backing renewable energy and has resolved to make the UK the largest market in Europe for offshore wind.
His speech to the annual renewable industry conference comes in the wake of the publication of government proposals to reduce subsidies for green technologies including onshore wind, although the plans contained better news on support for offshore wind, wave and tidal power.
And the solar industry is bracing itself for an announcement on the review of feed-in tariffs that pay people for the electricity they generate from small-scale renewables, which is expected to slash payments for solar electricity.
The industry claims the expected move will hit jobs and growth in the sector.
But Huhne will say today that renewable energy technologies will deliver a new industrial revolution, creating jobs and bringing investment into the UK.
And he will accuse an "unholy alliance" of short-termists, armchair engineers, climate sceptics and vested interests of selling the UK economy short by their refusals to acknowledge the benefits that renewables will bring.
Critics claim renewable energy is expensive and unreliable and that support for it adds to consumer bills, but proponents say shifting to green power reduces the reliance on fossil fuels which have driven recent large rises in household bills.
Huhne will tell the RenewableUK conference: "Across the length and breadth of Britain, new companies are creating new jobs and delivering the technologies that will power our future.
"At a time when closures and cuts dominate the news cycle, next-generation industries are providing jobs and sinking capital into Britain.
"I want to take aim at the curmudgeons and faultfinders who hold forth on the impossibility of renewables, the climate sceptics and armchair engineers who are selling Britain's ingenuity short.
"Yes, climate change is a man-made disaster. Yes, the UK is only 2% of global carbon emissions. But if we grasp the opportunity now our businesses and economy can be much more than 2% of the solution."
He will tell the conference that "we are not going to save our economy by turning our back on renewable energy".
"It is this three-party consensus that makes the UK such a a good place to invest. So I can today assure you that this government has resolved that we will be the largest market in Europe for offshore wind."
Louise Hutchins of Greenpeace said: "It is increasingly clear that there's a green war at the heart of government.
"On the one hand Chris Huhne is making a strong case for the strategic role renewable energy can play in creating jobs and reducing CO2 emissions, while at the same time George Osborne seems to be in perpetual denial about the benefits of investing in green growth.
"The renewables industry urgently needs a clear and coherent policy from the government so that lost confidence is restored.
"We'll know the coalition's priorities are sound if in the coming weeks ministers support smallscale solar and wind power at a level that will protect the growth in jobs and manufacturing in that sector, rather than slashing support as is currently rumoured."
But Simon Less, head of environment and energy at thinktank Policy Exchange, said: "Huhne's words are unhelpful and deeply worrying.
"Conflating those who want to see cost-effective carbon emissions reduction - in other words policies that can be sustained and so will deliver our long-term carbon targets - with climate science deniers, is insulting.
"To be greener, we must be cheaper.
"Existing renewable technologies have a key role to play in emissions reduction, alongside a range of other actions including increased energy efficiency, switching coal to gas generation, nuclear and emerging new technologies.
"What cannot be defended is wasting tens of billions of pounds on excessive short-term deployment of hugely expensive technologies, such as offshore wind. This damages decarbonisation," he said.
A report published by WWF on Tuesday said between 60 and 90% of the UK's energy could come from wind, solar, tidal and other sustainable sources by 2030.
Wednesday, 19 October 2011
Europe’s Next Climate Debate?
By Alessandro Torello
In the draft of a document looking at how Europe’s energy picture could develop from now to 2050, the European Commission’s energy department is clearly hints that if other major economies worldwide don’t get serious in limiting greenhouse gas emissions, the European Union might have to consider whether it makes sense to go ahead with its own long-term climate change plans.
The document will likely change before being published later this year because the climate department of the commission, and possibly its President José Manuel Barroso are unlikely to accept such a wording.
However, the draft is the first hint of a possibly upcoming debate.
Environment ministers from almost 200 nations will gather in December in Durban, South Africa, to figure out how to advance a stall United Nations process to get a global deal on fighting global warming.
Expectations are low, as momentum for a legally binding agreement has faded since the failure of a similar conference in Copenhagen in 2009. The top EU negotiator considers that a commitment by governments to getting a binding deal in the next five years would already be a success.
However, it is not clear whether countries would be able to commit to that at the meeting in less than two months. If they aren’t, the EU will likely have to face the tough debate of how to go ahead with its own climate policy.
There is no question about its target of cutting CO2 emissions by 20% by 2020, as that is now binding law. But the EU has been developing its long-term policy options around the assumption that it would reduce emissions by at least 80% by 2050, in line with what industrialized countries as a group should do–according to the Intergovernmental Panel on Climate Change–to keep the global temperature rise within two degrees Celsius.
The draft suggests that this might have to be reconsidered, if there is no progress on a global deal, because otherwise the EU would be left alone in pursuing this goal and possibly end up penalizing its industry.
This is the view of the Commission’s energy department, traditionally close to industry. However, if EU countries consider that Durban doesn’t deliver enough progress, some governments will likely start raising questions on how sensible it is to promote big cuts in CO2 emissions in Europe.
Such cuts do impose additional costs on traditional industries and power producers –even as they also encourage investment in new, modern technologies– and the EU only accounts for 11% of global CO2 emissions.
Countries with big industrial bases such as Germany, France, Italy or Poland might raise concerns on whether it really makes sense to push forward if it is clear that international interest and ambition in fighting climate change is weakening.
In the draft of a document looking at how Europe’s energy picture could develop from now to 2050, the European Commission’s energy department is clearly hints that if other major economies worldwide don’t get serious in limiting greenhouse gas emissions, the European Union might have to consider whether it makes sense to go ahead with its own long-term climate change plans.
The document will likely change before being published later this year because the climate department of the commission, and possibly its President José Manuel Barroso are unlikely to accept such a wording.
However, the draft is the first hint of a possibly upcoming debate.
Environment ministers from almost 200 nations will gather in December in Durban, South Africa, to figure out how to advance a stall United Nations process to get a global deal on fighting global warming.
Expectations are low, as momentum for a legally binding agreement has faded since the failure of a similar conference in Copenhagen in 2009. The top EU negotiator considers that a commitment by governments to getting a binding deal in the next five years would already be a success.
However, it is not clear whether countries would be able to commit to that at the meeting in less than two months. If they aren’t, the EU will likely have to face the tough debate of how to go ahead with its own climate policy.
There is no question about its target of cutting CO2 emissions by 20% by 2020, as that is now binding law. But the EU has been developing its long-term policy options around the assumption that it would reduce emissions by at least 80% by 2050, in line with what industrialized countries as a group should do–according to the Intergovernmental Panel on Climate Change–to keep the global temperature rise within two degrees Celsius.
The draft suggests that this might have to be reconsidered, if there is no progress on a global deal, because otherwise the EU would be left alone in pursuing this goal and possibly end up penalizing its industry.
This is the view of the Commission’s energy department, traditionally close to industry. However, if EU countries consider that Durban doesn’t deliver enough progress, some governments will likely start raising questions on how sensible it is to promote big cuts in CO2 emissions in Europe.
Such cuts do impose additional costs on traditional industries and power producers –even as they also encourage investment in new, modern technologies– and the EU only accounts for 11% of global CO2 emissions.
Countries with big industrial bases such as Germany, France, Italy or Poland might raise concerns on whether it really makes sense to push forward if it is clear that international interest and ambition in fighting climate change is weakening.
Thousands of jobs will be lost without carbon capture funding, unions warn
UK will miss out on 'opportunity for global leadership' unless government steps up investment
BusinessGreen, part of the Guardian Environment Network
guardian.co.uk, Tuesday 18 October 2011 12.46 BST
Development of carbon capture technology has proved expensive. Photograph: Murdo MacLeod
The UK will become increasing reliant on volatile gas supplies and potentially forfeit thousands of jobs if the government fails to up its investment in carbon capture and storage (CCS).
That is the view of campaign group the Clean Coal Task Group (CCTG), of which the Trades Union Congress (TUC) and seven of its affiliated unions are members.
The UK is in danger of losing out to competitor nations in the race to develop low-cost, effective CCS technology without a substantial investment in carbon capture technology and a major reform of the UK's electricity market, the CCTG said in a submission to MPs yesterday.
EU emissions standards will force five of the country's 19 coal fired plants to close in the next four years, but even if the government's £1bn CCS competition goes to schedule, the UK will only have four fully operational plants by 2018
TUC general secretary Brendan Barber said this "isn't soon enough" to protect the coal industry's 10,000 jobs.
"If coal mining and coal power, and the thousands of people directly employed in these industries are to have a future in the UK's low-carbon economy, then we need to invest in carbon capture and storage technology, and quickly," he said. "Our coal power industries are too important, as is the need to reduce our greenhouse gas emissions, for this not to be the government's number one energy priority right now."
The group's Roadmap for Coal calls for negotiations to be concluded to build the UK's first demonstration plant, which was widely predicted to be at Longannet in Fife, before rumours suggested ScottishPower may pull out of the project.
The next three CCS projects in the competition should also be fast-tracked to come online before 2018 and infrastructure should be linked to heavy industry, such as steelworks, cement and chemical plants.
"Actions taken now to invest in carbon capture technology and reform our electricity market can secure this core industry in a low carbon economy for the long term," said Dr Mike Farley, director of technology policy liaison at Doosan Power Systems and chairman of the CCTG.
"Delays will mean losing a once-only opportunity for global leadership in the vital CCS industry."
Five reasons the 'green deal' policy on energy saving won't work
Lending households money for energy-saving improvements isn't the right way to cut costs and emissions
Sam Arie
guardian.co.uk, Tuesday 18 October 2011 18.29 BST
Sometimes government does all the wrong things, for all the right reasons. This is the case with the coalition's energy bill, which officially becomes law on Tuesday. The bill – now indeed an act – has been championed by Liberal Democrat Chris Huhne. It introduces a new policy called the green deal, under which households will be able to borrow funds for energy-saving home improvements. Repayments will be collected through gas and electric bills, and if you move house, the new occupier takes over the debt.
These are interesting ideas, and household CO2 emissions are certainly a problem. But the green deal is the not the right solution. Here are the five reasons why:
1. It does not address the problem of waste
In general, a culture of waste is encouraged both by energy prices that get cheaper the more you consume, and by a massive tax break for households – VAT for domestic energy is charged at the 5% rate, no matter how much you use. We should address these simple issues and get a grip on waste before we introduce more complex schemes.
2. It targets the wrong households
Because the central idea is that you don't have to keep up repayments after you move house, the scheme will be most attractive for people in properties that change hands frequently, including for example rental properties. Yet it is the largest properties that have the largest carbon footprints, and 90% of larger properties are owner-occupied. Owner occupiers move house on average every 12 years, so there is that much less incentive for them to take part.
3. It does nothing to improve the underlying economics of saving energy
If double glazing takes 50 years to pay back, it still takes 50 years under the green deal. All the deal does is reorganise the cashflows, and whether that leaves you better off in the end depends on how much you pay for the loan.
Since households with a mortgage can currently borrow at rates of between 2% and 5%, the green deal would have to be as good as interest free to offer a significant improvement. And if the loans come in at 6% to 9%, as the Green Deal Finance Company anticipates, the effect will be to make energy-saving investments even less attractive than they already are for most people.
In this scenario, Green Deal finance will only be attractive to households that cannot borrow at normal mortgage rates, for example because they have bad credit or no collateral. While it may be socially desirable to introduce green schemes for these households, it is not a good strategy for carbon reduction – quite simply because it is the richest households, not the poorest, which have the highest carbon emissions.
