Three-year deal between Siemens and the Carbon Trust will provide funding for energy efficiency measures and equipment
Damian Carrington The Guardian, Friday 4 March 2011
Businesses will be given green loans totalling £550m to cut their energy use as part of a three-year deal between the financial arm of Siemens and the Carbon Trust, it was announced on Friday.
The loans represent a significant new source of funding for energy efficiency measures and equipment, such as low-energy lighting and biomass heating. The savings in the companies' power bills is expected to at least match the repayments of the loans. The measures will also cut the carbon footprint of UK business, which currently accounts for around 40% of UK emissions.
"Driving green growth in the UK is key to our economic recovery," said Tom Delay, the chief executive of the Carbon Trust. "A missing ingredient at present is access to affordable finance to enable business to make green investments. This new major finance facility will improve business competitiveness, cut carbon and boost green growth."
Miles Templeman, the director general of the Institute of Directors, said: "In today's high-energy cost environment, improving energy efficiency is a must for all businesses. The new scheme could play a significant role in stimulating innovative solutions."
The loans will be provided by Siemens Financial Services in the UK, with the Carbon Trust assessing the cost, energy and carbon savings of the plans proposed by companies. The Carbon Trust anticipates it will generate lifetime energy cost savings of £1bn and 5.5m tonnes of carbon.
The scheme opens on 4 April and any energy equipment is eligible as long as it meets the scheme's energy-saving criteria. A previous scheme through which the Carbon Trust made interest-free loans of up to £250,000 each to small to medium-sized enterprises for energy efficiency ends on 28 March.
The loans will be made at commercial rates for periods of one to seven years and sums from £1,000 to several hundred thousand pounds.
John Sauven, the executive director of Greenpeace UK, said: "The Siemens-Carbon Trust green finance deal is exactly the sort of initiative that we need to see happening more frequently in the future. A green growth strategy can only work if it is backed by green finance."
Analysts agree that increasing energy efficiency is frequently the cheapest way of cutting greenhouse gas emissions, but requires upfront investment. The government's plan for a green investment bank, which could help finance energy-efficient technology, is currently being hampered by objections from the Treasury over the scale and scope of its operations. The government has already cut funding to the Carbon Trust and the Energy Savings Trust by 40% and 50% respectively.
The government also has a "green deal" programme, currently being debated in parliament, to provide loans for energy efficiency improvements to homes and small and medium-sized businesses. The Department of Energy and Climate Change estimates it will provide £7bn a year of private sector investment. It is expected to start after March 2012 and some experts are concerned that only the simplest measures, such as loft insulation, will be eligible.
Neil Bentley, the deputy director general of the CBI, said: "The government's green deal energy efficiency scheme could help cut emissions from buildings, but with 18 months to go, the businesses that will have to deliver it still do not have enough detail on how it is going to work."
Saturday, 5 March 2011
Soaring oil price reignites fossil fuel vs renewables debate
As pressure grows on the government to stabilise fuel prices via tax breaks, green campaigners say this may be the ideal time to reduce the UK's dependence on oil and gas
Fiona Harvey, environment correspondent guardian.co.uk, Thursday 3 March 2011 15.48 GMT
High oil prices are a headache for governments. Ministers are acutely aware that the price at the petrol pump is one of the most emotive issues for voters – they remember keenly the humiliation of the Labour government in 2000 when high prices sparked nationwide protests that threatened to paralyse the economy and forced an embarrassing government climbdown. Oil price rises are also one of the key drivers of high inflation, which is already prompting the Bank of England to consider raising interest rates despite the fragile state of the economic recovery.
Rising inflation and the prospect of a repeat of the 2000 fiasco are causing deep unease in the coalition. As they did in 2000, representatives of the haulage industry, vehicle manufacturers and motoring organisations have called for tax breaks to stabilise fuel prices in order to bring down pump prices to the levels of December 2009. The campaign has some high-profile backers including Boris Johnson, mayor of London. The chancellor, George Osborne, has hinted he may look favourably on the proposals.
