Venture capitalists flirt with solar thermal, algae, and wave power
By Katy Marquardt
Posted July 25, 2008
Now that alternative energy is the new darling of Silicon Valley, investors are pumping cash into a raft of obscure technologies, from wave power to algae fuel. Despite the sluggish economy, alternative-energy start-ups received a record $2 billion in venture capital funding in the second quarter of 2008, a 58 percent increase from a year earlier, according to Cleantech Group, a market research firm. Today, clean technology—which includes alternative energy producers—accounts for 20 percent of all venture capital funding, up from just 1 percent in 2001, says John Balbach, a Cleantech managing partner. "Silicon Valley is going through yet another transformation," he says. Here are three technologies attracting interest:
Solar thermal. Think of solar thermal as the "other" solar power. Unlike photovoltaic cells, which convert sunlight directly into energy, this technology—also called concentrated solar power—uses mirrors to focus the sun's rays on a liquid that turns to steam and powers a turbine. This relatively simple process holds major advantages over silicon cells, which produce energy only when the sun is shining. Using molten salt and other materials, solar-thermal plants can store energy for several hours after sundown. Plants can also burn other fuels, such as natural gas, when it's dark or cloudy. In the Mojave Desert, FPL Group operates the world's largest concentrated solar generation station, which was built more than 20 years ago. Driven by state mandates requiring utilities to produce a portion of electricity from renewable sources, a new generation of solar-thermal plants is on the way. In the second quarter, solar-thermal companies raised a record $371 million in financing, according to Cleantech. Mainstream adoption of solar thermal may not be far off: Cambridge, Mass., consultant Emerging Energy Research calls it "the fastest-growing, utility-scale renewable energy alternative after wind power" and estimates that $20 billion will be spent on projects through 2013.
Pond scum power. The hunt is on for renewable fuels that won't compete with food crops. A promising contender is algae, which are rich in oil and can double their mass several times a day. These curious organisms are capable of producing 30 to 100 times as much oil per acre as traditional feedstocks. Algae could generate more oil in an area the size of a two-car garage than could a football field of soybeans, according to Fort Collins, Colo., start-up Solix Biofuels. And algae can grow almost anywhere, including in waste water and on land unsuitable for conventional agriculture.
How about algae-powered jets? Airbus and Honeywell recently announced that they're developing a jet fuel using vegetation- and algae-based oils that could power a third of commercial aircraft by 2030. Other heavyweights, including Boeing, Virgin Atlantic, Chevron, and Royal Dutch Shell, are exploring algae's potential. The key challenge, says Ed Guinness of the Guinness Atkinson Alternative Energy fund, is slashing the cost of production. "You've got to grow it at a low enough cost so that you can take advantage of the high yield," he says. He says it will probably be eight to 10 years before algae go commercial.
Ocean energy. The challenge of harnessing energy from heaving waves and fast-flowing tides is daunting: Severe weather, crushing currents, and the corrosive power of salt water can all do a number on equipment. But entrepreneurs are planning dozens of tidal- and wave-energy projects, from turbines anchored in Florida's Gulf Stream to a wave farm off the coast of Portugal. Methods for capturing the kinetic energy of tides include placing turbines in dams and tethering them to the seabed. Researchers at Florida Atlantic University believe tapping power from the Gulf Stream could someday supply a third of that state's energy.
Wave-power generation, which captures the sea's energy using buoys and other floating devices, is also attracting interest. This year, the world's first commercial wave farm is set to launch off the coast of Portugal. Projects are also in the works for Oregon, Washington, and California. But Frank Bevc, head of the emerging technology group at Siemens, estimates that large-scale adoption of wave-power technology is more than a decade away.