4. Many green deal plans will never be paid back
Payments will be collected via energy bills, but many energy bills go mysteriously unpaid, especially when people move house or change supplier. As of today, 3.2% of energy bills are in arrears, compared with 2.2% of mortgages. In the Commons debate, the minister for energy and climate change, Greg Barker, said the default rate for Green Deal loans "will be the same as the standard default rate for electricity bills generally", which he explained, "is a very low percentage".
But this is a catastrophic error of calculation: what he is overlooking is that everybody has an electricity bill, so the "very low" default rate he is talking about is an average including millions of households with excellent credit. But not everybody will take out a Green Deal loan. What the default rate turns out to be for the loans depends entirely on who signs up for them, and that in turn will depend on how much they cost.
5. Green deal loans may be expensive in their own right
According to the Bank of England, a conventional, unsecured personal loan currently costs between 11% and 16%. It is hard to see how a Green Deal loan, which is neither secured against collateral (like a mortgage) or credit checked against the individual (like a personal loan) could possibly be cheaper. The Green Deal will also have to cover the cost of a certified home survey and of administrating payments through the energy company. So the effective cost at market rates could easily reach 19% or 20% – in other words, about the same as a credit card or personal overdraft.
Taken together, the implication of these points is that the Green Deal will fail if it is offered at commercial lending rates. Take up will be limited to a segment of households that are less affluent, already economical in their energy usage, and which may well have difficulty repaying the loans in full. Meanwhile, the larger, more affluent households – which have the greatest potential to make carbon savings – will not participate, because they can already borrow the money elsewhere and at a cheaper rate.
On the other hand, if the green deal is subsidised by the government and offered at 0%, affluent households will be much more likely to take part. "Free" money would certainly boost the marketing of the green deal. But the cost to the taxpayer will be counted in the billions, while the beneficiaries, by definition, will be households who already have money.
This may make sense to politicians, offering as it does the prospect of a large handout to the middle classes just before the next election. But for the taxpayers who will foot the bill, it is a much less appealing prospect. Far better to forget about the green deal and focus instead on a simple rethink of energy pricing for high and wasteful users – which is, after all, what the Liberal Democrats promised us before the last election.
Sam Arie
guardian.co.uk, Tuesday 18 October 2011 18.29 BST
Sometimes government does all the wrong things, for all the right reasons. This is the case with the coalition's energy bill, which officially becomes law on Tuesday. The bill – now indeed an act – has been championed by Liberal Democrat Chris Huhne. It introduces a new policy called the green deal, under which households will be able to borrow funds for energy-saving home improvements. Repayments will be collected through gas and electric bills, and if you move house, the new occupier takes over the debt.
These are interesting ideas, and household CO2 emissions are certainly a problem. But the green deal is the not the right solution. Here are the five reasons why:
1. It does not address the problem of waste
In general, a culture of waste is encouraged both by energy prices that get cheaper the more you consume, and by a massive tax break for households – VAT for domestic energy is charged at the 5% rate, no matter how much you use. We should address these simple issues and get a grip on waste before we introduce more complex schemes.
2. It targets the wrong households
Because the central idea is that you don't have to keep up repayments after you move house, the scheme will be most attractive for people in properties that change hands frequently, including for example rental properties. Yet it is the largest properties that have the largest carbon footprints, and 90% of larger properties are owner-occupied. Owner occupiers move house on average every 12 years, so there is that much less incentive for them to take part.
3. It does nothing to improve the underlying economics of saving energy
If double glazing takes 50 years to pay back, it still takes 50 years under the green deal. All the deal does is reorganise the cashflows, and whether that leaves you better off in the end depends on how much you pay for the loan.
Since households with a mortgage can currently borrow at rates of between 2% and 5%, the green deal would have to be as good as interest free to offer a significant improvement. And if the loans come in at 6% to 9%, as the Green Deal Finance Company anticipates, the effect will be to make energy-saving investments even less attractive than they already are for most people.
In this scenario, Green Deal finance will only be attractive to households that cannot borrow at normal mortgage rates, for example because they have bad credit or no collateral. While it may be socially desirable to introduce green schemes for these households, it is not a good strategy for carbon reduction – quite simply because it is the richest households, not the poorest, which have the highest carbon emissions.
4. Many green deal plans will never be paid back
Payments will be collected via energy bills, but many energy bills go mysteriously unpaid, especially when people move house or change supplier. As of today, 3.2% of energy bills are in arrears, compared with 2.2% of mortgages. In the Commons debate, the minister for energy and climate change, Greg Barker, said the default rate for Green Deal loans "will be the same as the standard default rate for electricity bills generally", which he explained, "is a very low percentage".
But this is a catastrophic error of calculation: what he is overlooking is that everybody has an electricity bill, so the "very low" default rate he is talking about is an average including millions of households with excellent credit. But not everybody will take out a Green Deal loan. What the default rate turns out to be for the loans depends entirely on who signs up for them, and that in turn will depend on how much they cost.
5. Green deal loans may be expensive in their own right
According to the Bank of England, a conventional, unsecured personal loan currently costs between 11% and 16%. It is hard to see how a Green Deal loan, which is neither secured against collateral (like a mortgage) or credit checked against the individual (like a personal loan) could possibly be cheaper. The Green Deal will also have to cover the cost of a certified home survey and of administrating payments through the energy company. So the effective cost at market rates could easily reach 19% or 20% – in other words, about the same as a credit card or personal overdraft.
Taken together, the implication of these points is that the Green Deal will fail if it is offered at commercial lending rates. Take up will be limited to a segment of households that are less affluent, already economical in their energy usage, and which may well have difficulty repaying the loans in full. Meanwhile, the larger, more affluent households – which have the greatest potential to make carbon savings – will not participate, because they can already borrow the money elsewhere and at a cheaper rate.
On the other hand, if the green deal is subsidised by the government and offered at 0%, affluent households will be much more likely to take part. "Free" money would certainly boost the marketing of the green deal. But the cost to the taxpayer will be counted in the billions, while the beneficiaries, by definition, will be households who already have money.
This may make sense to politicians, offering as it does the prospect of a large handout to the middle classes just before the next election. But for the taxpayers who will foot the bill, it is a much less appealing prospect. Far better to forget about the green deal and focus instead on a simple rethink of energy pricing for high and wasteful users – which is, after all, what the Liberal Democrats promised us before the last election.
Monday, 17 October 2011
The Quest: Energy, Security and the Remaking of the Modern World by Daniel Yergin – review
An enjoyable assessment of our energy needs from an industry insider
Derek Brower
The Observer, Sunday 16 October 2011
Forget Lehman Brothers and Greece. The oil-price spike of 2008 caused the crash and the surge in crude markets since the beginning of 2011 is bringing the world's economy to the brink again. In just four years, oil prices rose by more than 300% to their peak above $147 a barrel in the summer of 2008. The spike meant the big consumer economies of the west were transferring an extra $700bn a year to cover their fuel bill, a colossal cash transfer from high-spending economies to high-saving oil exporters such as Saudi Arabia. Soaring fuel costs ate away disposable incomes. Triple-digit oil prices are stunting the recovery now.
Daniel Yergin's new book, The Quest, makes oil the moving force in the post-cold war era. Crude oil price fluctuations have wrecked economies and saved them. The Soviet empire flourished on the back of the oil price shocks of the 1970s, and collapsed when oil prices plummeted in the mid-80s. The optimism of Clinton's America and the onward march of globalised trade in the 90s came during a period of low oil prices; the pessimism of the past few years arrived with the unprecedented surge in its cost.
The quest for secure oil supplies has wreaked fateful alliances and consequences. America's long strategic alliance with Saudi Arabia, home to the world's biggest endowment of oil, put the infidel's troops close to the holy cities of Mecca and Medina – and gave Osama bin Laden his cause. The invasion of Iraq and the bungled occupation were direct results of 9/11, however tenuous the links between Saddam Hussein and al-Qaida.
Meanwhile, oil has motivated other bogeymen. Hugo Chavez's Bolívarian revolution in Venezuela depended on el presidente's plundering of oil revenue. The drive to control the commanding heights of Russia's economy was behind Vladimir Putin's campaign against Mikhail Khodorkovsky, the jailed tycoon, and the key to Russian ambitions on the world stage.
This chessboard reading of world history is compelling. Yergin won a Pulitzer in 1992 for his earlier book, The Prize, a political history of the oil industry. This one picks up where the other ended and even squeezes in references to the Arab Spring. The book's range is impressive, covering everything from the rise of China to the decline of the US car industry to power blackouts in California to violence in Iraq, Nigeria and other poor countries where oil's curse has struck.
As co-founder and chairman of IHS Cera, a lucrative consultancy for the energy industry, Yergin is no mere bystander in the events he chronicles. An annual conference his company runs in Houston has become the sector's Davos. Yergin, one can assume, is on first-name terms with many of The Quest's main players.
While this ringside seat is often an advantage, The Quest sometimes reads like the authorised biography of the oil industry. Insiders know from other books just what kind of nitty-gritty was involved, for example, in the US's efforts to get pipelines built from the Caspian Sea to western markets. Yergin only alludes to the corruption.
Yergin's gift is in distilling dry topics into a readable narrative. He debunks notions of peak oil, while noting that its pessimism – that the world is running out of the stuff that keeps our economies ticking over – pervaded the market during the price surge of 2004-08. Violence in Nigeria and Iraq, hurricane Katrina, Venezuela's problems and China's sudden emergence were behind the spike, not a geological shortage of oil.
Yergin has become a hate figure for many peak oilers, who see him as an industry apologist. But he sounds more sane than his critics and has data on his side. He writes that the world has used just 1 trillion barrels of oil since the industry started in the early 19th century, and another 4 trillion are thought to exist.
That is a crowd-pleasing argument for Yergin's many admirers in the oil industry. But The Quest doesn't duck the paradox of the fossil fuel business: that the world wants more of the oil, gas and coal on which economic growth has depended – but risks catastrophe as it burns them.
Yergin brooks no climate-denial. He thinks human ingenuity (electric cars, biofuels, better batteries, etc) will solve the problem. But the scale needed is daunting. Capturing carbon, for example, is the preferred solution of the fossil fuel industry, but it would require a near "parallel universe", with a new industry comparable in size to the existing energy one. "It is sobering to realise that 150 years and trillions of dollars were required to build that existing system for oil," Yergin writes.
The Quest's energy industry is not the malevolent force of most books about oil but a benevolent one, adapting to humanity's ever-growing needs. Thus Canada's oil sands or hydraulic fracturing to break open trapped deposits of oil and gas are innovations turning gloomy supply forecasts on their head – not rapacious new techniques to pollute the planet. Yergin passes lightly over environmentalists' objections to such developments.
That reflects a new mood. The voice of the west's greens has come to seem less hard-hitting during the downturn, when consumer enthusiasm for pricier renewables has waned. Even Blackpool may now have abundant new deposits of natural gas and development isn't likely to stall on ecological grounds.
And anyway, the west is no longer where it's at in energy terms. Opec and other big oil producers see their future in the growing markets of the east, not of the stagnant west. Chinese people already buy more cars than Americans, Yergin points out, and China will soon overtake the US in crude consumption. Western consumers should hope for the best and get used to paying Chinese prices for their oil.
Derek Brower is editor of Petroleum Economist and writes for the Economist.
Derek Brower
The Observer, Sunday 16 October 2011
Forget Lehman Brothers and Greece. The oil-price spike of 2008 caused the crash and the surge in crude markets since the beginning of 2011 is bringing the world's economy to the brink again. In just four years, oil prices rose by more than 300% to their peak above $147 a barrel in the summer of 2008. The spike meant the big consumer economies of the west were transferring an extra $700bn a year to cover their fuel bill, a colossal cash transfer from high-spending economies to high-saving oil exporters such as Saudi Arabia. Soaring fuel costs ate away disposable incomes. Triple-digit oil prices are stunting the recovery now.