Chris Huhne, the Liberal Democrat climate change secretary, is standing firm against these calls, arguing that an oil price of more than $100 a barrel means green policies – such as subsidies to renewable energy – are cheaper for the consumer, and that the key to combating higher prices is to reduce the UK's dependence on fossil fuels.
Ceding to the calls for a fuel price stabiliser would cost £6bn in lost taxation, the Green Alliance thinktank has calculated. Taxpayers would effectively have to subsidise motorists. "It's fiscally irresponsible to think the government can stop the price of fuel from going up," said Chris Hewett, economist for the Green Alliance. "Cutting fuel duty means other taxes have to go up or further spending cuts need to be made."
However much ministers may wish it, the row over fuel prices is unlikely to go away. The UK is more dependent than ever on oil imports, which have risen sharply since 2000 when production from the North Sea's oil and gas fields went into steep decline.
The key to weaning the UK away from foreign oil, Huhne says, is to reduce the need for petrol. This can be done with a mixture of policies including tax rebates and cash incentives for electric cars, more car pooling services and improvements to public transport.
But green campaigners believe the government's policies on cars do not stack up. "Successive governments have failed on transport and this government is not doing any better," said Mike Childs, head of climate change at the environmental pressure group Friends of the Earth.
In January the government launched a scheme to subsidise electric car purchases by up to £5,000 each. The subsidy will be reviewed in 2012, which means that only the first year of funding – £43m or enough for about 8,600 cars – is guaranteed.
This is too little to have much effect, according to Shai Agassi, founder of the electric vehicle infrastructure company Better Place. "Investors want to see clarity on the regulatory framework that would indicate that the government would support this for a long period of time, not just for a small number of cars or a short period of time," he said.
While the cost of motoring is increasing, the cost of taking public transport is rising even faster. Last year's comprehensive spending review will mean that rail fares go up by 25% over the next four years. Bus fares are also on the increase and services are being cut. Peter Head, director at the engineering company Arup, has estimated that about 1% of GDP a year should be invested in public transport but the UK falls below this.
Meanwhile the UK's policies on car taxation are less effective than those of other European countries, according to Hewett. Germany, France, Denmark, the Netherlands, Ireland and Sweden all have more effective policies, offering cash incentives or much more generous tax terms than the UK. Hewett said: "The evidence suggests that in countries where such tax differentials have been in place for some time like Denmark and the Netherlands, the overall fuel efficiency of the vehicle fleet is better than in the UK, and has improved more quickly over time."
In Spain the government is taking the drastic step of cutting speed limits on motorways and cutting train fares, as the unrest in Libya threatens the country's oil supplies.
By contrast, in the UK the government has failed to put in place the policies that are needed to insulate Britain against high oil prices and move to a low-carbon economy, and the effects will be felt in higher costs and higher greenhouse gas emissions, says Childs, of Friends of the Earth. "At some point the imperatives of an ever higher oil price and of climate change will mean that the government will need to get to grips with greening transport," he said. "They should do it now."
Fiona Harvey, environment correspondent guardian.co.uk, Thursday 3 March 2011 15.48 GMT
High oil prices are a headache for governments. Ministers are acutely aware that the price at the petrol pump is one of the most emotive issues for voters – they remember keenly the humiliation of the Labour government in 2000 when high prices sparked nationwide protests that threatened to paralyse the economy and forced an embarrassing government climbdown. Oil price rises are also one of the key drivers of high inflation, which is already prompting the Bank of England to consider raising interest rates despite the fragile state of the economic recovery.
Rising inflation and the prospect of a repeat of the 2000 fiasco are causing deep unease in the coalition. As they did in 2000, representatives of the haulage industry, vehicle manufacturers and motoring organisations have called for tax breaks to stabilise fuel prices in order to bring down pump prices to the levels of December 2009. The campaign has some high-profile backers including Boris Johnson, mayor of London. The chancellor, George Osborne, has hinted he may look favourably on the proposals.
