All about energy

The decision comes after months of talks and is believed to have been finalised as a result of an important change in the budget last week, which brought public grants of upwards of £60m for ports to build green manufacturing hubs around them.

“With the new wind turbine production plant in the UK we’re pushing ahead with our strategy of investments in attractive growth markets for eco-friendly technology. In the foreseeable future the wind power market in the UK will be characterised by major offshore projects, and we’ll extend our market leadership with the new production plant,” said Peter Löscher, President and CEO of Siemens AG.

Andreas J. Goss, Siemens’ chief executive in the UK, said: “The UK government has created a stable framework to attract inward investment in renewables and offshore wind power in particular. The competition for land development, announced in the Budget last week, gives us confidence that the appropriate UK port infrastructure can be made available to support our production plans.”

The Siemens facility is expected to create 700 direct jobs and perhaps as many as 1,500 more in the supply chain. The plans come only a few days after GE announced a similar initiative in Britain, with investment of £100m, creating 2,000 jobs. Mitsubishi of Japan and Clipper Windpower have also announced schemes to make bigger and better blades that could bring down the cost of producing wind offshore.

Siemens is currently exploring a number of sites on the East Coast and in the North East and will make its decision about the exact location when the competition process for land development is complete. The company is working closely with the Regional Development Agencies and its partners to find the optimum site.

Big utilities such as E.ON and RWE have already won acreage under the Round Three (R3) licensing scheme to develop wind farms many miles off the coast of Britain. But some have warned that the economics remain fragile, given the deep water levels and other factors involved, unless development costs can be driven down.

Commenting on the announcement from Siemens Frost & Sullivan’s Wind Energy Industry Analyst Gouri Kumar said, “A combination of factors such as the UK government’s efforts to attract these companies to set up plants in the UK, the support to the offshore wind industry in the recent UK budget as well as the announcement of Round Three offshore wind project leasing, has sent the right signals to the market about how serious the UK is about developing the offshore wind market.

“The string of announcements from Clipper Windpower a few months ago to Siemens today is conveying to the market that the UK is finally converting rhetoric to some action and is one step ahead in creating a much-needed supply chain in the UK. There is no doubt that the UK is going to be the centre of offshore wind development and therefore needs to bring jobs and investment to the country in order to support that development. The commitment to the sector from the government and industry participants need to continue.”

Tags: energy, renewables, saving

Councillors have approved an extension to a Stirlingshire wind farm despite the recommendation of planning experts to scrap the project.

Officials opposed the building of nine turbines at the wind farm near Fintry because it would have an adverse impact on the landscape.

There were also worries the view from Stirling Castle would be affected.

But 36 letters were received in support of the Falck Renewables scheme, which had considerable local backing.

Seven letters were sent objecting to the scheme.

A spokeswoman for Stirling Council said: “The panel took the decision to grant the application. They went against officers recommendations for refusal.”

The new turbines will be constructed to the north-west of the existing Earlsburn wind farm.

Charles Williams, from Falck Renewables, said the extension would deliver “real economic, social and environmental benefits” to people living nearby.

Climate change targets

He said local communities would share £1,000 per annum, plus income generated from the community turbine.

He added: “Construction is expected to commence in 2011 and take approximately nine months to complete.”

Stirling MSP Bruce Crawford said he welcomed the decision to go ahead with the wind farm.

The SNP politician said: “I am a keen supporter of such projects when they are situated in appropriate locations.

“This will make a significant contribution to the development of renewable energy and meeting ambitious climate change targets.

“It will also mean that nearby communities will benefit directly through additional investment as a result of this project.”

Tags: energy, energy-saving, renewables

The link between wholesale energy prices and the cost of our gas and electricity bills is more complicated than energy suppliers would have us believe, according to an investigation by energy experts for Which?

EDF was the only company to escape criticism from the housing body

In the past five years, gas and electricity prices have soared by 107% and 66% respectively, largely as a result of ‘market forces’ that are out of energy suppliers’ control – or so we’re told.
Wholesale energy prices

But Which? experts say it’s not simply a case of wholesale prices – the price energy companies pay for the energy they sell to us – going up and energy bills following suit.

Instead, energy suppliers get their energy in a variety of ways. Contracts with energy generators can range from months to several years, and energy is also bought ‘on the spot’ and delivered immediately. The dominant big six suppliers – British Gas, EDF, Eon, Npower, Scottish Power and Scottish & Southern – also generate some of the energy that they sell to consumers.

