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.”

Engineers have been installing a new protection system for the LHC’s magnets

The organisation that operates the Large Hadron Collider has set a date for the start of its science programme.

On Tuesday 30 March, engineers at Cern will make their first attempt to collide beams at an energy of 3.5 trillion electronvolts (TeV) per beam.

The LHC reached this beam energy last week, breaking its own particle beam energy record.

But, among other things, engineers will need to ensure the beams are stable at 3.5 TeV before trying for collisions.

The LHC will search for the elusive Higgs boson, dubbed the “God particle” because of its importance to our understanding of physics.

Getting beams circulating is one thing. Having them circulate for a reasonable lifetime is another James Gillies Director of communications, Cern

“Symbolically, the start of the LHC research programme is when we start systematically colliding beams for physics at the energy we have chosen for this year,” Cern’s director of communications Dr James Gillies, told BBC News.

“That’s what we’re hoping for a week today.”

Steve Myers, director for accelerators and technology at Cern, explained: “With two beams at 3.5 TeV, we’re on the verge of launching the LHC physics programme.

“But we’ve still got a lot of work to do before collisions. Just lining the beams up is a challenge in itself. It’s a bit like firing needles across the Atlantic and getting them to collide half way.”

‘Golden orbit’

The experiment, housed in a 27km-long tunnel under the Franco-Swiss border near Geneva in Switzerland, has only been back online since November 2009.

WHAT IS AN ELECTRON VOLT? Charged particles tend to speed up in an electric field, defined as an electric potential – or voltage – spread over a distance One electron volt (eV) is the energy gained by a single electron as it accelerates through a potential of one volt It is a convenient unit of measure for particle accelerators, which speed particles up through much higher electric potentials The first accelerators only created bunches of particles with an energy of about a million eV (MeV) The LHC can reach beam energies a million times higher: up to several teraelectronvolts (TeV) This is still only the energy in the motion of a flying mosquito But that energy is packed into a comparatively few particles, travelling at more than 99.99% the speed of light

A magnet fault caused one tonne of liquid helium to leak into the tunnel in 2008, shortly after the machine was first switched on, requiring a programme of repairs that lasted 14 months.

Between now and 30 March, the LHC’s team will be working to commission the beam control systems and the systems that protect the machine’s detectors, or experiments, from stray particles.

All these systems must be fully commissioned before collisions at 3.5 TeV can begin, Cern says.

“Getting beams circulating is one thing. Having them circulate for a reasonable lifetime is another. Having a ‘golden orbit’ – where the beams complete lap after lap after lap for hours – is important,” Dr Gillies said.

“All of these things you have to do before the machine operators can say: ‘the beams are now stable, you can switch on the detectors.”

The LHC is being used to smash together beams of proton particles in a bid to shed light on the nature of the Universe.

Some 1,200 superconducting magnets bend proton beams in opposite directions around the tunnel at close to the speed of light.

At allotted points around the tunnel, the proton beams cross paths, allowing particles to smash into one another.

Detectors located at the crossing points will scour the wreckage of these collisions for discoveries that extend our knowledge of physics.

Paul.Rincon-INTERNET@bbc.co.uk

The incident at Whitelee wind farm happened on Friday

An investigation is under way at Europe’s largest onshore wind farm in East Renfrewshire after a 150ft blade snapped off a turbine.

The incident, at about 0200 GMT on Friday, led to Whitelee wind farm, near Eaglesham, being temporarily shut down.

ScottishPower Renewables, which runs the site, said the cause was unknown but mechanical failure and a lightning strike were being considered.

A safety check on all 140 turbines should be completed by Friday.

The damaged turbine was automatically shut down after sensors alerted the wind farm’s 24-hour control room to the problem.

All turbines at the site were then taken offline while engineers began an inspection.

‘Highly unusual’

By Tuesday morning 65 turbines had been inspected and returned to operation.

A full inspection of the wind farm is expected to be completed by 26 March.