Tuesday, 5 August 2008
Renewable Energy Holdings hoping to build CETO wave farms in Bermuda
Tuesday, August 05, 2008
Renewable Energy Holdings has entered into a Memorandum of Understanding with Triton Renewable Energy Limited, based in Bermuda to negotiate and agree the terms of a joint venture to build and operate wave farms in Bermuda using Renewable Energy Holdings proprietary CETO wave power technology.An initial test site of 2MW will be developed and subsequently a grid connected 20MW installation. It is intended that Triton provides services to facilitate the development of the wave farms and Renewable Energy Holdings grants the rights to use its CETO technology and provides engineering support during the construction and on-going operation of the wave farms. Negotiations are expected to be concluded by the end of 2008.CETO technology distinguishes itself from other wave energy devices by resting out of sight on the ocean floor and generating electricity on-shore. An array of submerged buoys is tethered to seabed pump units. The buoys move in harmony with the motion of the passing waves, driving the pumps which in turn deliver sea water at pressure ashore via a pipeline. The high-pressure seawater can then be used to drive hydro turbines, generating zero-emission electricity. In addition, the high pressure sea water can be used to supply a reverse osmosis desalination plant, replacing greenhouse gas emitting pumps usually required for such plants.Mike Proffitt, Chief Executive Officer of REH, commented: 'It is currently very expensive to generate electricity in an island environment, due to the high cost of imported fuel oil. CETO provides an economic and clean solution to this problem. Bermuda has an excellent wave regime and there are several sites which we believe would be suitable for a CETO wave farm. There is also the added advantage of being able to provide desalinated water with the CETO technology, which is another benefit of deploying our technology on islands.'
Renewable Energy Holdings has entered into a Memorandum of Understanding with Triton Renewable Energy Limited, based in Bermuda to negotiate and agree the terms of a joint venture to build and operate wave farms in Bermuda using Renewable Energy Holdings proprietary CETO wave power technology.An initial test site of 2MW will be developed and subsequently a grid connected 20MW installation. It is intended that Triton provides services to facilitate the development of the wave farms and Renewable Energy Holdings grants the rights to use its CETO technology and provides engineering support during the construction and on-going operation of the wave farms. Negotiations are expected to be concluded by the end of 2008.CETO technology distinguishes itself from other wave energy devices by resting out of sight on the ocean floor and generating electricity on-shore. An array of submerged buoys is tethered to seabed pump units. The buoys move in harmony with the motion of the passing waves, driving the pumps which in turn deliver sea water at pressure ashore via a pipeline. The high-pressure seawater can then be used to drive hydro turbines, generating zero-emission electricity. In addition, the high pressure sea water can be used to supply a reverse osmosis desalination plant, replacing greenhouse gas emitting pumps usually required for such plants.Mike Proffitt, Chief Executive Officer of REH, commented: 'It is currently very expensive to generate electricity in an island environment, due to the high cost of imported fuel oil. CETO provides an economic and clean solution to this problem. Bermuda has an excellent wave regime and there are several sites which we believe would be suitable for a CETO wave farm. There is also the added advantage of being able to provide desalinated water with the CETO technology, which is another benefit of deploying our technology on islands.'
Motorists could be paid £1,000 to scrap gas guzzlers
By Robert Winnett, Deputy Political Editor
Last Updated: 4:01pm BST 04/08/2008
Motorists may be paid up to £1,000 to scrap older, more polluting vehicles under plans being considered by the Treasury.
Ministers believe that the scheme may be useful in helping reduce global warming by subsidising drivers who switch to greener vehicles.
The Treasury is considering the incentive payments and is studying a similar scheme introduced in France earlier this year
They are studying schemes launched in other countries which either pay motorists cash for scrapping gas guzzlers or offer them generous discounts for more fuel efficient vehicles.Some countries also offer free or subsidised public transport to those surrendering older vehicles, which tend to be far less fuel efficient than newer models.
The Government is currently facing a backlash over plans to sharply increase vehicle excise duty for people owning cars bought between 2001 and 2006.
More than one million people will see their road tax double and offering people money to switch vehicles may help to quell growing anger among motorists.