Chris Huhne, the Liberal Democrat climate change secretary, is standing firm against these calls, arguing that an oil price of more than $100 a barrel means green policies – such as subsidies to renewable energy – are cheaper for the consumer, and that the key to combating higher prices is to reduce the UK's dependence on fossil fuels.
Ceding to the calls for a fuel price stabiliser would cost £6bn in lost taxation, the Green Alliance thinktank has calculated. Taxpayers would effectively have to subsidise motorists. "It's fiscally irresponsible to think the government can stop the price of fuel from going up," said Chris Hewett, economist for the Green Alliance. "Cutting fuel duty means other taxes have to go up or further spending cuts need to be made."
However much ministers may wish it, the row over fuel prices is unlikely to go away. The UK is more dependent than ever on oil imports, which have risen sharply since 2000 when production from the North Sea's oil and gas fields went into steep decline.
The key to weaning the UK away from foreign oil, Huhne says, is to reduce the need for petrol. This can be done with a mixture of policies including tax rebates and cash incentives for electric cars, more car pooling services and improvements to public transport.
But green campaigners believe the government's policies on cars do not stack up. "Successive governments have failed on transport and this government is not doing any better," said Mike Childs, head of climate change at the environmental pressure group Friends of the Earth.
In January the government launched a scheme to subsidise electric car purchases by up to £5,000 each. The subsidy will be reviewed in 2012, which means that only the first year of funding – £43m or enough for about 8,600 cars – is guaranteed.
This is too little to have much effect, according to Shai Agassi, founder of the electric vehicle infrastructure company Better Place. "Investors want to see clarity on the regulatory framework that would indicate that the government would support this for a long period of time, not just for a small number of cars or a short period of time," he said.
While the cost of motoring is increasing, the cost of taking public transport is rising even faster. Last year's comprehensive spending review will mean that rail fares go up by 25% over the next four years. Bus fares are also on the increase and services are being cut. Peter Head, director at the engineering company Arup, has estimated that about 1% of GDP a year should be invested in public transport but the UK falls below this.
Meanwhile the UK's policies on car taxation are less effective than those of other European countries, according to Hewett. Germany, France, Denmark, the Netherlands, Ireland and Sweden all have more effective policies, offering cash incentives or much more generous tax terms than the UK. Hewett said: "The evidence suggests that in countries where such tax differentials have been in place for some time like Denmark and the Netherlands, the overall fuel efficiency of the vehicle fleet is better than in the UK, and has improved more quickly over time."
In Spain the government is taking the drastic step of cutting speed limits on motorways and cutting train fares, as the unrest in Libya threatens the country's oil supplies.
By contrast, in the UK the government has failed to put in place the policies that are needed to insulate Britain against high oil prices and move to a low-carbon economy, and the effects will be felt in higher costs and higher greenhouse gas emissions, says Childs, of Friends of the Earth. "At some point the imperatives of an ever higher oil price and of climate change will mean that the government will need to get to grips with greening transport," he said. "They should do it now."
Let green jobs grow with the renewable heat incentive
The government risks squandering Labour's green legacy if the high level of expectation is allowed to turn into frustration
Huw Irranca-Davies
guardian.co.uk, Friday 4 March 2011 14.06 GMT
Way back in February 2010, a bold and radical secretary of state by the name of Ed Miliband set the ball rolling for the renewable heat incentive (RHI). It was a ground-breaking proposal to boost dramatically over time the proportion of heat generated from renewable sources in the UK.
Carbon emissions would be driven down, and many thousands of new green jobs would be created throughout the country in the design, manufacture, installation and servicing of renewable heat products. There would be direct wins for communities and householders who could take advantage of the RHI to financially insulate themselves against rising heating costs.
So here we are, over a year later, and … well… we're still waiting. The initial consultation took place in the spring of 2010, so we were expecting some steady progress. A general election that brought a change of government got in the way. There was then some doubt that the RHI would survive the cuts in last autumn's CSR, particularly after Chris Huhne "forgot" to put the RHI into the coalition agreement. But it did survive, and then Christmas came and went, and people and businesses saw once again the costs of heating their homes rising in a severe and prolonged cold spell.