Daniel Yergin's new book, The Quest, makes oil the moving force in the post-cold war era. Crude oil price fluctuations have wrecked economies and saved them. The Soviet empire flourished on the back of the oil price shocks of the 1970s, and collapsed when oil prices plummeted in the mid-80s. The optimism of Clinton's America and the onward march of globalised trade in the 90s came during a period of low oil prices; the pessimism of the past few years arrived with the unprecedented surge in its cost.
The quest for secure oil supplies has wreaked fateful alliances and consequences. America's long strategic alliance with Saudi Arabia, home to the world's biggest endowment of oil, put the infidel's troops close to the holy cities of Mecca and Medina – and gave Osama bin Laden his cause. The invasion of Iraq and the bungled occupation were direct results of 9/11, however tenuous the links between Saddam Hussein and al-Qaida.
Meanwhile, oil has motivated other bogeymen. Hugo Chavez's Bolívarian revolution in Venezuela depended on el presidente's plundering of oil revenue. The drive to control the commanding heights of Russia's economy was behind Vladimir Putin's campaign against Mikhail Khodorkovsky, the jailed tycoon, and the key to Russian ambitions on the world stage.
This chessboard reading of world history is compelling. Yergin won a Pulitzer in 1992 for his earlier book, The Prize, a political history of the oil industry. This one picks up where the other ended and even squeezes in references to the Arab Spring. The book's range is impressive, covering everything from the rise of China to the decline of the US car industry to power blackouts in California to violence in Iraq, Nigeria and other poor countries where oil's curse has struck.
As co-founder and chairman of IHS Cera, a lucrative consultancy for the energy industry, Yergin is no mere bystander in the events he chronicles. An annual conference his company runs in Houston has become the sector's Davos. Yergin, one can assume, is on first-name terms with many of The Quest's main players.
While this ringside seat is often an advantage, The Quest sometimes reads like the authorised biography of the oil industry. Insiders know from other books just what kind of nitty-gritty was involved, for example, in the US's efforts to get pipelines built from the Caspian Sea to western markets. Yergin only alludes to the corruption.
Yergin's gift is in distilling dry topics into a readable narrative. He debunks notions of peak oil, while noting that its pessimism – that the world is running out of the stuff that keeps our economies ticking over – pervaded the market during the price surge of 2004-08. Violence in Nigeria and Iraq, hurricane Katrina, Venezuela's problems and China's sudden emergence were behind the spike, not a geological shortage of oil.
Yergin has become a hate figure for many peak oilers, who see him as an industry apologist. But he sounds more sane than his critics and has data on his side. He writes that the world has used just 1 trillion barrels of oil since the industry started in the early 19th century, and another 4 trillion are thought to exist.
That is a crowd-pleasing argument for Yergin's many admirers in the oil industry. But The Quest doesn't duck the paradox of the fossil fuel business: that the world wants more of the oil, gas and coal on which economic growth has depended – but risks catastrophe as it burns them.
Yergin brooks no climate-denial. He thinks human ingenuity (electric cars, biofuels, better batteries, etc) will solve the problem. But the scale needed is daunting. Capturing carbon, for example, is the preferred solution of the fossil fuel industry, but it would require a near "parallel universe", with a new industry comparable in size to the existing energy one. "It is sobering to realise that 150 years and trillions of dollars were required to build that existing system for oil," Yergin writes.
The Quest's energy industry is not the malevolent force of most books about oil but a benevolent one, adapting to humanity's ever-growing needs. Thus Canada's oil sands or hydraulic fracturing to break open trapped deposits of oil and gas are innovations turning gloomy supply forecasts on their head – not rapacious new techniques to pollute the planet. Yergin passes lightly over environmentalists' objections to such developments.
That reflects a new mood. The voice of the west's greens has come to seem less hard-hitting during the downturn, when consumer enthusiasm for pricier renewables has waned. Even Blackpool may now have abundant new deposits of natural gas and development isn't likely to stall on ecological grounds.
And anyway, the west is no longer where it's at in energy terms. Opec and other big oil producers see their future in the growing markets of the east, not of the stagnant west. Chinese people already buy more cars than Americans, Yergin points out, and China will soon overtake the US in crude consumption. Western consumers should hope for the best and get used to paying Chinese prices for their oil.
Derek Brower is editor of Petroleum Economist and writes for the Economist.
Energy firms' profits per customer rise 733%, says Ofgem
Energy regulator proposes 'radical reform' of energy market and simpler tariffs as it reveals net margin for typical customers has risen from £15 in June to £125 in October
Terry Macalister, Dan Milmo and Lisa Bachelor
guardian.co.uk, Friday 14 October 2011 14.41 BST
A furious row has broken out today between the energy regulator and the "big six" power companies after Ofgem in effect accused the utilities of profiteering by increasing their profit per dual-fuel customer by 733% – from £15 to £125 – through a slew of price rises.
Alistair Buchanan, the Ofgem chief executive, said a "radical break" was needed in the way that energy companies operated to rebuild trust among householders and other power users.
"When consumers face energy bills at around £1,345 [per annum] they must have complete confidence that this price is set by companies competing in a fully competitive market. At the moment that is not the case," he said.
Ofgem said it was determined to ensure that companies provided simple tariffs and clearer bills in the future to help consumers baffled by the 400 different tariffs currently provided.
The latest initiative comes after a hail of criticism of the big six at the political party conferences amid rising concerns about the number of householders falling into fuel poverty.
But the figures used by the regulator were immediately criticised by the energy firms, which believe that Buchanan is responding to what they see as unjustified political pressure.
Phil Bentley, managing director of British Gas, said Ofgem's report was misleading. "Their methodology is flawed, excluding, as it does, the discounts we give our customers and the benefits they receive from fixed price contracts, as well as understating our commodity costs.
"In 2010 alone, this methodology overstated industry profits by 100% compared with Ofgem's own analysis of audited accounts."
Volker Beckers, chief executive of RWE npower, said his company made just £1.50 profit on every £100 spent, while making a loss per average customer between 2004 and 2009.
"These are not the figures associated with an industry that is profiteering or uncompetitive, and despite this challenging financial climate, RWE still managed to invest over £1bn into new, more efficient energy infrastructure for the UK in each of the last three years," he argued.
But the energy companies are fighting a wave of attacks over the way they have been operating with fines for doorstep mis-selling and criticism over the slow speed with which they respond to a fall ion wholesale prices.
Yesterday, an undercover investigation by the consumer body Which? revealed that the number of energy tariffs available to householders is so vast, and the options so complex, that staff at energy companies have no idea which is the best deal.
Which? called each of the six major energy suppliers 12 times in a week to get advice on the cheapest deal. Despite being asked clearly for the lowest cost option in each case, in nearly a third of the calls the firms failed to offer their cheapest tariff. Staff also gave questionable advice about potential savings, cashback deals and fixed prices.
Britain's energy minister, Chris Huhne, pledged last month "to get tough with the big six energy companies", while Ed Miliband, the Labour party leader, pledged to abolish a "rigged" energy market that has allowed the companies to achieve market dominance.
Ofgem has already threatened energy companies with a formal referral to the Competition Commission if they do not transform their pricing structure to stop confusing customers.
It has promised to come up with detailed proposals for reforming the energy market for business customers before the end of next month, further discussions in December on how to bring new entrants into the market and in the new year will reveal the findings of an independent inquiry into energy company accounts.
Buchanan is aware that a looming £200bn investment drive to green the UK's energy supply would only put further pressure on bills, adding further momentum to the need for reform.
"That is why a radical break with the past is needed. Ofgem's tariff reforms offer the quickest way to create a market where consumers can have confidence that prices are set by effective competition. Suppliers have told Ofgem they want to restore confidence in the industry and now they have the chance to do so."
Terry Macalister, Dan Milmo and Lisa Bachelor
guardian.co.uk, Friday 14 October 2011 14.41 BST
A furious row has broken out today between the energy regulator and the "big six" power companies after Ofgem in effect accused the utilities of profiteering by increasing their profit per dual-fuel customer by 733% – from £15 to £125 – through a slew of price rises.
Alistair Buchanan, the Ofgem chief executive, said a "radical break" was needed in the way that energy companies operated to rebuild trust among householders and other power users.
"When consumers face energy bills at around £1,345 [per annum] they must have complete confidence that this price is set by companies competing in a fully competitive market. At the moment that is not the case," he said.
Ofgem said it was determined to ensure that companies provided simple tariffs and clearer bills in the future to help consumers baffled by the 400 different tariffs currently provided.
The latest initiative comes after a hail of criticism of the big six at the political party conferences amid rising concerns about the number of householders falling into fuel poverty.
But the figures used by the regulator were immediately criticised by the energy firms, which believe that Buchanan is responding to what they see as unjustified political pressure.
Phil Bentley, managing director of British Gas, said Ofgem's report was misleading. "Their methodology is flawed, excluding, as it does, the discounts we give our customers and the benefits they receive from fixed price contracts, as well as understating our commodity costs.
"In 2010 alone, this methodology overstated industry profits by 100% compared with Ofgem's own analysis of audited accounts."
Volker Beckers, chief executive of RWE npower, said his company made just £1.50 profit on every £100 spent, while making a loss per average customer between 2004 and 2009.
"These are not the figures associated with an industry that is profiteering or uncompetitive, and despite this challenging financial climate, RWE still managed to invest over £1bn into new, more efficient energy infrastructure for the UK in each of the last three years," he argued.
But the energy companies are fighting a wave of attacks over the way they have been operating with fines for doorstep mis-selling and criticism over the slow speed with which they respond to a fall ion wholesale prices.
Yesterday, an undercover investigation by the consumer body Which? revealed that the number of energy tariffs available to householders is so vast, and the options so complex, that staff at energy companies have no idea which is the best deal.
Which? called each of the six major energy suppliers 12 times in a week to get advice on the cheapest deal. Despite being asked clearly for the lowest cost option in each case, in nearly a third of the calls the firms failed to offer their cheapest tariff. Staff also gave questionable advice about potential savings, cashback deals and fixed prices.
Britain's energy minister, Chris Huhne, pledged last month "to get tough with the big six energy companies", while Ed Miliband, the Labour party leader, pledged to abolish a "rigged" energy market that has allowed the companies to achieve market dominance.
Ofgem has already threatened energy companies with a formal referral to the Competition Commission if they do not transform their pricing structure to stop confusing customers.
It has promised to come up with detailed proposals for reforming the energy market for business customers before the end of next month, further discussions in December on how to bring new entrants into the market and in the new year will reveal the findings of an independent inquiry into energy company accounts.
Buchanan is aware that a looming £200bn investment drive to green the UK's energy supply would only put further pressure on bills, adding further momentum to the need for reform.
"That is why a radical break with the past is needed. Ofgem's tariff reforms offer the quickest way to create a market where consumers can have confidence that prices are set by effective competition. Suppliers have told Ofgem they want to restore confidence in the industry and now they have the chance to do so."
Electric car infrastructure begins to roll out across the UK
With public and private charging networks shifting out of first gear, it is still early days for electric car take-up in the UK
Electric car infrastrcture is slowly shifting out of first gear in the UK. After the launches of a Boris-backed recharging network in London (216 points) and a so-called national network from Ecotricity (12) this year, Chargemaster on Wednesday opened what it described as the "UK's first privately funded nationwide electric vehicle" network (around 150).
These new additions join the UK's hundreds of existing public points, designed to alleviate the "chicken and egg" problem for electric cars that I've blogged on. "Range anxiety", the fear of running out of charge in an electric car is, while overegged by the likes of Top Gear, nevertheless a real deterrent to people switching from petrol and diesel cars.