The Telegraph has been running a campaign called Fair deal for car drivers as the credit crisis and plans for green taxes have seen motorists face huge increases in the cost of motoring.
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Now the Treasury is studying a scheme introduced in France earlier this year.
Angela Eagle, a Treasury minister said: "It is certainly something that we would not be averse to looking at.
"The French have introduced a scheme. It is quite new at the moment and we are obviously watching it quite carefully."
A Treasury aide added that although no policies were yet "on the table" the scheme was being "looked at closely".
The car scrapping scheme has been backed by a committee of MPs who have studied the impact of the proposed changes to vehicle excise duty.
The Environmental Audit committee criticised the proposed road tax changes but recommended that the Treasury "urgently examines the proposal for a 'car scrappage scheme'".
However, it added: "In any scheme that were implemented, it would be important to ensure that high emission vehicles were genuinely scrapped - with as much of their materials recycled as possible - rather than allowed to stay on the road under different ownership, for instance in another country."
Tony Bosworth of Friends of the Earth said: "We’re delighted that the Committee have urged the Treasury to consider our suggestion of a car scrappage scheme.
"Three times more second hand cars are bought each year than new ones - so upping VED on old polluting vehicles will encourage people to choose greener models, cut fuel bills and lower carbon dioxide emissions.
"Paying people to scrap their old gas-guzzler and replace it with a cleaner car will make this cheaper and easier to do."
In Texas, motorists can receive vouchers worth more than £1,750 towards a hybrid car if abandoning a polluting vehicle.
From next year, Canadians will get £150 or subsidised bicycles or public transport. Similar schemes are also being trialled in Italy and New Zealand.
Last Updated: 4:01pm BST 04/08/2008
Motorists may be paid up to £1,000 to scrap older, more polluting vehicles under plans being considered by the Treasury.
Ministers believe that the scheme may be useful in helping reduce global warming by subsidising drivers who switch to greener vehicles.
The Treasury is considering the incentive payments and is studying a similar scheme introduced in France earlier this year
They are studying schemes launched in other countries which either pay motorists cash for scrapping gas guzzlers or offer them generous discounts for more fuel efficient vehicles.Some countries also offer free or subsidised public transport to those surrendering older vehicles, which tend to be far less fuel efficient than newer models.
The Government is currently facing a backlash over plans to sharply increase vehicle excise duty for people owning cars bought between 2001 and 2006.
More than one million people will see their road tax double and offering people money to switch vehicles may help to quell growing anger among motorists.
The Telegraph has been running a campaign called Fair deal for car drivers as the credit crisis and plans for green taxes have seen motorists face huge increases in the cost of motoring.
advertisement
Now the Treasury is studying a scheme introduced in France earlier this year.
Angela Eagle, a Treasury minister said: "It is certainly something that we would not be averse to looking at.
"The French have introduced a scheme. It is quite new at the moment and we are obviously watching it quite carefully."
A Treasury aide added that although no policies were yet "on the table" the scheme was being "looked at closely".
The car scrapping scheme has been backed by a committee of MPs who have studied the impact of the proposed changes to vehicle excise duty.
The Environmental Audit committee criticised the proposed road tax changes but recommended that the Treasury "urgently examines the proposal for a 'car scrappage scheme'".
However, it added: "In any scheme that were implemented, it would be important to ensure that high emission vehicles were genuinely scrapped - with as much of their materials recycled as possible - rather than allowed to stay on the road under different ownership, for instance in another country."
Tony Bosworth of Friends of the Earth said: "We’re delighted that the Committee have urged the Treasury to consider our suggestion of a car scrappage scheme.
"Three times more second hand cars are bought each year than new ones - so upping VED on old polluting vehicles will encourage people to choose greener models, cut fuel bills and lower carbon dioxide emissions.
