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.
Tuesday, 21 October 2008
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.
Friday, 26 September 2008
Money, energy and pies...
Perhaps it's just because I wrote about the credit crunch last week (and thank you to all who responded to my question about public spending – I'm still gathering evidence about this), but it seems that there has been a lot of talk about money and energy in the news this week.
I'm sure many of you will have noticed the EDF plans to buy British Energy for £12.5bn. There has been a lot of debate about what this means for the UK. On the one hand it seems that a total of four new 1.6 gigawatt EPR nuclear reactors could be built at two sites, Hinkley Point in Somerset and Sizewell in Suffolk. On the other hand there are fears this takeover could lead to an increase in energy prices for consumers. On the third hand (or perhaps foot) there is a fear about job losses, particularly in Scotland.
A McKinsey study has shown that CCS could be economically viable by 2030, but that it will take subsidies of around £8bn to get achieve this. Both Al Gore and the Environment Agency are keen to see CCS fitted to coal fire power stations as soon as possible. In fact they have both gone so far as to recommend that no new coal fired power plants should that cannot capture and store carbon dioxide. Al Gore event went on to urge young people to engage in civil disobedience to stop non-CCS plants being built!
There have been several other announcements on the energy front this week. Google has teamed up with General Electric to develop a "smart" electric power grid and promote clean energy. Three Scottish developed Pelamis wave power devices have been installed off the coastline in Portugal and will generate 2.25 MW peak power. Naturally there were some questions about why the technology had not been installed in Scotland, where it was developed. The answer, if you are interested, appears to be because the Portuguese feed-in tariff offers a better investment return than the UK Renewables Obligation in this case. Moving across the border, Portugal's neighbour Spain has just announced that they have somewhat blunted the sharp cuts in their solar power subsidy scheme.
Moving away from money, three other stories have caught my attention this week. Firstly, my favourite quote of the week was delivered by the Scottish Green's who have compared the aviation opt out in the Climate Change Bill to "diet plan with an opt-out for pies". A high tech solution has been proposed by a rocket scientist to track what's happening inside a Greenland glacier – he has put 90 rubber ducks onto the glacier and is looking to find out where they end up. This reminded me of the story of how the adventures of a container of rubber ducks, frogs, turtles and beavers that fell off a cargo ship in the Pacific Ocean provided extremely valuable evidence about global ocean currents. The Met Office has told climate sceptics that they have their head in the sand. This stern response comes after prominent sceptics claimed that global warming has stopped (presumably due to the rubbish summer we've just suffered). In fact we'll all be reassured to know that global warming is continuing unabated. Finally, ecotarianism appears to be the new way to save the planet – it is all about eating sustainably, which seems much harder than it sounds particularly when you take into account the minefield of global food supply chains.
Oh, and one final thing, apparently some bloke called Jeff Hardy was quoted in New Scientist in an article about careers for chemists in energy.
I'm sure many of you will have noticed the EDF plans to buy British Energy for £12.5bn. There has been a lot of debate about what this means for the UK. On the one hand it seems that a total of four new 1.6 gigawatt EPR nuclear reactors could be built at two sites, Hinkley Point in Somerset and Sizewell in Suffolk. On the other hand there are fears this takeover could lead to an increase in energy prices for consumers. On the third hand (or perhaps foot) there is a fear about job losses, particularly in Scotland.
A McKinsey study has shown that CCS could be economically viable by 2030, but that it will take subsidies of around £8bn to get achieve this. Both Al Gore and the Environment Agency are keen to see CCS fitted to coal fire power stations as soon as possible. In fact they have both gone so far as to recommend that no new coal fired power plants should that cannot capture and store carbon dioxide. Al Gore event went on to urge young people to engage in civil disobedience to stop non-CCS plants being built!
There have been several other announcements on the energy front this week. Google has teamed up with General Electric to develop a "smart" electric power grid and promote clean energy. Three Scottish developed Pelamis wave power devices have been installed off the coastline in Portugal and will generate 2.25 MW peak power. Naturally there were some questions about why the technology had not been installed in Scotland, where it was developed. The answer, if you are interested, appears to be because the Portuguese feed-in tariff offers a better investment return than the UK Renewables Obligation in this case. Moving across the border, Portugal's neighbour Spain has just announced that they have somewhat blunted the sharp cuts in their solar power subsidy scheme.
