So NERN now has 400 members. Since I started as manager, membership has been growing steadily at a rate of about 17 new members per month. In case you are wondering I've now been in post for nine months and NERN had 250 members when I started. I have yet to embark upon a significant campaign to advertise NERN to the wider world (although this is coming) so I think that new members are probably finding NERN through a variety of means. Word of mouth is important and I've certainly been flapping mine ever since I started. It also helps that NERN is a top hit in Google when you search energy research network. I hope that you are all encouraging colleagues and friends to join. I'm considering a special prize for our 1000th member – any suitably low carbon suggestions would be greatly appreciated.
Where do the NERN members come from? I was mildly surprised and pleased to see that 25% of NERN members are based outside of the UK. In fact 14% of NERN members hail from outside of the EU. Within the EU, NERN has proved most popular in Germany, but the network has members in 11 different EU countries. Outside of the EU, NERN has been a hit in both the USA and India and has attracted members from 14 different countries. I'd be really interested in hearing from members about how they heard about NERN, particularly if you heard through what might be considered an unusual route.
NERN is a predominately male network with men outnumbering women by a factor of three to one. How do members feel that this reflects the gender balance of people in energy research?
The NERN membership is dominated by academics, who comprise 57% of NERN members. The other key NERN member groups are industry (15%), consultants (7.5%) Government and regulators (7.5%) and NGOs (7%). The remaining members include a suspiciously high proportion of policy specialists from learned and professional societies which are essentially a number of colleagues from my previous position who I've bullied into joining NERN (hello to all of you).
So what lies ahead for NERN now that it has grown into such a mighty cohort? Well, one of my aims is to grow NERN still further and in fact by the end of UKERC Phase I (April 2009) I hope we can achieve 1000 members. Should we be fortunate enough to be granted funding for UKERC Phase II then I have a number of plans in the pipeline, but actually, before I bore you these, I'd really like to hear any ideas that you might have about the future direction of NERN. Please send me an email or call me (+44 (0)20 7594 1572) with your thoughts.
Tuesday 21 October 2008
Holding their nerve
It might not be often that I get to say this but I think this week we should applaud the UK Government and the EU leaders. Locally, our newly appointed Climate Change and Energy Secretary Ed Miliband has agreed with the analysis Committee on Climate Change (CCC) and agreed to cut UK greenhouse gas emissions 80% by 2050. It has proven to be a popular choice amongst many key groups, however, some have expressed concern that aviation and shipping are excluded from the target. Lib Dem energy spokesman Steve Webb summed it up as "It's like telling everyone you're going on a calorie-controlled diet but not counting cream cakes". The eagle eyed amongst you will also have noticed that Ed Miliband made specific reference to amending the Energy Bill to include a feed-in tariff for microgeneration. We will all now wait with bated breath for the CCC to publish their first greenhouse gas budgets, and therefore the trajectory through which we will seek to meet the target, in December this year.
There have been further announcements and the launch of a website for the new Department of Energy and Climate Change. We now know that in addition to Ed Miliband, DECC will be served by three ministers. Mike O'Brien will be responsible for delivering a low carbon economy and ensuring secure and affordable energy supply. Lord Hunt of Kings Heath will be responsible for energy innovation and emerging technologies, heat supply (including locally distributed energy) and coal liabilities including coal health payments. Finally, Joan Ruddock will be responsible for taking forward the Government's fuel poverty policy and, delivering the PM's fuel bills initiative, energy savings (in the residential sector), Carbon Reduction Commitment, behaviour change and Act on CO2, Climate Change Levy and Climate Change Agreements and Bill Minister for the Climate Change Bill.
In Europe, EU leaders stood firm against a last minute rebellion by several countries against the EU climate goals. Unsurprisingly the vexed countries cited worries that keeping the targets would further damage their industries already weakened by the current financial crisis.