"Paying people to scrap their old gas-guzzler and replace it with a cleaner car will make this cheaper and easier to do."
In Texas, motorists can receive vouchers worth more than £1,750 towards a hybrid car if abandoning a polluting vehicle.
From next year, Canadians will get £150 or subsidised bicycles or public transport. Similar schemes are also being trialled in Italy and New Zealand.
How quest for zero waste community means sorting the rubbish 34 ways
Japanese village's strict recycling regime looks to a future free of incinerators and landfill
Justin McCurry in Kamikatsu
The Guardian,
Tuesday August 5 2008
The inhabitants of Kamikatsi intend to do away with incineraors by 2020, to become Japan's first zero-waste community. Photograph: Robert Gilhooly
It was not that long ago that life in Kamikatsu revolved around the state of the rice crop and the number of tourists arriving to soak in the restorative waters of the local hot spring. Now the tiny village, in the densely wooded mountains of Shikoku island in south-west Japan, has a new obsession: rubbish.
Since 2003 Kamikatsu's 2,000 residents have been part of a so far unheralded ecological experiment that, if successful, could force bin men across the country to look for new jobs.
Urban Japanese householders, who balk at having to divide rubbish into flammable and inflammable items, bottles and cans, should spare a thought for their counterparts in Kamikatsu.
Here, household waste must be separated into no fewer than 34 categories before being taken to a recycling centre where volunteers administer firm, but polite, reprimands to anyone who forgets to remove the lid from a plastic bottle or rinse out an empty beer can.
At stake is Kamikatsu's quest to end its dependence on incineration and landfill by 2020 and claim the title of Japan's first zero waste community.
An hour's drive from the nearest city and 370 miles from Tokyo, the village was forced to change the way it managed its waste in 2000, when strict new regulations on dioxin emissions forced it to shut down its two incinerators.
"We were no longer able to burn our rubbish, so we thought the best policy was not to produce any in the first place," said Sonoe Fujii of the village's Zero Waste Academy, a non-profit organisation that oversees the scheme.
Despite initial opposition, the zero waste declaration, passed by the village assembly in 2003, has spawned an unlikely army of ecowarriors.
When Kikue Nii is not tending her impressive allotment or catching fish from the river at the bottom of her garden, she is up to her elbows in garbage.
"At first it was very hard work," said the 65-year-old, as she emptied another bowl of vegetable peelings into the electric garbage disposal unit next to her back door. In the corner of her garden, more kitchen waste sat in a conventional composter, waiting to help nurture a new supply of tomatoes and spring onions.
"I was working when the scheme started and found myself spending my lunch break dealing with our rubbish," she said. "It took ages to sort everything into different types. But it comes naturally now."
However, she draws the line at her husband's empty beer cans: "They are his responsibility," she said.
That Nii and her neighbours struggled in the early days of the zero waste campaign is understandable, given the daunting myriad of rules.
Glass bottles must be relieved of their caps and sorted by colour. Plastic bottles for soy sauce and cooking oil must be kept separate from Pet (polyethylene teraphthalate) bottles that once contained mineral water and green tea.
All bottles, cans and even plastic food wrappers must be washed thoroughly; newspapers and magazines have to be piled into neat bundles tied with a twine made from recycled milk cartons.
Any waste that is not composted is taken to the village's zero waste centre. Early one recent morning a trickle of cars turned into a deluge as residents arrived at the centre to drop off their rubbish on the way to work. The site can accommodate a dizzying array of items, from bottles, cans and newspapers to crockery, batteries, nappies, cigarette lighters, ballpoint pens and an improbably large number of broken mirrors.
Anything in good enough condition to be reused ends up at the Kuru Kuru recycling store, where residents are free to drop off or take home free of charge whatever they like, mostly clothes, crockery and ornaments.
All but a few categories of rubbish are recycled. Wooden chopsticks are pulped and made into paper, and cooking oil reappears in fertiliser.