The Which? Switch energy company satisfaction survey can show you how your energy supplier has been rated for customer satisfaction and value for money.
Energy suppliers should be open

More than 80% of Which? members want energy suppliers to be open about how their bills are made up, especially the link between what consumers pay and what energy suppliers pay for the gas and electricity they sell to us.

But almost 90% also think it’s hard to work out if price changes are a fair reflection of the actual cost of energy – thanks to confusing jargon such as ‘volatile markets’, ‘increased market commodity costs’, ‘continued increases to input costs’, and ‘the soaring cost of raw materials’.
Fair price for energy

The Liberal Democrats recently weighed into the energy prices debate. Shadow energy and climate change secretary, Simon Hughes MP, called for energy bills to reflect fuel costs to ensure that ‘consumers are not ripped off again and again’.

Which? policy adviser Dr Fiona Cochrane said: ‘The low levels of trust and satisfaction shown by our survey of energy companies mean it’s important for us to have confidence that what energy suppliers ask us to pay is fair.’
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Tags: energy, energy-saving

Energy group Scottish Power saw a 7.9% hike in earnings last year despite losing more than 100,000 customers amid the recession, its parent group has revealed.

EDF was the only company to escape criticism from the housing body

Spanish owner Iberdrola said Scottish Power delivered underlying earnings of £1.29 billion in 2009, with the impact of the weak pound stripped out, accounting for 21% of the wider group earnings.

But it said UK electricity customer numbers fell 5.9% to 3.2 million and remained flat at two million for gas, while energy demand among cash-strapped households and businesses fell by 2.7% for electricity and 7.9% for gas.

News of its UK profits rise was slammed as “indefensible” by an energy consultancy, as wholesale prices have fallen sharply in the last year.

David Hunter, an analyst at McKinnon & Clarke, said: “Despite wholesale prices going into freefall, Scottish Power hasn’t cut domestic standard tariffs in almost a year. Failure of the ‘big six’ suppliers to pass on to customers the massive reductions in wholesale energy prices, which they have been enjoying since 2008, is scandalous.”

Annual results due on Thursday from Centrica are expected to show operating profits for its British Gas residential arm of £554 million, up from £379 million in 2008.

British Gas became the first of the major players to lower gas prices recently with a 7% cut for its eight million customers, but Scottish Power has not cut prices since last February, when it reduced average gas bills by 7.5% and electricity bills by 3%.

A spokesman for Scottish Power said profits in the UK were boosted by an 8% reduction in costs due to savings made across its IT operations. This offset a drop in demand from recession-hit customers, the group said.

It also reduced bad debts from customers in arrears by 12% last year as it encouraged customers to pay by secure payment, with 75% now on direct debit or pre-payment meter.

Earnings for the wider Iberdrola group rose 6.3% to 6.82 billion euros (£5.99 billion) in 2009. But the figures do not include results for January, which was one of the highest on record for energy usage due to the freezing weather.

Tags: energy, energy-saving

The jatropha plant can grow in soil not suitable for food crops Dave Harvey: Bristol or Borneo?

An application to build a controversial biofuel power station is being considered by councillors in Bristol.

Environmental groups oppose the plant, and the city’s council leader says it is likely to lead to rainforest destruction and food insecurity.

But council officials say there are no good grounds to block the proposal under existing planning law.

It is one of several plants around the UK under consideration; one in Weymouth has already been approved.

The firm applying to build the bio-liquids power plant, W4B, says it will power 25,000 homes.

It would be fuelled by 70,000 tonnes of vegetable oil a year, first perhaps with palm oil but later with jatropha oil.

Critics blame the growing demand for palm oil for rainforest destruction, and say jatropha oil displaces food crops and pushes up the price of food.

But a W4B spokesman told BBC West that they would ensure the fuel was obtained from sustainable sources.

The EU says, if used responsibly, biofuels can reduce carbon emissions and increase energy security.

In the UK, biofuel power stations attract government incentives in the form of Renewable Obligation Certificates (ROCs), provided the fuel meets EU sustainability rules.