Moving away from money, three other stories have caught my attention this week. Firstly, my favourite quote of the week was delivered by the Scottish Green's who have compared the aviation opt out in the Climate Change Bill to "diet plan with an opt-out for pies". A high tech solution has been proposed by a rocket scientist to track what's happening inside a Greenland glacier – he has put 90 rubber ducks onto the glacier and is looking to find out where they end up. This reminded me of the story of how the adventures of a container of rubber ducks, frogs, turtles and beavers that fell off a cargo ship in the Pacific Ocean provided extremely valuable evidence about global ocean currents. The Met Office has told climate sceptics that they have their head in the sand. This stern response comes after prominent sceptics claimed that global warming has stopped (presumably due to the rubbish summer we've just suffered). In fact we'll all be reassured to know that global warming is continuing unabated. Finally, ecotarianism appears to be the new way to save the planet – it is all about eating sustainably, which seems much harder than it sounds particularly when you take into account the minefield of global food supply chains.
Oh, and one final thing, apparently some bloke called Jeff Hardy was quoted in New Scientist in an article about careers for chemists in energy.
Saturday, 20 September 2008
Will a low carbon phoenix rise from the ashes of the financial meltdown?
It has been very difficult to ignore the financial meltdown resulting from the global credit crunch this week. The question that has been circulating my brain throughout this saga is "what effect will the credit crunch have on investment in low carbon technologies?" It's a somewhat daft question because it all rather depends what aspect of low carbon technologies you are talking about. Fortunately, far more intelligent people than me have been pondering this.
Jeremy Leggett , founder and chairman of Solarcentury, thinks that the renewables sector will not only survive the credit crunch, but it will actually prosper. He cites the significant growth of investment (>$100bn in 2007) in renewables and the growth in key technologies, such as solar PV (67% growth in 2007). To some extent others agree, although the prognosis seems somewhat gloomier in the short term.
Rabobank green energy executive Tanja Cuppen has suggested that the credit crunch will have a major impact on renewable energy and the worst is yet to come. Because credit will be harder and more expensive to obtain it is estimated that the European renewable energy sector will experience a shortfall of €21 billion up to 2020 . This represents almost a quarter of the €85 billion worth of investment that wind, solar and other forms of zero-emissions power will require between now and then to meet the EU's target for 20 per cent of electricity to be generated from green sources by 2020.
It is likely that the different sectors of low carbon technology will feel different effects from the credit crunch . Established industries such as wind and biofuels will find it tougher and more expensive to raise finance from banks and other institutions ultimately meaning that energy from such projects will cost more. The private venture capital for early stage companies, however, seems to be unperturbed by the crisis thus far and continues to flow. For companies with new technologies the pinch point comes where finance needs to be raised to finance the gap between product development and commercialisation. Overall the long term prognosis for investment in low carbon technology remains good – like all other sectors it will just have to tighten its belt during this period.
I have found it difficult to find any reference to what might happen to public (government) investment in low carbon projects. For example, will the credit crunch have an effect on the timescale for the global demonstration of CCS technologies? I'd be happy to hear from anyone on this subject – if only to put my own mind at rest and so that I stop annoying friends and colleagues with my incessant questions.
Thursday, 18 September 2008
We are all still here...
Well, we all seem to still be here, so the switching on of the Large Hadron Collider hasn't generated a black hole. Although I think they would probably need to collide something to make that happen. I swear that some journalists are almost a little disappointed. So how many of you have been discussing the Higgs Boson over your cornflakes? Purely for my own interest, does anyone know how much energy it takes to start and run the LHC?
Some political news has passed across the radar this week. Firstly, the American Presidential candidates have been turning their minds to the energy matters. Barack Obama has outlined plans for creating 5m new green collar jobs, ensuring 25% of electricity comes from renewable sources by 2025, and putting a million plug-in hybrid cars on the road by 2015 and has set a goal to end the US' dependence on oil from the Middle East within ten years. Meanwhile John McCain has suggested that the US "will produce more energy at home. We will drill new wells offshore, and we'll drill them now. We will build more nuclear power plants. We will develop clean coal technology. We will increase the use of wind, tide, solar and natural gas. We will encourage the development and use of flex fuel, hybrid and electric automobiles".
In domestic news the high energy prices are threatening to push 5.7 million households (25%) into fuel poverty. Fuel poverty occurs where households spend 10% or greater of their income on fuel bills. However, help is at hand because the Government is due to announce a package of energy efficiency measures for 10 million households. The measures are expected to include help for households to install insulation and double glazing. Furthermore, according to a price guide published by the Royal Institute of Chartered Surveyors (RICS) such energy efficiency measures are good value for money. However, the RICS report is less kind to new boilers and solar photovoltaic cells.