Chargemaster's new network, Polar, should go some way to reduce that fear. It says it'll have 4,000 points by the end of next year, built at the rate of around 300 a month with its partners, Waitrose, NCP and others.
What doesn't look so good – and is often used as a selling point for electric cars – is the money side. Membership of Polar works out at £24.50 a month, and you pay 90p per charge. That seems steep in comparison to Boris Johnson's Source London network, which while limited to the capital for now, costs just £8.33 a month and comes with free charging.
Yet David Martell, the company's chief executive, isn't worried about competition between public and private charging networks, as 160 of the Source bays are operated by Chargemaster. "The idea is to build the infrastructure, regardless of who it's owned by," Martell said. It wins either way.
What's not clear is whether the driver wins either way. These are embryonic days for electric car take-up in the UK, a technology seen as crucial to hitting carbon targets for transport. Yet just 465 electric cars were sold under the government's £5,000 grant in the first quarter of 2011, falling to 215 in the second. The figures for the third quarter have been delayed, the Department for Transport told me.
Charging points aren't everything when it comes to supporting electric cars – most research suggests the majority of charging will be done at home – but there's a clear fracturing of competing charging networks going on here that doesn't benefit the consumer at all. Polar users can use Source London points, but not vice versa. A new scheme launching next month in Manchester with 300 points, by the Manchester Electric Car Company, is unlikely to be linked with other schemes at launch, a spokeswoman said. Expect similar for the numerous other local schemes in the pipeline.
Lessons learned from privatising railways on complicated ticketing and incompatible schemes spring to mind. Given the government is part-funding some of these points via its £30m plugged-in places scheme, it has a responsibility to make sure they're all interoperable too. Until it does, it risks electric cars in the UK never getting into second gear.
Electric car infrastrcture is slowly shifting out of first gear in the UK. After the launches of a Boris-backed recharging network in London (216 points) and a so-called national network from Ecotricity (12) this year, Chargemaster on Wednesday opened what it described as the "UK's first privately funded nationwide electric vehicle" network (around 150).
These new additions join the UK's hundreds of existing public points, designed to alleviate the "chicken and egg" problem for electric cars that I've blogged on. "Range anxiety", the fear of running out of charge in an electric car is, while overegged by the likes of Top Gear, nevertheless a real deterrent to people switching from petrol and diesel cars.
Chargemaster's new network, Polar, should go some way to reduce that fear. It says it'll have 4,000 points by the end of next year, built at the rate of around 300 a month with its partners, Waitrose, NCP and others.
What doesn't look so good – and is often used as a selling point for electric cars – is the money side. Membership of Polar works out at £24.50 a month, and you pay 90p per charge. That seems steep in comparison to Boris Johnson's Source London network, which while limited to the capital for now, costs just £8.33 a month and comes with free charging.
Yet David Martell, the company's chief executive, isn't worried about competition between public and private charging networks, as 160 of the Source bays are operated by Chargemaster. "The idea is to build the infrastructure, regardless of who it's owned by," Martell said. It wins either way.
What's not clear is whether the driver wins either way. These are embryonic days for electric car take-up in the UK, a technology seen as crucial to hitting carbon targets for transport. Yet just 465 electric cars were sold under the government's £5,000 grant in the first quarter of 2011, falling to 215 in the second. The figures for the third quarter have been delayed, the Department for Transport told me.
Charging points aren't everything when it comes to supporting electric cars – most research suggests the majority of charging will be done at home – but there's a clear fracturing of competing charging networks going on here that doesn't benefit the consumer at all. Polar users can use Source London points, but not vice versa. A new scheme launching next month in Manchester with 300 points, by the Manchester Electric Car Company, is unlikely to be linked with other schemes at launch, a spokeswoman said. Expect similar for the numerous other local schemes in the pipeline.
Lessons learned from privatising railways on complicated ticketing and incompatible schemes spring to mind. Given the government is part-funding some of these points via its £30m plugged-in places scheme, it has a responsibility to make sure they're all interoperable too. Until it does, it risks electric cars in the UK never getting into second gear.
Wednesday, 12 October 2011
Australia's Carbon Tax Closer After Key Vote
By RAY BRINDAL
CANBERRA—Australia's controversial plan to introduce a tax on carbon emissions cleared a major political hurdle Wednesday, securing the expected approval of the country's lower legislative house.
The package to introduce a price on carbon pollution and encourage investment in clean and renewable energy narrowly passed at 74-72. The law is now assured easy passage through the Australian parliament.
Australian Prime Minister Julia Gillard has staked her Labor Party's future in government on introducing the reform, which wasn't included in its manifesto in last year's election. The policy was almost guaranteed approval after independent lawmakers who back Ms. Gillard agreed to support the bill despite a fierce campaign by the opposition to derail the process.
A group of almost 70 demonstrators against the tax chanting "no mandate, democracy is dead" were expelled from the House of Representatives for disrupting Ms. Julia Gillard's question time after the package passed.
Treasurer Wayne Swan described the passage of the legislation as "the most significant economic and environmental reform in a generation."
The package will allow the government to price emissions of carbon dioxide at a rate of 23 Australian dollars (US$23) a metric ton to the nation's 500 biggest polluters to curb emissions and cut pollution. The measure also aims to encourage investment in clean and renewable energy, provide assistance to some affected industries including steel, and to provide compensation by way of tax cuts and increase government pension payments, Ms. Gillard said.
Business lobby groups in Australia have mostly opposed the tax, arguing that it will add to rising operating costs at a time when the strong Australian dollar weighs on areas of the economy like manufacturing and tourism.
Heather Ridout, chief executive of the Australian Industry Group, said that the timing of the Clean Energy Bill couldn't be worse given weaker economic circumstances, the lack of global and domestic consensus on issues related to climate change and the existing structural pressures on manufacturing.
The Business Council of Australia, which represents big companies, wants amendments to the measure so that Australia acts only in tandem with other nations over time, and adjustment to make Australia competitive in case of economic shocks.
But Frank Jotzo, Director of the Center for Climate Economics and Policy at the Australian National University, said the carbon pricing legislation will give businesses more certainty for their investments.
"The fundamental point is that putting a price on carbon is the economically best way of reining in emissions growth. What was voted in today could well be the first step on the journey to effective and economically sensible climate policy in Australia," Mr. Jotzo said in a statement.
CANBERRA—Australia's controversial plan to introduce a tax on carbon emissions cleared a major political hurdle Wednesday, securing the expected approval of the country's lower legislative house.
The package to introduce a price on carbon pollution and encourage investment in clean and renewable energy narrowly passed at 74-72. The law is now assured easy passage through the Australian parliament.
Australian Prime Minister Julia Gillard has staked her Labor Party's future in government on introducing the reform, which wasn't included in its manifesto in last year's election. The policy was almost guaranteed approval after independent lawmakers who back Ms. Gillard agreed to support the bill despite a fierce campaign by the opposition to derail the process.
A group of almost 70 demonstrators against the tax chanting "no mandate, democracy is dead" were expelled from the House of Representatives for disrupting Ms. Julia Gillard's question time after the package passed.
Treasurer Wayne Swan described the passage of the legislation as "the most significant economic and environmental reform in a generation."
The package will allow the government to price emissions of carbon dioxide at a rate of 23 Australian dollars (US$23) a metric ton to the nation's 500 biggest polluters to curb emissions and cut pollution. The measure also aims to encourage investment in clean and renewable energy, provide assistance to some affected industries including steel, and to provide compensation by way of tax cuts and increase government pension payments, Ms. Gillard said.
Business lobby groups in Australia have mostly opposed the tax, arguing that it will add to rising operating costs at a time when the strong Australian dollar weighs on areas of the economy like manufacturing and tourism.
Heather Ridout, chief executive of the Australian Industry Group, said that the timing of the Clean Energy Bill couldn't be worse given weaker economic circumstances, the lack of global and domestic consensus on issues related to climate change and the existing structural pressures on manufacturing.
The Business Council of Australia, which represents big companies, wants amendments to the measure so that Australia acts only in tandem with other nations over time, and adjustment to make Australia competitive in case of economic shocks.
But Frank Jotzo, Director of the Center for Climate Economics and Policy at the Australian National University, said the carbon pricing legislation will give businesses more certainty for their investments.
"The fundamental point is that putting a price on carbon is the economically best way of reining in emissions growth. What was voted in today could well be the first step on the journey to effective and economically sensible climate policy in Australia," Mr. Jotzo said in a statement.
Are biofuel flights good news for the environment?
Airlines are starting to test biofuels on commercial routes, but 'sustainable' alternatives to kerosene remain controversial
Are biofuel flights really a good thing for the environment? How can we ever produce enough biofuels to power all flights? And won't they just consume precious land that could be used to grow food instead?
T Granger, by email
Last week saw the first commercial flight part-powered by biofuels take off from a UK airport. The TUI Travel Boeing 757 flight from Birmingham to Lanzarote took off and landed without any reported hitches. No technical modifications were made to the plane with one of its two engines powered with a 50/50 blend of conventional Jet A1 fuel and a "Hydroprocessed Esters and Fatty Acids" fuel produced from used cooking oil. TUI Travel said the fuel was supplied by a Dutch firm called SkyNRG and that the fuel was "approved as sustainable by WWF and the Roundtable on Sustainable Biofuels".
Judging by the increasing number of airlines around the world announcing such flights, and the likely imminent inclusion by the EU of aviation within its emissions trading scheme, it would appear that biofuels are likely to play a very significant role in the future of aviation. Aviation - unlike its ground-based transport alternatives - is currently totally reliant on fuels with the energy density offered by a fossil fuel such as kerosene. So a plug-and-play biofuel substitute for kerosene seems to be the only viable alternative at present. After all, we can't electrify our planes or power them by nuclear fission (or not in a way that would be accepted by paying passengers) - and most aircraft operating or purchased today have a predicted lifespan of at least 40 years.
But just how "sustainable" are the biofuels used in aircraft? And will they only act to force up food prices? To rely solely on second-hand cooking oil seems complete folly. But the aviation industry says it is only using this source of biofuel for demonstration purposes. TUI Travel, for example, says it is looking at using biofuels made from the "purge family of plants as well as from camelina". Meanwhile, Virgin has just announced a "breakthrough" in biofuel production with a fuel produced from "reprocessed waste gases from industrial steel production". And other aviation fuel developers say they are exploring algae-based biofuels.
Or, perhaps, all this talk of biofuels is a convenient distraction: with aviation said to be the fastest-growing source of greenhouse gas emissions, should we instead be concentrating on reducing the number of aircraft we send into the sky? Or is aviation so crucial to us all that it deserves a special status of exemption, as it has long enjoyed when it comes to fuel duty and VAT?
This column is an experiment in crowd-sourcing a reader's question, so please let us know your own thoughts below (as opposed to emailing them) and, if quoting figures to support your points, please provide a link to the source. I will also be inviting various interested parties to join the debate, too.
• Please send your own environment question to ask.leo.and.lucy@guardian.co.uk.
Or, alternatively, message me on Twitter @LeoHickman
Are biofuel flights really a good thing for the environment? How can we ever produce enough biofuels to power all flights? And won't they just consume precious land that could be used to grow food instead?
T Granger, by email
Last week saw the first commercial flight part-powered by biofuels take off from a UK airport. The TUI Travel Boeing 757 flight from Birmingham to Lanzarote took off and landed without any reported hitches. No technical modifications were made to the plane with one of its two engines powered with a 50/50 blend of conventional Jet A1 fuel and a "Hydroprocessed Esters and Fatty Acids" fuel produced from used cooking oil. TUI Travel said the fuel was supplied by a Dutch firm called SkyNRG and that the fuel was "approved as sustainable by WWF and the Roundtable on Sustainable Biofuels".