But for other items, such as shoes, futons and carpets, the only option remains incineration. Glass and ceramic ware and light bulbs are buried in landfills, while batteries have to be shipped hundreds of miles to a recycling plant on the northern island of Hokkaido.
Critics point out that some of the composters use electricity and that most residents of Kamikatsu, spread out over an area that ranges from 100 metres to 800 metres above sea level, have no choice but to take their rubbish to the zero waste centre by car.
"We're still some way from reaching our zero waste goal, but the difference is amazing compared with a few years ago," said Yasuo Goto, a 75-year-old retired farmer who works part-time as a caretaker at the centre.
His optimism is supported by data showing that Kamikatsu's recycling rate has soared from 55% a decade ago to around 80% today. Five years after the scheme's inception 98% of the population uses home composters, which, with government subsidies, cost a modest 3,000 yen (£14) each.
"I can't say with absolute confidence that we will reach the target, but we're doing our best to make it happen," said Fujii.
To stand any chance of reaching its 2020 goal the greenest citizens still have a public relations battle to win.
Local reaction was mixed when the village first mooted the idea of spearheading Japan's zero waste movement. There were complaints that the regular cycle of sorting, washing and disposing of rubbish would prove too much for the village's ageing population.
A recent poll showed that 40% of residents were still unhappy about at least one aspect of the zero waste policy. "We still have opponents, particularly because almost everything has to be washed," Fujii said. "All we can do is talk to the doubters and explain why what they're doing is so important. I think consciousness is growing that this is a good thing; that it's not just the right thing to do, but the only thing to do."
Justin McCurry in Kamikatsu
The Guardian,
Tuesday August 5 2008
The inhabitants of Kamikatsi intend to do away with incineraors by 2020, to become Japan's first zero-waste community. Photograph: Robert Gilhooly
It was not that long ago that life in Kamikatsu revolved around the state of the rice crop and the number of tourists arriving to soak in the restorative waters of the local hot spring. Now the tiny village, in the densely wooded mountains of Shikoku island in south-west Japan, has a new obsession: rubbish.
Since 2003 Kamikatsu's 2,000 residents have been part of a so far unheralded ecological experiment that, if successful, could force bin men across the country to look for new jobs.
Urban Japanese householders, who balk at having to divide rubbish into flammable and inflammable items, bottles and cans, should spare a thought for their counterparts in Kamikatsu.
Here, household waste must be separated into no fewer than 34 categories before being taken to a recycling centre where volunteers administer firm, but polite, reprimands to anyone who forgets to remove the lid from a plastic bottle or rinse out an empty beer can.
At stake is Kamikatsu's quest to end its dependence on incineration and landfill by 2020 and claim the title of Japan's first zero waste community.
An hour's drive from the nearest city and 370 miles from Tokyo, the village was forced to change the way it managed its waste in 2000, when strict new regulations on dioxin emissions forced it to shut down its two incinerators.
"We were no longer able to burn our rubbish, so we thought the best policy was not to produce any in the first place," said Sonoe Fujii of the village's Zero Waste Academy, a non-profit organisation that oversees the scheme.
Despite initial opposition, the zero waste declaration, passed by the village assembly in 2003, has spawned an unlikely army of ecowarriors.
When Kikue Nii is not tending her impressive allotment or catching fish from the river at the bottom of her garden, she is up to her elbows in garbage.
"At first it was very hard work," said the 65-year-old, as she emptied another bowl of vegetable peelings into the electric garbage disposal unit next to her back door. In the corner of her garden, more kitchen waste sat in a conventional composter, waiting to help nurture a new supply of tomatoes and spring onions.
"I was working when the scheme started and found myself spending my lunch break dealing with our rubbish," she said. "It took ages to sort everything into different types. But it comes naturally now."
However, she draws the line at her husband's empty beer cans: "They are his responsibility," she said.