Finally, in order to save fuel and carbon emissions train drivers are being encouraged to switch off their engines and coast on downhill sections of track. It all sounds like a good idea as long as they remember to turn the engine back on!
Some political news has passed across the radar this week. Firstly, the American Presidential candidates have been turning their minds to the energy matters. Barack Obama has outlined plans for creating 5m new green collar jobs, ensuring 25% of electricity comes from renewable sources by 2025, and putting a million plug-in hybrid cars on the road by 2015 and has set a goal to end the US' dependence on oil from the Middle East within ten years. Meanwhile John McCain has suggested that the US "will produce more energy at home. We will drill new wells offshore, and we'll drill them now. We will build more nuclear power plants. We will develop clean coal technology. We will increase the use of wind, tide, solar and natural gas. We will encourage the development and use of flex fuel, hybrid and electric automobiles".
In domestic news the high energy prices are threatening to push 5.7 million households (25%) into fuel poverty. Fuel poverty occurs where households spend 10% or greater of their income on fuel bills. However, help is at hand because the Government is due to announce a package of energy efficiency measures for 10 million households. The measures are expected to include help for households to install insulation and double glazing. Furthermore, according to a price guide published by the Royal Institute of Chartered Surveyors (RICS) such energy efficiency measures are good value for money. However, the RICS report is less kind to new boilers and solar photovoltaic cells.
Finally, in order to save fuel and carbon emissions train drivers are being encouraged to switch off their engines and coast on downhill sections of track. It all sounds like a good idea as long as they remember to turn the engine back on!
Friday, 5 September 2008
Big annoucements!
Big announcements in the news! Well, at least quite big anyway...
Of course the most Earth shattering announcement is the double whammy that the NERN members' database is now searchable and that the Carbon Crucible online application is now open.
Coming a close second is a triumvirate of proclamations. Firstly, Mayor London Boris Johnson has broken his silence on environmental matters with a double announcement. Firstly, the London's Climate Change Adaptation Strategy has been launched. The strategy proposes to prepare London for warmer, wetter and drier climate as well as extreme weather events. In addition to an adaptation strategy, London also has a target to reduce carbon emissions 60% by 2025. In order to assist the Mayor in achieving these goals, Isabel Dedring has been appointed as a new environmental advisor. Secondly, it appears that Germany has taken the lead on Carbon Capture and Storage (CCS) with commissioning of a 30MW oxyfuel coal fired power plant complete with CCS. It is a lot smaller than the UK CCS competition , which aims to demonstrate the capture of 90% of the CO2 emitted by the equivalent of 300-400MW generating capacity. UKERC's Stuart Haszeldine was on hand to explain to the BBC how carbon storage works . Finally, we might soon be seeing giant 'eco-rigs' in the coastal waters around Japan. These 'eco-rigs', which may be up 1.6 square kilometres in size, are essentially floating 300MW renewable energy power stations bristling with wind turbines and hexagonal photovoltaic cells exporting energy to the mainland. In a clever addition, some of the power will be siphoned off to shine LED arrays under the platforms onto special seaweed beds promoting biomass growth. Not only is CO2 absorbed as the seaweed grows but the seaweed also provides food for fish and plankton. In a final innovation essential minerals for the seaweed will be pumped from deeper water using the renewable power. It all sounds terrifically futuristic!
A few other news snippets piqued my interest this week. My favourite was the title 'Charge an iPod with Vodka?' – this is about a direct ethanol fuel cell used for educational purposes. Norwich-based Trident Performance Vehicles, has managed to produce a car it claims can do 60mph in 3.9 seconds and achieves 70 miles per gallon and is capable of travelling 2,000 miles on a single tank of biodiesel. Impressive stuff! Elsewhere Greenpeace has challenged ten European countries including the UK to develop a North Sea high voltage grid connecting 10,000 wind turbines together. Finally, it seems that eight out of ten Brits are annoyed with the Government forcing green values upon them and would rather be green on their own terms.
No energy animal news this week although I was amused to see the headline 'Bumblebees outwit robotic spiders' on the BBC News website.
Of course the most Earth shattering announcement is the double whammy that the NERN members' database is now searchable and that the Carbon Crucible online application is now open.