The government needs to stop dithering and produce immediately the detailed proposals for the RHI. Throughout the country, companies are standing by, ready to roll out the scheme, but not until the government gives absolute clarity on the details: What technologies will be eligible for the RHI? What will the tariff levels be? Will it support heating at all scales, including households, businesses, offices, public sector buildings and industrial processes in large factories?
In February, in an open letter to the energy secretary, Chris Huhne, the Renewable Energy Association claimed that the continually moving date for providing the mechanisms for the RHI was "sapping the confidence of potential investors" and that "numerous projects are on hold, with recruitment frozen in many companies and other companies having to lay-off staff." They state categorically that "uncertainty and delay is damaging the industry."
What was a high level of expectation and interest over the past year is rapidly turning to frustration and anger. It hasn't been helped by the Tory-led coalition's recent inept handling of the feed-in tariff review, which sent shockwaves through the solar photovoltaic sector and called into question the government's ability to give certainty to the renewables sector as a whole.
When he discussed the RHI in July 2009, former Conservative shadow secretary of state for energy and climate change, Greg Clark, said that "policy doesn't need to be this complicated" – and he's right. Labour's proposals were laid out a whole year ago when we were still in government, covering technologies such as solar thermal, geothermal, air source heat pumps, and ground source heat pumps.
Don't squander Labour's green legacy, Mr Huhne. Start by publishing the finalised RHI proposals, let the green jobs grow, and the carbon emissions shrink.
• Huw Irranca-Davies is shadow energy minister
Huw Irranca-Davies
guardian.co.uk, Friday 4 March 2011 14.06 GMT
Way back in February 2010, a bold and radical secretary of state by the name of Ed Miliband set the ball rolling for the renewable heat incentive (RHI). It was a ground-breaking proposal to boost dramatically over time the proportion of heat generated from renewable sources in the UK.
Carbon emissions would be driven down, and many thousands of new green jobs would be created throughout the country in the design, manufacture, installation and servicing of renewable heat products. There would be direct wins for communities and householders who could take advantage of the RHI to financially insulate themselves against rising heating costs.
So here we are, over a year later, and … well… we're still waiting. The initial consultation took place in the spring of 2010, so we were expecting some steady progress. A general election that brought a change of government got in the way. There was then some doubt that the RHI would survive the cuts in last autumn's CSR, particularly after Chris Huhne "forgot" to put the RHI into the coalition agreement. But it did survive, and then Christmas came and went, and people and businesses saw once again the costs of heating their homes rising in a severe and prolonged cold spell.
The government needs to stop dithering and produce immediately the detailed proposals for the RHI. Throughout the country, companies are standing by, ready to roll out the scheme, but not until the government gives absolute clarity on the details: What technologies will be eligible for the RHI? What will the tariff levels be? Will it support heating at all scales, including households, businesses, offices, public sector buildings and industrial processes in large factories?
In February, in an open letter to the energy secretary, Chris Huhne, the Renewable Energy Association claimed that the continually moving date for providing the mechanisms for the RHI was "sapping the confidence of potential investors" and that "numerous projects are on hold, with recruitment frozen in many companies and other companies having to lay-off staff." They state categorically that "uncertainty and delay is damaging the industry."
What was a high level of expectation and interest over the past year is rapidly turning to frustration and anger. It hasn't been helped by the Tory-led coalition's recent inept handling of the feed-in tariff review, which sent shockwaves through the solar photovoltaic sector and called into question the government's ability to give certainty to the renewables sector as a whole.
When he discussed the RHI in July 2009, former Conservative shadow secretary of state for energy and climate change, Greg Clark, said that "policy doesn't need to be this complicated" – and he's right. Labour's proposals were laid out a whole year ago when we were still in government, covering technologies such as solar thermal, geothermal, air source heat pumps, and ground source heat pumps.
Don't squander Labour's green legacy, Mr Huhne. Start by publishing the finalised RHI proposals, let the green jobs grow, and the carbon emissions shrink.
• Huw Irranca-Davies is shadow energy minister