That Nii and her neighbours struggled in the early days of the zero waste campaign is understandable, given the daunting myriad of rules.
Glass bottles must be relieved of their caps and sorted by colour. Plastic bottles for soy sauce and cooking oil must be kept separate from Pet (polyethylene teraphthalate) bottles that once contained mineral water and green tea.
All bottles, cans and even plastic food wrappers must be washed thoroughly; newspapers and magazines have to be piled into neat bundles tied with a twine made from recycled milk cartons.
Any waste that is not composted is taken to the village's zero waste centre. Early one recent morning a trickle of cars turned into a deluge as residents arrived at the centre to drop off their rubbish on the way to work. The site can accommodate a dizzying array of items, from bottles, cans and newspapers to crockery, batteries, nappies, cigarette lighters, ballpoint pens and an improbably large number of broken mirrors.
Anything in good enough condition to be reused ends up at the Kuru Kuru recycling store, where residents are free to drop off or take home free of charge whatever they like, mostly clothes, crockery and ornaments.
All but a few categories of rubbish are recycled. Wooden chopsticks are pulped and made into paper, and cooking oil reappears in fertiliser.
But for other items, such as shoes, futons and carpets, the only option remains incineration. Glass and ceramic ware and light bulbs are buried in landfills, while batteries have to be shipped hundreds of miles to a recycling plant on the northern island of Hokkaido.
Critics point out that some of the composters use electricity and that most residents of Kamikatsu, spread out over an area that ranges from 100 metres to 800 metres above sea level, have no choice but to take their rubbish to the zero waste centre by car.
"We're still some way from reaching our zero waste goal, but the difference is amazing compared with a few years ago," said Yasuo Goto, a 75-year-old retired farmer who works part-time as a caretaker at the centre.
His optimism is supported by data showing that Kamikatsu's recycling rate has soared from 55% a decade ago to around 80% today. Five years after the scheme's inception 98% of the population uses home composters, which, with government subsidies, cost a modest 3,000 yen (£14) each.
"I can't say with absolute confidence that we will reach the target, but we're doing our best to make it happen," said Fujii.
To stand any chance of reaching its 2020 goal the greenest citizens still have a public relations battle to win.
Local reaction was mixed when the village first mooted the idea of spearheading Japan's zero waste movement. There were complaints that the regular cycle of sorting, washing and disposing of rubbish would prove too much for the village's ageing population.
A recent poll showed that 40% of residents were still unhappy about at least one aspect of the zero waste policy. "We still have opponents, particularly because almost everything has to be washed," Fujii said. "All we can do is talk to the doubters and explain why what they're doing is so important. I think consciousness is growing that this is a good thing; that it's not just the right thing to do, but the only thing to do."
The stakes could not be higher. Everything hinges on stopping coal
The climate camp must succeed. In the absence of political backbone, our only hope is an avalanche of public revulsion
George Monbiot
The Guardian,
Tuesday August 5 2008
As soon as I have finished this column I will jump on the train to Kent. Last year Al Gore remarked: "I can't understand why there aren't rings of young people blocking bulldozers and preventing them from constructing coal-fired power plants." Like hundreds of honorary young people, I am casting my Zimmer frame aside to answer the call.
Everything now hinges on stopping coal. Whether we prevent runaway climate change largely depends on whether we keep using the most carbon-intensive fossil fuel. Unless we either leave it - or the carbon dioxide it produces - in the ground, human development will start spiralling backwards. The more coal is burnt, the smaller are our chances of future comfort and prosperity. The industrial revolution has gone into reverse.
It is not because of polar bears that I will be joining the climate camp outside the coal plant at Kingsnorth. It is not because of butterflies or frogs or penguins or rainforests, much as I love them all. It is because everything I have fought for and that all campaigners for social justice have ever fought for - food, clean water, shelter, security - is jeopardised by climate change. Those who claim to identify a conflict between environmentalism and humanitarianism have either failed to read the science or have refused to understand it.