Coming a close second is a triumvirate of proclamations. Firstly, Mayor London Boris Johnson has broken his silence on environmental matters with a double announcement. Firstly, the London's Climate Change Adaptation Strategy has been launched. The strategy proposes to prepare London for warmer, wetter and drier climate as well as extreme weather events. In addition to an adaptation strategy, London also has a target to reduce carbon emissions 60% by 2025. In order to assist the Mayor in achieving these goals, Isabel Dedring has been appointed as a new environmental advisor. Secondly, it appears that Germany has taken the lead on Carbon Capture and Storage (CCS) with commissioning of a 30MW oxyfuel coal fired power plant complete with CCS. It is a lot smaller than the UK CCS competition , which aims to demonstrate the capture of 90% of the CO2 emitted by the equivalent of 300-400MW generating capacity. UKERC's Stuart Haszeldine was on hand to explain to the BBC how carbon storage works . Finally, we might soon be seeing giant 'eco-rigs' in the coastal waters around Japan. These 'eco-rigs', which may be up 1.6 square kilometres in size, are essentially floating 300MW renewable energy power stations bristling with wind turbines and hexagonal photovoltaic cells exporting energy to the mainland. In a clever addition, some of the power will be siphoned off to shine LED arrays under the platforms onto special seaweed beds promoting biomass growth. Not only is CO2 absorbed as the seaweed grows but the seaweed also provides food for fish and plankton. In a final innovation essential minerals for the seaweed will be pumped from deeper water using the renewable power. It all sounds terrifically futuristic!
A few other news snippets piqued my interest this week. My favourite was the title 'Charge an iPod with Vodka?' – this is about a direct ethanol fuel cell used for educational purposes. Norwich-based Trident Performance Vehicles, has managed to produce a car it claims can do 60mph in 3.9 seconds and achieves 70 miles per gallon and is capable of travelling 2,000 miles on a single tank of biodiesel. Impressive stuff! Elsewhere Greenpeace has challenged ten European countries including the UK to develop a North Sea high voltage grid connecting 10,000 wind turbines together. Finally, it seems that eight out of ten Brits are annoyed with the Government forcing green values upon them and would rather be green on their own terms.
No energy animal news this week although I was amused to see the headline 'Bumblebees outwit robotic spiders' on the BBC News website.
Tuesday, 2 September 2008
Wind bad for bats
The last two weeks has seen a mixture of gloom and hope in the news. In stark contrast to the way news is presented on TV I thought it might be quite nice to focus on the good news (except for the bats).
It appears scientists and engineers have been busy responding to the energy challenge in a variety of ways. The announcement that caught my eye this week relates to a claimed battery breakthrough. A company in Texas claims to have developed a barium-titanate based ultracapacitor that could "replace the electrochemical battery". A bold claim – I'm waiting with baited breath to see if this leads anywhere. Since the Olympics have just finished I thought you might also like to hear about a new world record – this time for photovoltaic cells. The US National Renewable Energy Laboratory has claimed device that is 40.8% efficient (in laboratory conditions). Less ambitious, but no less impressive, a student at the University of Portsmouth has built a working wind turbine from recycled materials for less that £20. With an output of 11.3W it is not exactly the answer to the energy crisis but an impressive effort nonetheless.
This week's animal related news brings bad news for bats. Bats, it seems, have a blind spot for wind turbines. While the chance of them being hit by a turbine blade is small, the low air pressure around turbine blades appears to be lethal as it causes their lungs to burst. Apparently birds don't have the same problem because they have more robust lungs.
It appears scientists and engineers have been busy responding to the energy challenge in a variety of ways. The announcement that caught my eye this week relates to a claimed battery breakthrough. A company in Texas claims to have developed a barium-titanate based ultracapacitor that could "replace the electrochemical battery". A bold claim – I'm waiting with baited breath to see if this leads anywhere. Since the Olympics have just finished I thought you might also like to hear about a new world record – this time for photovoltaic cells. The US National Renewable Energy Laboratory has claimed device that is 40.8% efficient (in laboratory conditions). Less ambitious, but no less impressive, a student at the University of Portsmouth has built a working wind turbine from recycled materials for less that £20. With an output of 11.3W it is not exactly the answer to the energy crisis but an impressive effort nonetheless.
This week's animal related news brings bad news for bats. Bats, it seems, have a blind spot for wind turbines. While the chance of them being hit by a turbine blade is small, the low air pressure around turbine blades appears to be lethal as it causes their lungs to burst. Apparently birds don't have the same problem because they have more robust lungs.
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