Judging by the increasing number of airlines around the world announcing such flights, and the likely imminent inclusion by the EU of aviation within its emissions trading scheme, it would appear that biofuels are likely to play a very significant role in the future of aviation. Aviation - unlike its ground-based transport alternatives - is currently totally reliant on fuels with the energy density offered by a fossil fuel such as kerosene. So a plug-and-play biofuel substitute for kerosene seems to be the only viable alternative at present. After all, we can't electrify our planes or power them by nuclear fission (or not in a way that would be accepted by paying passengers) - and most aircraft operating or purchased today have a predicted lifespan of at least 40 years.
But just how "sustainable" are the biofuels used in aircraft? And will they only act to force up food prices? To rely solely on second-hand cooking oil seems complete folly. But the aviation industry says it is only using this source of biofuel for demonstration purposes. TUI Travel, for example, says it is looking at using biofuels made from the "purge family of plants as well as from camelina". Meanwhile, Virgin has just announced a "breakthrough" in biofuel production with a fuel produced from "reprocessed waste gases from industrial steel production". And other aviation fuel developers say they are exploring algae-based biofuels.
Or, perhaps, all this talk of biofuels is a convenient distraction: with aviation said to be the fastest-growing source of greenhouse gas emissions, should we instead be concentrating on reducing the number of aircraft we send into the sky? Or is aviation so crucial to us all that it deserves a special status of exemption, as it has long enjoyed when it comes to fuel duty and VAT?
This column is an experiment in crowd-sourcing a reader's question, so please let us know your own thoughts below (as opposed to emailing them) and, if quoting figures to support your points, please provide a link to the source. I will also be inviting various interested parties to join the debate, too.
• Please send your own environment question to ask.leo.and.lucy@guardian.co.uk.
Or, alternatively, message me on Twitter @LeoHickman
Energy market faces shakeup as SSE auctions electricity share
Scottish and Southern Energy breaks ranks with other Big Six suppliers by letting domestic suppliers bid for its energy supply
Graeme Wearden
The Guardian, Wednesday 12 October 2011
Scottish and Southern Energy is shaking up Britain's energy market by auctioning all its electricity on the open market.
SSE announced last night that it will break ranks with its fellow Big Six power suppliers by letting domestic suppliers bid for its entire energy supply. The company will also buy all its own electricity from the same "day-ahead" wholesale market.
"By selling its total supply of electricity and buying its total electricity demand simultaneously in the day-ahead auction, SSE will significantly improve the liquidity, depth and credibility of the market, and assist in the creation of a robust and tangible pricing index," said a company statement.
The move comes two weeks after Labour pledged to break the Big Six's "stranglehold" on the UK energy market, in the face of rising prices. The shadow energy secretary, Meg Hillier, told the party's conference in Liverpool energy production should be fed into a central "pool", allowing any company to buy and supply it. Huw Irranca-Davies, Labour MP for Ogmore, welcomed SSE's decision to "break ranks" with the rest of the industry, predicting it would benefit consumers.
Today, UK suppliers trade just 40GWh of electricity per day – a figure dwarfed by Germany, where upwards of 500GWh changes hands each day.
SSE, which provides nearly 15% of the electricity used in the UK, will start auctioning its power on Friday, and hopes to complete the change by the end of the current financial year.
Alistair Phillips-Davies, SSE's generation and supply director, said Britain's wholesale electricity market could be transformed if other energy companies moved all their energy trading to the day-ahead market, rather than simply selling off any surplus supply. Ian Marchant, chief executive of SSE, predicted that some of his rival suppliers might launch similar plans before the end of 2011.
Energy suppliers have been lambasted this summer for raising prices, often above the headline rate of inflation, at a time when household incomes are being squeezed.
Graeme Wearden
The Guardian, Wednesday 12 October 2011
Scottish and Southern Energy is shaking up Britain's energy market by auctioning all its electricity on the open market.
SSE announced last night that it will break ranks with its fellow Big Six power suppliers by letting domestic suppliers bid for its entire energy supply. The company will also buy all its own electricity from the same "day-ahead" wholesale market.
"By selling its total supply of electricity and buying its total electricity demand simultaneously in the day-ahead auction, SSE will significantly improve the liquidity, depth and credibility of the market, and assist in the creation of a robust and tangible pricing index," said a company statement.
The move comes two weeks after Labour pledged to break the Big Six's "stranglehold" on the UK energy market, in the face of rising prices. The shadow energy secretary, Meg Hillier, told the party's conference in Liverpool energy production should be fed into a central "pool", allowing any company to buy and supply it. Huw Irranca-Davies, Labour MP for Ogmore, welcomed SSE's decision to "break ranks" with the rest of the industry, predicting it would benefit consumers.
Today, UK suppliers trade just 40GWh of electricity per day – a figure dwarfed by Germany, where upwards of 500GWh changes hands each day.
SSE, which provides nearly 15% of the electricity used in the UK, will start auctioning its power on Friday, and hopes to complete the change by the end of the current financial year.
Alistair Phillips-Davies, SSE's generation and supply director, said Britain's wholesale electricity market could be transformed if other energy companies moved all their energy trading to the day-ahead market, rather than simply selling off any surplus supply. Ian Marchant, chief executive of SSE, predicted that some of his rival suppliers might launch similar plans before the end of 2011.
Energy suppliers have been lambasted this summer for raising prices, often above the headline rate of inflation, at a time when household incomes are being squeezed.
$48bn a year would provide electricity to the poor, report says
Giving the poor access to electricity would bring huge gains in health, education and economic growth, with little increase in emmissions, according to International Energy Agency study
Fiona Harvey, environment correspondent
guardian.co.uk, Tuesday 11 October 2011 15.13 BST
More than 1 billion people in poor countries around the world could have access to electricity within 20 years, if the international community is prepared to make the effort, the International Energy Agency (IEA) said on Monday.
Giving poor people access to electricity – more than a century after it became available to the rich – would cost about $48bn a year, and would have huge advantages in terms of health, education and economic growth, a global study for the IEA concluded. Moreover, it would not require a leap in greenhouse gas emissions, as low-carbon energy could make up a large part of the new energy sources to bring the poor into step with the modern world.
If done properly, providing electricity access to those who lack it would increase carbon dioxide emissions by about 0.7%, according to the IEA report, which it said would be "equivalent to the annual emissions of New York State but giving electricity to a population more than 50 times the size".
"Eradicating energy poverty is a moral imperative, and this report shows that it is achievable. Now it is just a question of mustering the political will," said Maria van der Hoeven, executive director of the IEA. "In too many countries today, children cannot do their homework because they have no light. Food cannot be kept because there is no electricity. In short, modern society cannot function. The United Nations has declared 2012 the International Year of Sustainable Energy for All, and this is an excellent opportunity for us to agree on rapid collective action to address this unacceptable problem."
People with access to electricity suffer far less from indoor air pollution, mostly caused by cooking over traditional wood fires. Close to 3 billion people around the world currently have no access to clean cooking facilities, and indoor air pollution is one of the world's biggest "silent killers", causing millions of deaths and many more cases of respiratory illness every year, mostly in women and children, who are more exposed to the pollution.
Education is also improved with electricity access, as children are able to study at home after school, rather than having to rely on kerosene lamps or candles.
Although the $48bn a year is a massive hike from current levels of investment, Van der Hoeven pointed out it would be only about 3% of the worldwide investment needed in the electricity sector, in order to update services and to move to low-carbon electricity provision.
The IEA calculates that of the money needed, $18bn could come from multilateral and bilateral development sources, $15bn from the governments of developing countries and $15bn from the private sector.
Most of the people currently lacking modern energy facilities are in sub-Saharan Africa and Asia, the IEA report found.
The IEA study forms part of its annual "world energy outlook" report, its respected and eagerly awaited update on the world's energy scene, encompassing climate change, energy access and forecasts of pressures on the oil price. This year's report will also include information on shale gas, following the IEA's summer publication of a report dismantling some of the claims from the fossil fuel industry that the world is entering a "golden age of gas".
Fiona Harvey, environment correspondent
guardian.co.uk, Tuesday 11 October 2011 15.13 BST
More than 1 billion people in poor countries around the world could have access to electricity within 20 years, if the international community is prepared to make the effort, the International Energy Agency (IEA) said on Monday.
Giving poor people access to electricity – more than a century after it became available to the rich – would cost about $48bn a year, and would have huge advantages in terms of health, education and economic growth, a global study for the IEA concluded. Moreover, it would not require a leap in greenhouse gas emissions, as low-carbon energy could make up a large part of the new energy sources to bring the poor into step with the modern world.
If done properly, providing electricity access to those who lack it would increase carbon dioxide emissions by about 0.7%, according to the IEA report, which it said would be "equivalent to the annual emissions of New York State but giving electricity to a population more than 50 times the size".
"Eradicating energy poverty is a moral imperative, and this report shows that it is achievable. Now it is just a question of mustering the political will," said Maria van der Hoeven, executive director of the IEA. "In too many countries today, children cannot do their homework because they have no light. Food cannot be kept because there is no electricity. In short, modern society cannot function. The United Nations has declared 2012 the International Year of Sustainable Energy for All, and this is an excellent opportunity for us to agree on rapid collective action to address this unacceptable problem."
People with access to electricity suffer far less from indoor air pollution, mostly caused by cooking over traditional wood fires. Close to 3 billion people around the world currently have no access to clean cooking facilities, and indoor air pollution is one of the world's biggest "silent killers", causing millions of deaths and many more cases of respiratory illness every year, mostly in women and children, who are more exposed to the pollution.
Education is also improved with electricity access, as children are able to study at home after school, rather than having to rely on kerosene lamps or candles.
Although the $48bn a year is a massive hike from current levels of investment, Van der Hoeven pointed out it would be only about 3% of the worldwide investment needed in the electricity sector, in order to update services and to move to low-carbon electricity provision.
The IEA calculates that of the money needed, $18bn could come from multilateral and bilateral development sources, $15bn from the governments of developing countries and $15bn from the private sector.
Most of the people currently lacking modern energy facilities are in sub-Saharan Africa and Asia, the IEA report found.
The IEA study forms part of its annual "world energy outlook" report, its respected and eagerly awaited update on the world's energy scene, encompassing climate change, energy access and forecasts of pressures on the oil price. This year's report will also include information on shale gas, following the IEA's summer publication of a report dismantling some of the claims from the fossil fuel industry that the world is entering a "golden age of gas".
Tuesday, 11 October 2011
Global warning: climate sceptics are winning the battle
Father of the green movement says scientists lack PR skills to make public listen
By Michael McCarthy, Environment Editor
Tuesday, 11 October 2011
Climate sceptics are winning the argument with the public over global warming, the world's most celebrated climate scientist, James Hansen of NASA, said in London yesterday.
It is happening even though climate science itself is becoming ever clearer in showing that the earth is in increasing danger from rising temperatures, said Dr Hansen, who heads NASA's Goddard Institute of Space Studies, and is widely thought of as "the father of global warming" – his dramatic alert about climate change in US Senate hearings in July 1988 put the issue on the world agenda.
Since then he has been one of the most outspoken advocates of drastic climate action, and yesterday he also publicly criticised Germany's recent decision to abandon its new nuclear power programme, formerly a key part of German climate measures, in the wake of the Fukushima nuclear disaster in Japan earlier this year.
"I think it was a big mistake," he said. "And I think the Prime Minister [German Chancellor Angela Merkel] knows that, as she's a physicist, but I think the political reality is she couldn't stay in office if she expressed that opinion."
In a briefing at the Royal Society , Dr Hansen, pictured, was frank about the success with public opinion of what he termed "the climate contrarians", in effectively lessening public concern about global warming. He said: "They have been winning the argument for several years, even though the science has become clearer.