Keith Anderson, managing director of ScottishPower Renewables, said: “This type of incident is exceptionally rare and highly unusual.

“However, the safety of our people and the public is our first priority.

“While the investigation into the cause of the incident is ongoing our engineers continue to conduct an internal and external examination of all turbine blades at the wind farm.”

The Whitelee wind farm currently has 140 turbines. Approval has been granted for a further 39 turbines.

The wind turbines, which are built by Siemens, are about 360ft high.

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.”

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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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.

The SSV Corwith Cramer is involved in the plastics research

Scientists have discovered an area of the North Atlantic Ocean where plastic debris accumulates.

The region is said to compare with the well-documented “great Pacific garbage patch”.

Karen Lavender Law of the Sea Education Association told the BBC that the issue of plastics had been “largely ignored” in the Atlantic.

She announced the findings of a two-decade-long study at the Ocean Sciences Meeting in Portland, US.

The work is the conclusion of the longest and most extensive record of plastic marine debris in any ocean basin.

Scientists and students from the SEA collected plastic and marine debris in fine mesh nets that were towed behind a research vessel.

We know that many marine organisms are consuming these plastics and we know this has a bad effect on seabirds in particular Dr Karen Lavender Law, Sea Education Association

The nets dragged along were half-in and half-out of the water, picking up debris and small marine organisms from the sea surface.

The researchers carried out 6,100 tows in areas of the Caribbean and the North Atlantic – off the coast of the US. More than half of these expeditions revealed floating pieces of plastic on the water surface.

These were pieces of low-density plastic that are used to make many consumer products, including plastic bags.

Dr Lavender Law said that the pieces of plastic she and her team picked up in the nets were generally very small – up to 1cm across.

“We found a region fairly far north in the Atlantic Ocean where this debris appears to be concentrated and remains over long periods of time,” she explained.

“More than 80% of the plastic pieces we collected in the tows were found between 22 and 38 degrees north. So we have a latitude for [where this] rubbish seems to accumulate,” she said.

The maximum “plastic density” was 200,000 pieces of debris per square kilometre.

“That’s a maximum that is comparable with the Great Pacific Garbage Patch,” said Dr Lavender Law.

But she pointed out that there was not yet a clear estimate of the size of the patches in either the Pacific or the Atlantic.

“You can think of it in a similar way [to the Pacific Garbage Patch], but I think the word ‘patch’ can be misleading. This is widely dispersed and it’s small pieces of plastic,” she said.

The impacts on the marine environment of the plastics were still unknown, added the researcher.

“But we know that many marine organisms are consuming these plastics and we know this has a bad effect on seabirds in particular,” she told BBC News.

Nets are dragged half-in and half-out of the water

Nikolai Maximenko from University of Hawaii, who was not involved in the study, said that it was very important to continue the research to find out the impacts of plastic on the marine ecosystem.

He told BBC News: “We don’t know how much is consumed by living organisms; we don’t have enough data.

“I think this is a big target for the next decade – a global network to observe plastics in the ocean.”

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.

Anticipation of a big oil find off the coast of the Falkland Islands is once again reaching fever pitch.

The Ocean Guardian rig will explore reserves in the Falklands

A drilling rig from the Scottish Highlands, the Ocean Guardian, is being towed by tug to the North Falkland Basin, widely considered the most promising of the four areas licensed for exploration.

In the UK, investment tipsters are lining up to recommend buying shares in the companies that own those licences.

Strangely enough, though, those shares are not enjoying any notable bounce at present – probably because of the reaction from Buenos Aires.

The Argentine government has imposed new restrictions on all ships heading to the Falklands, in a move that revives memories of the war it fought with Britain over the islands in 1982.

Argentina is clearly furious at the prospect of being excluded from an oil boom in a territory over which it still claims sovereignty.

After trying to raid the central bank’s reserves to service its debts, President Cristina Fernandez de Kirchner’s cash-strapped government is desperate for funding.

For their part, some of the key oil explorers are keeping tight-lipped as they wait to see what the diplomatic fallout will be.