A government spokesman outlined the sustainability criteria, which includes:

• Minimum greenhouse gas savings, compared to fossil fuels, of 35% initially, rising to 50% from 2017 for existing power stations and 60% from 2018 for new installations

• Restrictions on sourcing raw materials from areas that are rich in biodiversity or are considered to be important carbon sinks, such as primary forests

Opponents of biofuels say the criteria imposed by governments will be irrelevant because any crops grown for fuel will simply increase pressure on land around the world and – either directly or indirectly – impact on food or wildlife.

Tags: energy, energy-saving, renewables

Bank of America and Barclays Capital, two leading oil traders, have told clients to brace for crude above $100 (£64) a barrel by next year, before it pushes relentlessly higher over the decade. This is a stark contrast from recessions in the 1980s and 1990s, when it took years to work off excess drilling capacity built in the boom.

“Oil has the potential to flirt with $100 this year. We forecast an average price of $137 by 2015,” said Amrita Sen, an oil expert at BarCap. The price has doubled to $78 in the last year.

“The groundwork for the next sustained step up in oil prices is now almost complete. Global spare capacity is likely to be reduced to low levels within a relatively short time. The global economic crisis has postponed, but not cancelled, a crunch which would otherwise be starting to bite now,” said Barclays.

Francisco Blanch, from Bank of America Merrill Lynch, said crude may touch $105 next year, with $150 in sight by 2014. “Approximately 1.7bn consumers in emerging markets with a per capita income of $5,000 to $20,000 are eagerly waiting to buy cars, air-conditioning units, or white goods,” he said.

China has overtaken the US as the world’s top car market. Mr Blanch expects oil demand to rise by a further 2.8m barrels per day (bpd) in China and 2.5m bpd in India by 2015, when two giants will be absorbing the lion’s share of Gulf output. Consumption in the West has already peaked and will fall each year as populations shrink and we waste less, but the West no longer sets the price. Global use will increase by 8.8m bpd to 95m bpd.

Supply is scarce. Sir Richard Branson warned this month that the world faces ‘peak oil’ within five years. “Don’t let the oil crunch catch us out in the way that the credit crunch did,” he said.

Mr Blanch said output from non-OPEC states is falling by 4.9pc each year, despite Russia’s reserves. Saudi Arabia and the Emirates can plug a quarter of the gap, but global spare capacity must soon drop to wafer-thin levels – leaving us vulnerable to the sort of “super-spike” seen in 2008. The wildcard is whether Iraq can quadruple output to Saudi levels this decade, a target dismissed by most analysts as pie-in-the-sky.

Painfully high prices are needed to unlock fresh supplies as reserves are depleted in the North Sea and the Gulf of Mexico. Deep-water rigs off Brazil are costly and require drilling far below the seabed. Canadian oil sands and US biofuels have break-even costs near $70. While the US, UK, and the Far East are turning to nuclear power, it takes a decade to build reactors. “peak uranium” lurks in any case.

The oil spike brought the global economy to a shuddering halt in 2008. This time the crunch may hit before the West has fully recovered. Whatever happens, the US, Europe and Japan will soon transfer a chunk of their wealth to the petro-powers. It is a new world order.

Tags: energy, RED alert!

An expert has called for the government’s boiler scrappage scheme to be expanded so more people will be able to benefit from cheap energy.

Gordon Miller, founder of eco homes and sustainable residential development website Whatgreenhome.com, said the speed at which the scheme’s money-saving vouchers have been snapped up highlights its popularity.

He pointed out that this shows there is a demand in eco-friendly home improvement schemes and the initiative needs to be widened to meet this growing demand.

Mr Miller suggested that the scheme should be open to a wider range of boilers, not just G-rated ones.

“Why isn’t the government rolling this out to include boilers that aren’t just G-rated?” he said.

“It is now an equation for the government to do; how much it is going to cost them versus how much saving they are going to make.”

Earlier this week, the government announced that since January, 54,758 vouchers (nearly half) have been taken as part of the boiler scrappage scheme.oiler scrappage scheme.

Tags: energy, energy-saving

British Airways has struck a deal to build the first plant in Europe to produce jet fuel from waste matter.

Some 500,000 tonnes of waste will be used by the UK facility each year to produce 16 million gallons of fuel.

Construction of the plant in east London will start within two years. It is set to produce fuel from 2014, creating up to 1,200 jobs.