As you have probably figured out by now, I am obsessed by the credit crunch. I have been doing some back of an envelope calculations about the costs of the UK bail out package in comparison to the 1-2% of GDP that the CCC predict that it will cost to reduce greenhouse gas 80% by 2050. Current UK GDP is approximately £1.4 trillion. The recent bail out of HBOS and other banks cost around £40bn (2.8% of GDP). You could add to this the £127bn (9% of GDP) of mortgage debt that the Government has acquired through nationalising Northern Rock and Bradford and Bingley. In fact the full scale of the bail out package is a whopping £500bn (35.7% GDP) amounting to a potential liability of each taxpayer of £20,000. Wow! Now I know it's an utterly unfair and completely pointless thing to do, but how about contrasting this number with the cost of low carbon technologies? For example, each MW of wind power costs (very roughly) £500K and the proposed E.ON 1.6GW nuclear power stations cost £4bn each. As you can see we are talking very big numbers.
There have been further announcements and the launch of a website for the new Department of Energy and Climate Change. We now know that in addition to Ed Miliband, DECC will be served by three ministers. Mike O'Brien will be responsible for delivering a low carbon economy and ensuring secure and affordable energy supply. Lord Hunt of Kings Heath will be responsible for energy innovation and emerging technologies, heat supply (including locally distributed energy) and coal liabilities including coal health payments. Finally, Joan Ruddock will be responsible for taking forward the Government's fuel poverty policy and, delivering the PM's fuel bills initiative, energy savings (in the residential sector), Carbon Reduction Commitment, behaviour change and Act on CO2, Climate Change Levy and Climate Change Agreements and Bill Minister for the Climate Change Bill.
In Europe, EU leaders stood firm against a last minute rebellion by several countries against the EU climate goals. Unsurprisingly the vexed countries cited worries that keeping the targets would further damage their industries already weakened by the current financial crisis.
As you have probably figured out by now, I am obsessed by the credit crunch. I have been doing some back of an envelope calculations about the costs of the UK bail out package in comparison to the 1-2% of GDP that the CCC predict that it will cost to reduce greenhouse gas 80% by 2050. Current UK GDP is approximately £1.4 trillion. The recent bail out of HBOS and other banks cost around £40bn (2.8% of GDP). You could add to this the £127bn (9% of GDP) of mortgage debt that the Government has acquired through nationalising Northern Rock and Bradford and Bingley. In fact the full scale of the bail out package is a whopping £500bn (35.7% GDP) amounting to a potential liability of each taxpayer of £20,000. Wow! Now I know it's an utterly unfair and completely pointless thing to do, but how about contrasting this number with the cost of low carbon technologies? For example, each MW of wind power costs (very roughly) £500K and the proposed E.ON 1.6GW nuclear power stations cost £4bn each. As you can see we are talking very big numbers.
Tuesday 7 October 2008
A new department is born
Breaking news – I'll not get say that often in a weekly newsletter! We have a new Department of Energy and Climate Change to be headed by Ed Milliband. The new Department (DECC) has snaffled responsibility for energy from BERR and climate change from Defra. The formation of DECC has been welcomed by several key organisations including CBI and SDC.
So after the excitement it's back to what I was going to talk about. This week I thought I would return to the subject of how the credit crunch affects low carbon technologies. I heard wonderful quote at the superb Earthscan Sustainability 2.0 event earlier this week that summed up the differences between the financial and low carbon technology sectors that went something along the following lines:
When you are talking 2050 for low carbon technologies you mean the middle of the century, when you say 2050 in the banking sector you mean ten to nine tonight.
So what else have we learned about the impacts of the credit crunch over the last couple of weeks? Firstly I'd like to come back to my open question about its effects on public spending. Barack Obama has admitted that the proposed bailout may impact his ambition to free the United States from reliance on Middle East oil imports within 10 years. He has been quoted as saying "I'm not willing to give up the need to do it, but there may be individual components of it that we can't do". On the flip side of this, the bailout package has been sweetened by the extension of several tax relief schemes, including tax credits for business R&D and also renewable energy incentives both of which are probably good news for the low carbon technology sector. Curiously the package also includes a measure to exempting wooden practice arrows used by children from an excise tax of 39 cents per arrow. I suspect that this is a feature of what happens when things get rushed.