Desire Petroleum, one of the firms that has contracted the Ocean Guardian rig, told the BBC it would be making no comment until the start of drilling next week and referred all inquiries to the British Foreign Office.

Reliable sources?

But at this stage, any Falklands oil boom remains strictly hypothetical. After all, no-one has yet proved that any commercially viable oil field exists there.

Not that you would know that from the oil explorers themselves. Desire Petroleum’s website talks of “excellent oil source rock” and “significant gas potential” in the six licence areas it holds.

The only previous drilling off the Falklands was in 1998

It estimates a “potential” – that word again – 3.5 billion barrels of oil and nine trillion cubic feet of natural gas down there, ready to be extracted.

Desire is also co-operating with another firm, Rockhopper Exploration, which has “farmed in” to two of Desire’s licences while operating four more of its own, all in the North Falkland Basin. Both firms plan to drill a number of wells using the Ocean Guardian.

Rockhopper reckons that 4.3 billion barrels of oil lie in its licence areas, two of which were previously held by Royal Dutch Shell.

Four other firms are in the game, including Falkland Oil and Gas (FOG), which has brought in mining giant BHP Billiton as a partner.

FOG believes its top four prospects alone could yield eight billion barrels, with tens of billions more lurking elsewhere in its licence areas.

It, too, plans to use the Ocean Guardian rig to drill what will be the first well in the East Falklands Basin, also known as the Falklands Plateau.

Second time round

You might be thinking that this is beginning to amount to an awful lot of oil – or potential oil, at least.

You might also be wondering why Shell decided to pull out of such a lucrative earner.

Well, the answer goes back to the only previous attempt to drill for oil in the area, back in 1998.

Six test wells were drilled in the North Falkland Basin, and five of them showed encouraging results. However, it was not clear whether there was enough oil there to make further investment worthwhile and Shell decided to call a halt.

However, there is one big difference between then and now. In 1998, oil prices fell to little more than $10 a barrel. Nowadays, they are above $75 a barrel.

That means there is plenty of oil still in the ground worldwide that would have been too expensive to extract in 1998, but is perfectly profitable now.

That is certainly the case for much of the oil that might be found in the Falklands’ territorial waters, since many of the potential locations are deep under the sea and hard to reach.

In the North Falkland Basin, the waters are relatively shallow, giving a drilling depth of 1,500ft (500m) or less.

But in the eastern and southern basins, the drilling depths are likely to be up to 9,000ft.

This is not as deep as Brazil’s big discovery of recent years, the Tupi oil field off the coast of Rio de Janeiro.

But Brazil’s state oil firm Petrobras has hard-won experience of deep-sea oil drilling over decades, whereas Falkland Oil and Gas was not formed until 2004.

Sovereignty stand-off

An oil bonanza would clearly make a big difference to the lives of the 3,000-odd inhabitants of the Falklands, whose livelihood currently depends on fishing licences, cruise ship visits and sheep-farming.

But the Argentine government is also acutely aware of what a difference those oil revenues could make to its finances.

Brazil is using semi-submersible platforms to pursue deep-water oil

Argentina has $13bn of international debt that matures this year, and a hole in its budget of between $2bn and $7bn.

However, it was Argentina that unilaterally decided in 2007 to scrap an agreement with the UK to share the proceeds of any oil discoveries in Falklands waters.

The decision was taken by the government of Nestor Kirchner, the predecessor and husband of the current president.

Under the Kirchners, Argentina has increased pressure on the UK to reopen talks on the sovereignty of the islands.

It’s a far cry from the 1990s, when the foreign minister of the time, the late Guido di Tella, launched a charm offensive aimed at winning over the hearts and minds of the islanders.

This included sending annual Christmas cards to every household, accompanied by presents such as video cassettes featuring children’s character Pingu and books including the adventures of Winnie the Pooh.

Now, however, the gloves are off again – and diplomatic strife plus the lure of financial gain could prove to be a potent combination.

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.