BA said the plant would produce twice the amount of fuel needed to power all its flights from London City Airport.

It would only account for about 2% of flights from Heathrow, however.

Greenhouse gas

BA argues the plant will cut the amount of waste that is sent to landfill, reducing the amount of methane that is produced.

Methane is thought to be a more potent greenhouse gas than carbon dioxide.

The plant will be built by a US company Solena Group, with BA committing to buy all of its output.

It will be another four years before it starts producing fuel, and it is unlikely to work at full capacity straight away.

The ideal source material for the plant is waste matter that has a high carbon content.

Biofuel creation

The waste is fed into a high temperature “gasifier” to produce BioSynGas.

A chemical process called Fischer Tropsch is then used to convert the gas into biofuel.

Waste products from the process can be used to power the plant as well as supply 20MW of electricity to the national grid.

A solid waste product can be used as an aggregate in construction.

The fuel produced by the plant is certified for use in other countries, but not currently in the UK.

BA says it is confident of getting the certification by the time the plant starts producing fuel, either for use in a blend with traditional kerosene or on its own.

Tags: energy, energy-saving, renewables

1:59pm UK, Wednesday February 03, 2010

Ed Merrison, Sky News Online

British consumers could face unaffordable bills if radical plans are not put in place to safeguard power supplies, the energy watchdog has warned.

Ofgem wants the Government to take greater control to ensure future supply

Ofgem, which has warned bills could soar by as much as 25% over the next decade, said the UK risks running short of gas and electricity by 2015.

In a wide-ranging report, it said doubt over the security and sustainability of the country’s energy supplies meant sticking with current policy was “no longer an option”.

The regulator put forward a range of suggestions to help release the estimated £200bn Britain may need to invest by 2020 in order to ensure future supply.

The most far-reaching of its plans would be to create a central energy buyer that would set the amount and type of new power generation needed.

Bills threaten to become unaffordable

Ofgem said the depth and urgency of UK’s energy problems stemmed from a perfect storm of financial crisis, environmental targets, dependency on imported gas and the closure of ageing power stations.

It outlined the challenges to Britain’s energy markets in October, when it warned that average household gas and electricity bills could reach nearly £2,000 a year without drastic action.

Its latest document, which follows a consultation period, warns the country may only have relative power security until 2015 and that an increasing number of consumers would not be able to afford enough energy.

Energy and Climate Change Secretary Ed Miliband said the Government was “confident” of meeting energy supply needs in the years ahead but agreed that a “more interventionist energy policy” was needed in the longer term.

“The scale and upfront nature of the low-carbon investment needed is likely to require significant reform of our market arrangements to deliver security of supply in the most affordable way,” he added.

The CBI business group welcomed the report, saying it gave a “stark warning” that existing policy would not provide the energy mix needed to provide power security, cut carbon emissions and maintain competitive prices.

But CBI deputy director-general John Cridland warned that, with massive private-sector investment needed to solve problems, the market place needed to remain attractive to investors.

“Future policy must take into account the benefits of a competitive market and also the need to give some certainty to investors who will be required to pay for new energy sources,” he said.

Tags: energy, energy-saving, RED alert!, saving

The UK could face power shortages in the years ahead, according to the energy regulator, Ofgem.

The regulator also warns that a significant number of consumers may not be able to afford the higher energy prices they will have to face.

Ofgem says there is “reasonable doubt” about whether the UK’s energy market will be able to deliver sustainable supplies in the coming decade.

The industry needs £200bn of investment, Ofgem said.

Faced with unprecedented challenges we’re looking at new solutions to protect security of supply Alistair Buchanan, Ofgem chief executive

However, Ofgem believes energy companies may need stronger incentives before committing that level of funds.

In its report, Ofgem says the UK’s open competitive energy market could fail to deliver secure, sustainable supplies in the coming decade.

Chief executive Alistair Buchanan told BBC News: “Faced with the unprecedented challenge of carbon prices, the unprecedented challenge of the credit crunch and the unprecedented challenge of maintaining international supplies, we’re looking at new solutions to protect security of supply.”

Among its range of solutions Ofgem suggests that companies should be required to deliver more generation capacity and gas storage.

It also suggests that the industry should revert to a form of centralised market control, which if adopted, would amount to the biggest shake up in the industry since privatisation.

Tags: energy, energy-saving, RED alert!, renewables