"There's been a very strong campaign by those who want to continue fossil fuel 'business as usual', and the scientific story has not been powerful enough to offset that push."
Part of the problem, he said, was that the climate sceptic lobby employed communications professionals, whereas "scientists are just barely competent at communicating with the public and don't have the wherewithal to do it."
The result was, he said, that in recent years "a gap has opened between what is understood about global warming by the relevant scientific community, and what's known by the people who need to know – and that's the public. However there's nothing that has happened to reduce our scientific conclusion that we are pushing the system into very dangerous territory, in fact that conclusion has become stronger over that same time period."
Asked if anything might re-alert the public to the dangers of climate change, Dr Hansen said: "Mother Nature."
Significant climatic "extreme events" were now occurring over 10 to 15 per cent of the planet annually, whereas between 1950 to 1980 they occurred over less than 1 per cent. He added: "So in places like Texas this year, Moscow last year, and Europe in 2003, the climate change is so big that they are undeniable. Within 10 to 15 years they're going to occur over 15 to 20 per cent of the planet, so people have to notice that the climate is changing."
Burning issue: Hansen's evidence that the world is hotting up
Texas, summer 2011
The US state this year has had its driest summer since record-keeping began in 1895, with 75 per cent of the state classified as "exceptional drought", the worst level. Shortages of grass, hay and water have forced ranchers to thin their herds – where this cow died, in the San Angelo area, there has been less than three inches of rain.
Moscow, August 2010
Russia experienced its hottest-ever summer last year – for weeks, a large portion of European Russia was more than 7 °C (12.6 °F) warmer than normal, and a new national record was set of 44 °C (111 °F). Raging forest fires filled Moscow with smoke, forcing the cancellation of air services and obliging people to don face masks.
Northern Europe, 2003
Shrivelled French grapes at the end of Europe's hottest summer on record, in 2003. The heatwave led to health crises in several countries and more than 40,000 people are thought to have died. Britain experienced its first (and so far only) 100+ F air temperature – 101.3°F (38.5°C) recorded at Brogdale, Kent, on 10 August.
By Michael McCarthy, Environment Editor
Tuesday, 11 October 2011
Climate sceptics are winning the argument with the public over global warming, the world's most celebrated climate scientist, James Hansen of NASA, said in London yesterday.
It is happening even though climate science itself is becoming ever clearer in showing that the earth is in increasing danger from rising temperatures, said Dr Hansen, who heads NASA's Goddard Institute of Space Studies, and is widely thought of as "the father of global warming" – his dramatic alert about climate change in US Senate hearings in July 1988 put the issue on the world agenda.
Since then he has been one of the most outspoken advocates of drastic climate action, and yesterday he also publicly criticised Germany's recent decision to abandon its new nuclear power programme, formerly a key part of German climate measures, in the wake of the Fukushima nuclear disaster in Japan earlier this year.
"I think it was a big mistake," he said. "And I think the Prime Minister [German Chancellor Angela Merkel] knows that, as she's a physicist, but I think the political reality is she couldn't stay in office if she expressed that opinion."
In a briefing at the Royal Society , Dr Hansen, pictured, was frank about the success with public opinion of what he termed "the climate contrarians", in effectively lessening public concern about global warming. He said: "They have been winning the argument for several years, even though the science has become clearer.
"There's been a very strong campaign by those who want to continue fossil fuel 'business as usual', and the scientific story has not been powerful enough to offset that push."
Part of the problem, he said, was that the climate sceptic lobby employed communications professionals, whereas "scientists are just barely competent at communicating with the public and don't have the wherewithal to do it."
The result was, he said, that in recent years "a gap has opened between what is understood about global warming by the relevant scientific community, and what's known by the people who need to know – and that's the public. However there's nothing that has happened to reduce our scientific conclusion that we are pushing the system into very dangerous territory, in fact that conclusion has become stronger over that same time period."
Asked if anything might re-alert the public to the dangers of climate change, Dr Hansen said: "Mother Nature."
Significant climatic "extreme events" were now occurring over 10 to 15 per cent of the planet annually, whereas between 1950 to 1980 they occurred over less than 1 per cent. He added: "So in places like Texas this year, Moscow last year, and Europe in 2003, the climate change is so big that they are undeniable. Within 10 to 15 years they're going to occur over 15 to 20 per cent of the planet, so people have to notice that the climate is changing."
Burning issue: Hansen's evidence that the world is hotting up
Texas, summer 2011
The US state this year has had its driest summer since record-keeping began in 1895, with 75 per cent of the state classified as "exceptional drought", the worst level. Shortages of grass, hay and water have forced ranchers to thin their herds – where this cow died, in the San Angelo area, there has been less than three inches of rain.
Moscow, August 2010
Russia experienced its hottest-ever summer last year – for weeks, a large portion of European Russia was more than 7 °C (12.6 °F) warmer than normal, and a new national record was set of 44 °C (111 °F). Raging forest fires filled Moscow with smoke, forcing the cancellation of air services and obliging people to don face masks.
Northern Europe, 2003
Shrivelled French grapes at the end of Europe's hottest summer on record, in 2003. The heatwave led to health crises in several countries and more than 40,000 people are thought to have died. Britain experienced its first (and so far only) 100+ F air temperature – 101.3°F (38.5°C) recorded at Brogdale, Kent, on 10 August.
George Osborne and the Treasury attacked for hostility to green policies
Parliament's green watchdog says the department 'doesn't get' climate change and warns against backtracking on commitments
Damian Carrington
The Guardian, Tuesday 11 October 2011
George Osborne's Treasury has come under fierce attack for its hostility to green policies, with parliament's green watchdog saying the department "still doesn't get climate change" and that "backtracking on the government's green promises now would be a big mistake" for both the climate and the economy.
The report by the House of Common's Environment Audit Committee (EAC) on the UK's targets for cuts in carbon emissions concludes that there is a fundamental "inconsistency" in David Cameron's government simultaneously committing to long-term reductions and to a "politically motivated" review of those reductions in 2014. It also finds fears that lobbying by highly polluting industries is "dictating policy" are fuelled by a "lack of transparency".
"The Treasury still doesn't get climate change, or the risk it poses to global stability and economic prosperity," said Labour's Joan Walley, chair of the EAC. "Green investment should be seen as a 'win-win' solution to our economic problems; helping to stimulate growth and rebalance the economy, at the same time as reducing pollution."
Zac Goldsmith, a Conservative member of the committee, said that uncertainty over the government's commitment was harming the UK's transition to a low carbon economy. Changes in policy were "the one risk all investors highlight when they consider putting funds into clean technology", he said.
Ofgem calculates that £200bn of investment is needed over the next decade in the UK's creaking and dirty energy infrastructure.
"The Treasury has made important progress on a range of green initiatives," a departmental spokesman said. "We are introducing a carbon price floor – a world first – as the basis of an innovative and economically ambitious green policy."
Osborne stunned green businesses and campaigners on 3 October when, for the first time, he publicly attacked environmental measures as harming some businesses and appeared to reverse previous government ambitions to be a world leader in low carbon technologies, such as wind power and carbon capture and storage.
"We're not going to save the planet by putting our country out of business," he told the Conservative party conference.
His statement followed months of behind-the-scenes rows between the Treasury and other government departments over green policies, which continued on Sunday with reports that Osborne is the cause of continuing delays to an urgent review of subsidies for renewable energy.
Conservative sources say soaring energy bills and the unpopularity of green policies with Tory voters were behind Osborne's reversal of green ambition, as well as fears of the affordability of some policies in a world gripped by economic crisis.
Critics respond that renewable energy, energy efficiency and other sustainable sectors represent the best sectors for economic growth and employment in the UK, not energy intensive industries like steel and cement.
"Osborne is a 20th century chancellor in a 21st century world who has totally failed to grasp the financial necessity of building a low-carbon future," said Andy Atkins, director of Friends of the Earth. "I hope the prime minister has a better grasp of modern economics than his chancellor." Cameron pledged to lead the "greenest government ever" within days of taking office.
The EAC report focuses on the carbon budget approved by the government in May, which commits the UK to cutting its emissions by 50% by 2025. Cameron had to overrule Osborne's objections to get the budget passed, but Osborne exacted two concessions. First, there would be a review of the budget in 2014 to ensure it was not harming UK competitiveness; and second, exemptions, rebates or grants would be given to heavy energy users to offset the impact of new emissions restrictions.
The EAC report found: "There is, more fundamentally, an inconsistency in the government's position of trumpeting its acceptance of a recommended carbon budget for 20 or so years hence, while at the same time envisaging the possibility of overturning that commitment just three years from now."
The Treasury spokesman called the 2014 review pragmatic. Energy and climate change minister Greg Barker said: "By legislating for clear targets up to 2027 we are doing more than any other country in providing long-term certainty to those investing in the low carbon economy. At the same time, it's right that we review progress towards the EU emissions goal in 2014 so that we're not disadvantaging British industry, which would simply result in emissions being shipped overseas."
The 2025 carbon budget was proposed by the Committee on Climate Change (CCC), the official advisers to the government. The CCC will also carry out the 2014 review but its chief executive, David Kennedy, said he did not expect the "significant change in circumstances" needed to weaken the legally binding budgets by that time. "The climate change act is a very powerful piece of legislation," he said. "It is there to mitigate against these short-term political and economic difficulties."
The EAC also criticised the government over the help it has signalled it will give to heavily polluting industries, some of which have received windfalls of billions of euros from unused carbon pollution permits.
"Government has given little priority to generating hard evidence of 'carbon leakage' [where jobs are lost to nations with weaker emissions controls]. A lack of transparency and information on the risks to energy intensive industries ... needs to be resolved to allay fears of lobbying dictating policy."
Political insiders saw Osborne's conference speech as "a little gift" to energy intensive industries.
Neil Bentley, the CBI deputy director general, said: "A review of the carbon budget is sensible and will ensure the UK doesn't get out of step with European competitors, but what's really important is that the government delivers a clear framework for companies to invest with confidence."
Before Osborne's speech, environment, energy and climate change ministers had talked of the dangers of being a "follower" not a "leader" in the global low carbon economy. On the eve of the chancellor's speech, environment secretary Caroline Spelman told the Conservative party conference: "I passionately believe going green is an economic and moral imperative."
The Treasury has pledged £1bn of public funds to build the country's first commercial-scale demonstration of carbon capture and storage, but the only bidder for the contract is on the verge of pulling out. It has also implemented a minimum price for carbon emissions, which will discourage carbon-heavy energy generation but give a windfall to existing nuclear power operators.
Two power companies considering building new nuclear power stations in the UK have, however, either pulled out or are reviewing their plans.
Damian Carrington
The Guardian, Tuesday 11 October 2011
George Osborne's Treasury has come under fierce attack for its hostility to green policies, with parliament's green watchdog saying the department "still doesn't get climate change" and that "backtracking on the government's green promises now would be a big mistake" for both the climate and the economy.
The report by the House of Common's Environment Audit Committee (EAC) on the UK's targets for cuts in carbon emissions concludes that there is a fundamental "inconsistency" in David Cameron's government simultaneously committing to long-term reductions and to a "politically motivated" review of those reductions in 2014. It also finds fears that lobbying by highly polluting industries is "dictating policy" are fuelled by a "lack of transparency".
"The Treasury still doesn't get climate change, or the risk it poses to global stability and economic prosperity," said Labour's Joan Walley, chair of the EAC. "Green investment should be seen as a 'win-win' solution to our economic problems; helping to stimulate growth and rebalance the economy, at the same time as reducing pollution."