Our government could lead the world in one of two directions. Roughly one third of our power stations will come to the end of their lives by 2020. It could replace them with low-carbon plants or it could repeat - this time in full knowledge of the consequences - the disastrous decisions of the past. E.ON's application to build a new coal-burning power station at Kingsnorth is the first for many years. At least five other such proposals hang on the outcome. Between them they would account for 54 million tonnes of carbon emissions a year: as much as the entire economy would produce if the UK, in line with current science, were to cut its emissions by 90%.
The government seems determined to make the wrong decision. It has inherited the party's traditional love for coal, but, being New Labour, now supports the bosses instead of the workers, and has colluded with them to make the case for a new generation of power stations. It has one justification for this policy: that one day dirty coal will be transformed into clean coal by means of carbon capture and storage (CCS). All that is needed to effect this transformation is a sprinkling of alchemical dust, in the form of the future price of carbon. The market, it claims, will automatically ensure that coal plants bury their carbon dioxide, as this will be cheaper than buying pollution permits.
Last month the House of Commons environmental audit committee examined this proposition and found that it was nonsense. It cited studies by the UK Energy Research Centre and Climate Change Capital which estimate that capturing carbon from existing coal plants will cost €90-155 (£71-£122) per tonne of CO2. Yet the government predicts that the likely price of carbon between 2013 to 2020 will be around €39 (£31) per tonne. Even E.ON believes that it won't rise above €50. "The gap between the carbon price and the cost of CCS," the committee finds, "is enormous." The energy minister, Malcolm Wicks, confessed to MPs: "I hope that the strengthening of carbon markets ... will bring forward a sufficiently good price for carbon that it will provide some of the financial incentive for CCS. Will it be enough? I do not know."
This is the sum of government policy: to cross its fingers and hope the market delivers. If it approves a new coal plant at Kingsnorth, it will do so on the grounds that the power station will be "CCS-ready". CCS-ready seems to mean nothing more than this: that there is enough space on the site for a carbon capture plant, should the developer deign one day to build it. The committee warns that this meaningless promise could be used "as a fig leaf to give unabated coal-fired power stations an appearance of environmental acceptability".
The government has already shown us what it wants to do. In January, Gary Mohammed, a civil servant at the Department for Business, emailed E.ON to ask whether he should include CCS as a condition for approving its new coal plant. (This gives a fascinating insight into how government works: companies are asked to write their own rules.) E.ON replied that the government "has no right to withhold approval for a conventional plant". Six minutes later Mohammed answered thus: "Thanks. I won't include. Hope to get the set of draft conditions out today or tomorrow."
There is a simple means by which the government could ensure that our future electricity supplies would not commit the UK to stoking runaway climate change. It would do as California has done and set, by a certain date, a maximum level for carbon pollution per megawatt-hour of electricity production. This would have to be a low one: perhaps 80kg of CO2. Then, in line with the government's precious principles (or absence thereof), it could leave the rest to the market. I have now reached the point at which I no longer care whether or not the answer is nuclear. Let it happen - as long as its total emissions are taken into account, we know exactly how and where the waste is to be buried, how much this will cost and who will pay, and there is a legal guarantee that no civil nuclear materials will be used by the military. We can no longer afford any rigid principle but one: that the harm done to people living now and in the future must be minimised by the most effective means, whatever they might be.
But I believe the likely response would be more interesting than this. Several recent studies have shown how, through maximising the diversity of renewable generators and by spreading them as far apart as possible, by using new techniques for balancing demand with supply and clever schemes for storing energy, between 80% and 100% of our electricity could be produced by renewables, without any loss in the reliability of power supplies. Unlike CCS, wind, wave, tidal, solar, hydro and geothermal power are proven technologies. Unlike nuclear power, they can be safely decommissioned as soon as they become redundant.