There has been further analysis on how the credit crunch is going to effect particular energy technologies. In the US, the booming wind sector could be hit badly. Large companies, including the bankrupt Lehman Brothers, have previously invested in wind power to take advantage of the tax credit mentioned above. However, this is not an investment without risk and under the current climate, risk is something that investors are not actively seeking.
The solar power industry may also be adversely affected, particularly those with projects in the pipeline that need dramatic scale up and hence investment. There has been a scale back in Initial Public Offerings (first opportunities to buy a company's stock as it goes onto the public market) for solar and other energy companies. Once again the collapse of Lehman Brothers is cited as a problem because the bank has become a principal underwriter for solar energy companies raising money or financing debt to build factories and solar farms. There is a fear that in the short term there may be a consolidation of companies. Fortunately, for those companies that survive the picture is rosier in the long term (2010 onwards – the year not the time).
The credit crunch may also dent the ambitions of the biofuels industry, for many of the same reasons as cited in the two examples above.
The upshot of what I have read this week is that progress in some of the key low carbon technologies is going to be slowed in the short term. By how much is unclear, but there may well be knock-on effects to goals, such as the 2020 UK 15% renewable energy target. The prognosis in the longer term seems to be good – always assuming the financial markets don't meltdown completely.
So after the excitement it's back to what I was going to talk about. This week I thought I would return to the subject of how the credit crunch affects low carbon technologies. I heard wonderful quote at the superb Earthscan Sustainability 2.0 event earlier this week that summed up the differences between the financial and low carbon technology sectors that went something along the following lines:
When you are talking 2050 for low carbon technologies you mean the middle of the century, when you say 2050 in the banking sector you mean ten to nine tonight.
So what else have we learned about the impacts of the credit crunch over the last couple of weeks? Firstly I'd like to come back to my open question about its effects on public spending. Barack Obama has admitted that the proposed bailout may impact his ambition to free the United States from reliance on Middle East oil imports within 10 years. He has been quoted as saying "I'm not willing to give up the need to do it, but there may be individual components of it that we can't do". On the flip side of this, the bailout package has been sweetened by the extension of several tax relief schemes, including tax credits for business R&D and also renewable energy incentives both of which are probably good news for the low carbon technology sector. Curiously the package also includes a measure to exempting wooden practice arrows used by children from an excise tax of 39 cents per arrow. I suspect that this is a feature of what happens when things get rushed.
There has been further analysis on how the credit crunch is going to effect particular energy technologies. In the US, the booming wind sector could be hit badly. Large companies, including the bankrupt Lehman Brothers, have previously invested in wind power to take advantage of the tax credit mentioned above. However, this is not an investment without risk and under the current climate, risk is something that investors are not actively seeking.
The solar power industry may also be adversely affected, particularly those with projects in the pipeline that need dramatic scale up and hence investment. There has been a scale back in Initial Public Offerings (first opportunities to buy a company's stock as it goes onto the public market) for solar and other energy companies. Once again the collapse of Lehman Brothers is cited as a problem because the bank has become a principal underwriter for solar energy companies raising money or financing debt to build factories and solar farms. There is a fear that in the short term there may be a consolidation of companies. Fortunately, for those companies that survive the picture is rosier in the long term (2010 onwards – the year not the time).
The credit crunch may also dent the ambitions of the biofuels industry, for many of the same reasons as cited in the two examples above.
The upshot of what I have read this week is that progress in some of the key low carbon technologies is going to be slowed in the short term. By how much is unclear, but there may well be knock-on effects to goals, such as the 2020 UK 15% renewable energy target. The prognosis in the longer term seems to be good – always assuming the financial markets don't meltdown completely.
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