Zac Goldsmith, a Conservative member of the committee, said that uncertainty over the government's commitment was harming the UK's transition to a low carbon economy. Changes in policy were "the one risk all investors highlight when they consider putting funds into clean technology", he said.
Ofgem calculates that £200bn of investment is needed over the next decade in the UK's creaking and dirty energy infrastructure.
"The Treasury has made important progress on a range of green initiatives," a departmental spokesman said. "We are introducing a carbon price floor – a world first – as the basis of an innovative and economically ambitious green policy."
Osborne stunned green businesses and campaigners on 3 October when, for the first time, he publicly attacked environmental measures as harming some businesses and appeared to reverse previous government ambitions to be a world leader in low carbon technologies, such as wind power and carbon capture and storage.
"We're not going to save the planet by putting our country out of business," he told the Conservative party conference.
His statement followed months of behind-the-scenes rows between the Treasury and other government departments over green policies, which continued on Sunday with reports that Osborne is the cause of continuing delays to an urgent review of subsidies for renewable energy.
Conservative sources say soaring energy bills and the unpopularity of green policies with Tory voters were behind Osborne's reversal of green ambition, as well as fears of the affordability of some policies in a world gripped by economic crisis.
Critics respond that renewable energy, energy efficiency and other sustainable sectors represent the best sectors for economic growth and employment in the UK, not energy intensive industries like steel and cement.
"Osborne is a 20th century chancellor in a 21st century world who has totally failed to grasp the financial necessity of building a low-carbon future," said Andy Atkins, director of Friends of the Earth. "I hope the prime minister has a better grasp of modern economics than his chancellor." Cameron pledged to lead the "greenest government ever" within days of taking office.
The EAC report focuses on the carbon budget approved by the government in May, which commits the UK to cutting its emissions by 50% by 2025. Cameron had to overrule Osborne's objections to get the budget passed, but Osborne exacted two concessions. First, there would be a review of the budget in 2014 to ensure it was not harming UK competitiveness; and second, exemptions, rebates or grants would be given to heavy energy users to offset the impact of new emissions restrictions.
The EAC report found: "There is, more fundamentally, an inconsistency in the government's position of trumpeting its acceptance of a recommended carbon budget for 20 or so years hence, while at the same time envisaging the possibility of overturning that commitment just three years from now."
The Treasury spokesman called the 2014 review pragmatic. Energy and climate change minister Greg Barker said: "By legislating for clear targets up to 2027 we are doing more than any other country in providing long-term certainty to those investing in the low carbon economy. At the same time, it's right that we review progress towards the EU emissions goal in 2014 so that we're not disadvantaging British industry, which would simply result in emissions being shipped overseas."
The 2025 carbon budget was proposed by the Committee on Climate Change (CCC), the official advisers to the government. The CCC will also carry out the 2014 review but its chief executive, David Kennedy, said he did not expect the "significant change in circumstances" needed to weaken the legally binding budgets by that time. "The climate change act is a very powerful piece of legislation," he said. "It is there to mitigate against these short-term political and economic difficulties."
The EAC also criticised the government over the help it has signalled it will give to heavily polluting industries, some of which have received windfalls of billions of euros from unused carbon pollution permits.
"Government has given little priority to generating hard evidence of 'carbon leakage' [where jobs are lost to nations with weaker emissions controls]. A lack of transparency and information on the risks to energy intensive industries ... needs to be resolved to allay fears of lobbying dictating policy."
Political insiders saw Osborne's conference speech as "a little gift" to energy intensive industries.
Neil Bentley, the CBI deputy director general, said: "A review of the carbon budget is sensible and will ensure the UK doesn't get out of step with European competitors, but what's really important is that the government delivers a clear framework for companies to invest with confidence."
Before Osborne's speech, environment, energy and climate change ministers had talked of the dangers of being a "follower" not a "leader" in the global low carbon economy. On the eve of the chancellor's speech, environment secretary Caroline Spelman told the Conservative party conference: "I passionately believe going green is an economic and moral imperative."
The Treasury has pledged £1bn of public funds to build the country's first commercial-scale demonstration of carbon capture and storage, but the only bidder for the contract is on the verge of pulling out. It has also implemented a minimum price for carbon emissions, which will discourage carbon-heavy energy generation but give a windfall to existing nuclear power operators.
Two power companies considering building new nuclear power stations in the UK have, however, either pulled out or are reviewing their plans.
Monday, 10 October 2011
Flagship green energy project faces axe
Carbon plan to be shelved over funding shortage as fears grow for Tories' green agenda after chancellor's 'austerity' remark
Terry Macalister and Damian Carrington
guardian.co.uk, Thursday 6 October 2011 20.20 BST
Scottish Power is understood to have pulled the plug on a major green energy scheme at Longannet power station, Fife, close to the Firth of Forth.
The threatened scrapping comes amid growing concern that David Cameron and George Osborne want to scale back the green agenda on the grounds that low carbon technology, such as carbon capture storage (CCS) and offshore wind power, cost too much in a time of austerity.
The chancellor told the Conservative conference this week that if he had his way the UK would cut "carbon emissions no slower but also no faster than our fellow countries in Europe".
Scottish Power and its partners Shell and the National Grid have just completed a detailed study of the Longannet scheme. They are concerned about its commercial viability without more public backing.The Department of Energy and Climate Change (DECC) had promised £1bn but the developers are understood to be saying they cannot proceed unless more money is provided to enable them to trial a scheme which involves burying carbon emissions in the North Sea.
Both sides insist "talks are ongoing" but well-placed industry and political sources say the process is "pretty much over" and a statement is expected shortly.
Jeff Chapman, chief executive of the Carbon Capture and Storage Association, said the collapse of Longannet would be a "severe disappointment" for the wider hopes of the sector.
A senior Conservative backbencher with knowledge of the energy sector told the Guardian he expected the CCS deal to collapse within weeks. He said blame lay with the Labour government, which had dithered in awarding the CCS demonstration contract until only one bidder was left, leaving the government in an impossible negotiating position.
A DECC spokesman said Longannet was only one CCS project and the government still planned to choose another three that could be eligible for cash from an EU fund by the end of the year.
In May DECC submitted seven UK-based CCS projects for European funding, including Longannet, but the Fife scheme was by far the most advanced and is spearheading the drive to develop the new technology in Britain. Ministers have repeatedly stressed the importance of CCS as a way to keep coal and possibly other fossil-fuel burning power stations in operation without undermining moves to cut carbon emissions and counter global warming.But they have already seen E.ON back out of plans to construct a new coal-fired power station with prototype CCS technology at Kingsnorth in Kent.
At 2,400MW, Longannet is the third largest coal-fired power station in Europe and was once highlighted as Scotland's biggest single polluter. In 2009 at the launch of a small-scale pilot study Ignacio Galán, the chairman of Scottish Power and its Spanish parent group Iberdrola, highlighted the importance of the scheme.
"We believe that the UK can lead the world with CCS technology, creating new skills, jobs and opportunities for growth," he said. "There is the potential to create an industry on the same scale as North Sea oil, and we will invest in Scotland and the UK to help realise this potential."
Charles Hendry, the energy minister, said in May that Longannet and other CCS schemes in the UK showed it was "at the cutting edge of the low carbon agenda."
But an industrialist in the department told the Guardian ministers were now privately questioning renewable power and other schemes that involved substantial public subsidies. Ministers have come under sustained lobbying from traditional power companies and energy intensive manufacturers to concentrate on lower priced, higher carbon fuels such as gas.
WWF Scotland's Director, Dr Richard Dixon, said: "This news is deeply worrying. If the UK truly wants to lead the development of this technology, as many politicians have said, then we hope that all those involved can find a way to make this project happen. It would be a major blow to international efforts to develop carbon capture and storage if this scheme were not to happen at Longannet.
Terry Macalister and Damian Carrington
guardian.co.uk, Thursday 6 October 2011 20.20 BST
Scottish Power is understood to have pulled the plug on a major green energy scheme at Longannet power station, Fife, close to the Firth of Forth.
The threatened scrapping comes amid growing concern that David Cameron and George Osborne want to scale back the green agenda on the grounds that low carbon technology, such as carbon capture storage (CCS) and offshore wind power, cost too much in a time of austerity.
The chancellor told the Conservative conference this week that if he had his way the UK would cut "carbon emissions no slower but also no faster than our fellow countries in Europe".
Scottish Power and its partners Shell and the National Grid have just completed a detailed study of the Longannet scheme. They are concerned about its commercial viability without more public backing.The Department of Energy and Climate Change (DECC) had promised £1bn but the developers are understood to be saying they cannot proceed unless more money is provided to enable them to trial a scheme which involves burying carbon emissions in the North Sea.
Both sides insist "talks are ongoing" but well-placed industry and political sources say the process is "pretty much over" and a statement is expected shortly.
Jeff Chapman, chief executive of the Carbon Capture and Storage Association, said the collapse of Longannet would be a "severe disappointment" for the wider hopes of the sector.
A senior Conservative backbencher with knowledge of the energy sector told the Guardian he expected the CCS deal to collapse within weeks. He said blame lay with the Labour government, which had dithered in awarding the CCS demonstration contract until only one bidder was left, leaving the government in an impossible negotiating position.
A DECC spokesman said Longannet was only one CCS project and the government still planned to choose another three that could be eligible for cash from an EU fund by the end of the year.
In May DECC submitted seven UK-based CCS projects for European funding, including Longannet, but the Fife scheme was by far the most advanced and is spearheading the drive to develop the new technology in Britain. Ministers have repeatedly stressed the importance of CCS as a way to keep coal and possibly other fossil-fuel burning power stations in operation without undermining moves to cut carbon emissions and counter global warming.But they have already seen E.ON back out of plans to construct a new coal-fired power station with prototype CCS technology at Kingsnorth in Kent.
At 2,400MW, Longannet is the third largest coal-fired power station in Europe and was once highlighted as Scotland's biggest single polluter. In 2009 at the launch of a small-scale pilot study Ignacio Galán, the chairman of Scottish Power and its Spanish parent group Iberdrola, highlighted the importance of the scheme.
"We believe that the UK can lead the world with CCS technology, creating new skills, jobs and opportunities for growth," he said. "There is the potential to create an industry on the same scale as North Sea oil, and we will invest in Scotland and the UK to help realise this potential."
Charles Hendry, the energy minister, said in May that Longannet and other CCS schemes in the UK showed it was "at the cutting edge of the low carbon agenda."
But an industrialist in the department told the Guardian ministers were now privately questioning renewable power and other schemes that involved substantial public subsidies. Ministers have come under sustained lobbying from traditional power companies and energy intensive manufacturers to concentrate on lower priced, higher carbon fuels such as gas.
WWF Scotland's Director, Dr Richard Dixon, said: "This news is deeply worrying. If the UK truly wants to lead the development of this technology, as many politicians have said, then we hope that all those involved can find a way to make this project happen. It would be a major blow to international efforts to develop carbon capture and storage if this scheme were not to happen at Longannet.
Big names behind US push for geoengineering
A coalition representing the most powerful academic, military, scientific and corporate interests has set its sights on vast potential profits
UK scientists last week "postponed" one of the world's first attempts to physically manipulate the upper atmosphere to cool the planet. Okay, so the Stratospheric Particle Injection for Climate Engineering project wasn't actually going to spray thousands of tonnes of reflective particles into the air to replicate a volcano, but the plan to send a balloon with a hose attached 1km into the sky above Norfolk was an important step towards the ultimate techno-fix for climate change.
The reason the British scientists gave for pulling back was that more time was needed for consultation. In retrospect, it seems bizarre that they had only talked to a few members of the public. It was only when 60 global groups wrote to the UK government and the resarch groups behind the project requesting cancellation that they paid any attention to critics.
Over the Atlantic, though, the geoengineers are more gung-ho. Just days after the British got cold feet, the Washington-based thinktank the Bipartisan Policy Center (BPC) published a major report calling for the United States and other likeminded countries to move towards large-scale climate change experimentation. Trying to rebrand geoengineering as "climate remediation", the BPC report is full of precautionary rhetoric, but its bottom line is that there should be presidential leadership for the nascent technologies, a "coalition of willing" countries to experiment together, large-scale testing and big government funding.
So what is the BPC and should we take this non-profit group seriously? For a start these guys - and they are indeed mostly men - are not bipartisan in any sense that the British would understand. The operation is part-funded by big oil, pharmaceutical and biotechnology companies, and while it claims to "represent a consensus among what have historically been divergent views," it appears to actually represent the most powerful US academic, military, scientific and corporate interests. It lobbies for free trade, US military supremacy and corporate power and was described recently as a "collection of neo-conservatives, hawks, and neoliberal interventionists who want to make war on Iran".
Their specially convened taskforce is, in fact, the cream of the emerging science and military-led geoengineering lobby with a few neutrals chucked in to give it an air of political sobriety. It includes former ambassadors, an assistant secretary of state, academics, and a chief US climate negotiator.
Notable among the group is David Whelan, a man who spent years in the US defence department working on the stealth bomber and nuclear weapons and who now leads a group of people as Boeing's chief scientist working on "ways to find new solutions to world's most challenging problems".
There are signs of cross US-UK pollination – one member of the taskforce is John Shepherd, who recently wrote for the Guardian: "I've concluded that geoengineering research – and I emphasise the term research – is, sadly, necessary." But he cautioned: "what we really need is more and better information. The only way to get that information is through appropriate research."
It also includes several of geoengineering's most powerful academic cheerleaders. Atmosphere scientist Ken Caldeira, from Stanford University, used to work at the National laboratory at Livermore with the people who developed the ill-fated "star wars" weapons. Together with David Keith, a researcher at the University of Calgary in Canada, who is also on the BPC panel, Caldeira manages billionaire Bill Gates's geoengineering research budget. Both scientists have patents pending on geoengineering processes and both were members of of the UK Royal Society's working group on geoengineering which in 2009 recommended more research. Meanwhile, Keith has a company developing a machine to suck CO2 out of the year and Caldeira has patented ideas to stop hurricanes forming.
In sum, this coalition of US expertise is a group of people which smell vast potential future profits for their institutions and companies in geo-engineering.
Watch out. This could be the start of the next climate wars.
UK scientists last week "postponed" one of the world's first attempts to physically manipulate the upper atmosphere to cool the planet. Okay, so the Stratospheric Particle Injection for Climate Engineering project wasn't actually going to spray thousands of tonnes of reflective particles into the air to replicate a volcano, but the plan to send a balloon with a hose attached 1km into the sky above Norfolk was an important step towards the ultimate techno-fix for climate change.
The reason the British scientists gave for pulling back was that more time was needed for consultation. In retrospect, it seems bizarre that they had only talked to a few members of the public. It was only when 60 global groups wrote to the UK government and the resarch groups behind the project requesting cancellation that they paid any attention to critics.
Over the Atlantic, though, the geoengineers are more gung-ho. Just days after the British got cold feet, the Washington-based thinktank the Bipartisan Policy Center (BPC) published a major report calling for the United States and other likeminded countries to move towards large-scale climate change experimentation. Trying to rebrand geoengineering as "climate remediation", the BPC report is full of precautionary rhetoric, but its bottom line is that there should be presidential leadership for the nascent technologies, a "coalition of willing" countries to experiment together, large-scale testing and big government funding.
So what is the BPC and should we take this non-profit group seriously? For a start these guys - and they are indeed mostly men - are not bipartisan in any sense that the British would understand. The operation is part-funded by big oil, pharmaceutical and biotechnology companies, and while it claims to "represent a consensus among what have historically been divergent views," it appears to actually represent the most powerful US academic, military, scientific and corporate interests. It lobbies for free trade, US military supremacy and corporate power and was described recently as a "collection of neo-conservatives, hawks, and neoliberal interventionists who want to make war on Iran".
Their specially convened taskforce is, in fact, the cream of the emerging science and military-led geoengineering lobby with a few neutrals chucked in to give it an air of political sobriety. It includes former ambassadors, an assistant secretary of state, academics, and a chief US climate negotiator.
Notable among the group is David Whelan, a man who spent years in the US defence department working on the stealth bomber and nuclear weapons and who now leads a group of people as Boeing's chief scientist working on "ways to find new solutions to world's most challenging problems".
There are signs of cross US-UK pollination – one member of the taskforce is John Shepherd, who recently wrote for the Guardian: "I've concluded that geoengineering research – and I emphasise the term research – is, sadly, necessary." But he cautioned: "what we really need is more and better information. The only way to get that information is through appropriate research."
It also includes several of geoengineering's most powerful academic cheerleaders. Atmosphere scientist Ken Caldeira, from Stanford University, used to work at the National laboratory at Livermore with the people who developed the ill-fated "star wars" weapons. Together with David Keith, a researcher at the University of Calgary in Canada, who is also on the BPC panel, Caldeira manages billionaire Bill Gates's geoengineering research budget. Both scientists have patents pending on geoengineering processes and both were members of of the UK Royal Society's working group on geoengineering which in 2009 recommended more research. Meanwhile, Keith has a company developing a machine to suck CO2 out of the year and Caldeira has patented ideas to stop hurricanes forming.
In sum, this coalition of US expertise is a group of people which smell vast potential future profits for their institutions and companies in geo-engineering.
Watch out. This could be the start of the next climate wars.
China eyes shale gas and uranium firms
CNOOC linked to backer of Blackpool shale gas firm Cuadrilla, while bid expected for uranium producer Kalahari Minerals
Terry Macalister
guardian.co.uk, Sunday 9 October 2011 17.21 BST
China's growing attempts to seize global natural resources has reached Britain with a link to the recent shale discoveries near Blackpool and a bid for a London-listed uranium company.
Close ties have emerged between China National Offshore Oil Corporation (CNOOC) and a backer of Cuadrilla Resources, the exploration group that claimed last month there were trillions of cubic metres of shale gas under Lancashire.
The Beijing-to-Blackpool link was revealed after the Hong Kong-based Kerogen Capital came to the rescue of one of the largest shareholders in Cuadrilla. Kerogen and CNOOC are behind a new $1.5bn (£1bn) fund, which is looking at investing in new resource projects. Kerogen, set up by former JP Morgan bankers Ivor Orchard and Jason Cheng, has taken a 15% stake in AJ Lucas – an Australian engineering business that holds about 40% of Cuadrilla.
Lucas has been struggling to raise new cash and needed to inject $10m in Cuadrilla to maintain its stake in a business that is also 40% owned by Riverstone – a private equity firm in which former BP boss, Lord Browne, is a key player.
Chinese companies have already bought into shale gas companies in the US, where a welter of discoveries has sent the price of natural gas plummeting. Cuadrilla made headlines when it claimed that two exploratory wells in the Bowland shale of Lancashire indicated huge reserves of 5.6tn cubic metres of shale gas.
Some academics have questioned the very high estimates, but Cuadrilla told the Guardian that it stands by those numbers, and made clear that Lord Browne, one of the most respected figures in the oil world, had endorsed them too in his capacity as a Cuadrilla board member.
Objections to shale operations focus on potential water contamination, due to the chemicals pumped into the ground with water to hydraulically fracture, or "frack", the rock and release the hydrocarbons. Green groups also fear that cheap gas will undermine government carbon-reduction targets and inhibit the nascent renewable energy industry. The process has been banned in France and some US states but another company is also applying for drilling licences in Britain, this time in the Mendip Hills outside Bath.
Meanwhile, the state-backed China Guangdong Nuclear Power Group (CGNPG) is expected to launch a £650m takeover of a London-listed uranium miner, Kalahari Minerals, as early as this week.
Shares in Kalahari, which is listed on the Alternative Investment Market, rose 7% on Friday amid speculation about interests in the far east. Kalahari is of interest to nuclear operators because it owns a big stake in the Husab uranium mine in Namibia, one of the world's largest.
Despite the Fukushima nuclear disaster in Japan, China is still expected to proceed with its reactor construction programme – it already has 25 plants under construction, half of the world's new capacity.
CGNPG offered 290p a share for Kalahari Minerals in March, valuing the mining group at £756m, but the deal fell apart after the Chinese company tried to cut the price after Fukushima.
The tsunami led Japan, Germany and Austria to halt their new nuclear programmes or phase out reactors early, reducing uranium's value as a fuel.
China's Minmetals launched a $1.2bn offer last month for Anvil Mining, a copper producer with assets in the Democratic Republic of Congo.
Terry Macalister
guardian.co.uk, Sunday 9 October 2011 17.21 BST
China's growing attempts to seize global natural resources has reached Britain with a link to the recent shale discoveries near Blackpool and a bid for a London-listed uranium company.
Close ties have emerged between China National Offshore Oil Corporation (CNOOC) and a backer of Cuadrilla Resources, the exploration group that claimed last month there were trillions of cubic metres of shale gas under Lancashire.
The Beijing-to-Blackpool link was revealed after the Hong Kong-based Kerogen Capital came to the rescue of one of the largest shareholders in Cuadrilla. Kerogen and CNOOC are behind a new $1.5bn (£1bn) fund, which is looking at investing in new resource projects. Kerogen, set up by former JP Morgan bankers Ivor Orchard and Jason Cheng, has taken a 15% stake in AJ Lucas – an Australian engineering business that holds about 40% of Cuadrilla.
Lucas has been struggling to raise new cash and needed to inject $10m in Cuadrilla to maintain its stake in a business that is also 40% owned by Riverstone – a private equity firm in which former BP boss, Lord Browne, is a key player.
Chinese companies have already bought into shale gas companies in the US, where a welter of discoveries has sent the price of natural gas plummeting. Cuadrilla made headlines when it claimed that two exploratory wells in the Bowland shale of Lancashire indicated huge reserves of 5.6tn cubic metres of shale gas.
Some academics have questioned the very high estimates, but Cuadrilla told the Guardian that it stands by those numbers, and made clear that Lord Browne, one of the most respected figures in the oil world, had endorsed them too in his capacity as a Cuadrilla board member.
Objections to shale operations focus on potential water contamination, due to the chemicals pumped into the ground with water to hydraulically fracture, or "frack", the rock and release the hydrocarbons. Green groups also fear that cheap gas will undermine government carbon-reduction targets and inhibit the nascent renewable energy industry. The process has been banned in France and some US states but another company is also applying for drilling licences in Britain, this time in the Mendip Hills outside Bath.
Meanwhile, the state-backed China Guangdong Nuclear Power Group (CGNPG) is expected to launch a £650m takeover of a London-listed uranium miner, Kalahari Minerals, as early as this week.
Shares in Kalahari, which is listed on the Alternative Investment Market, rose 7% on Friday amid speculation about interests in the far east. Kalahari is of interest to nuclear operators because it owns a big stake in the Husab uranium mine in Namibia, one of the world's largest.
Despite the Fukushima nuclear disaster in Japan, China is still expected to proceed with its reactor construction programme – it already has 25 plants under construction, half of the world's new capacity.
CGNPG offered 290p a share for Kalahari Minerals in March, valuing the mining group at £756m, but the deal fell apart after the Chinese company tried to cut the price after Fukushima.
The tsunami led Japan, Germany and Austria to halt their new nuclear programmes or phase out reactors early, reducing uranium's value as a fuel.
China's Minmetals launched a $1.2bn offer last month for Anvil Mining, a copper producer with assets in the Democratic Republic of Congo.