A policy like this requires both courage and vision. So look at the current cabinet - Brown, Straw, Darling, Hutton, Blears, Kelly, Hoon - and weep. Every man and woman with backbone was purged from this government years ago, leaving those who know how to appease the interests that might threaten them. These people won't stand up to business, even when the future prospects of mankind are at stake.
If fear is the only thing that moves them, we must present them with a greater threat than the companies planning new coal plants. We must show that this issue has become a political flashpoint; that the public revulsion towards new coal could help to eject them from office. You could do no better than joining us at Kingsnorth this week.
monbiot.com
George Monbiot
The Guardian,
Tuesday August 5 2008
As soon as I have finished this column I will jump on the train to Kent. Last year Al Gore remarked: "I can't understand why there aren't rings of young people blocking bulldozers and preventing them from constructing coal-fired power plants." Like hundreds of honorary young people, I am casting my Zimmer frame aside to answer the call.
Everything now hinges on stopping coal. Whether we prevent runaway climate change largely depends on whether we keep using the most carbon-intensive fossil fuel. Unless we either leave it - or the carbon dioxide it produces - in the ground, human development will start spiralling backwards. The more coal is burnt, the smaller are our chances of future comfort and prosperity. The industrial revolution has gone into reverse.
It is not because of polar bears that I will be joining the climate camp outside the coal plant at Kingsnorth. It is not because of butterflies or frogs or penguins or rainforests, much as I love them all. It is because everything I have fought for and that all campaigners for social justice have ever fought for - food, clean water, shelter, security - is jeopardised by climate change. Those who claim to identify a conflict between environmentalism and humanitarianism have either failed to read the science or have refused to understand it.
Our government could lead the world in one of two directions. Roughly one third of our power stations will come to the end of their lives by 2020. It could replace them with low-carbon plants or it could repeat - this time in full knowledge of the consequences - the disastrous decisions of the past. E.ON's application to build a new coal-burning power station at Kingsnorth is the first for many years. At least five other such proposals hang on the outcome. Between them they would account for 54 million tonnes of carbon emissions a year: as much as the entire economy would produce if the UK, in line with current science, were to cut its emissions by 90%.
The government seems determined to make the wrong decision. It has inherited the party's traditional love for coal, but, being New Labour, now supports the bosses instead of the workers, and has colluded with them to make the case for a new generation of power stations. It has one justification for this policy: that one day dirty coal will be transformed into clean coal by means of carbon capture and storage (CCS). All that is needed to effect this transformation is a sprinkling of alchemical dust, in the form of the future price of carbon. The market, it claims, will automatically ensure that coal plants bury their carbon dioxide, as this will be cheaper than buying pollution permits.
Last month the House of Commons environmental audit committee examined this proposition and found that it was nonsense. It cited studies by the UK Energy Research Centre and Climate Change Capital which estimate that capturing carbon from existing coal plants will cost €90-155 (£71-£122) per tonne of CO2. Yet the government predicts that the likely price of carbon between 2013 to 2020 will be around €39 (£31) per tonne. Even E.ON believes that it won't rise above €50. "The gap between the carbon price and the cost of CCS," the committee finds, "is enormous." The energy minister, Malcolm Wicks, confessed to MPs: "I hope that the strengthening of carbon markets ... will bring forward a sufficiently good price for carbon that it will provide some of the financial incentive for CCS. Will it be enough? I do not know."
This is the sum of government policy: to cross its fingers and hope the market delivers. If it approves a new coal plant at Kingsnorth, it will do so on the grounds that the power station will be "CCS-ready". CCS-ready seems to mean nothing more than this: that there is enough space on the site for a carbon capture plant, should the developer deign one day to build it. The committee warns that this meaningless promise could be used "as a fig leaf to give unabated coal-fired power stations an appearance of environmental acceptability".
The government has already shown us what it wants to do. In January, Gary Mohammed, a civil servant at the Department for Business, emailed E.ON to ask whether he should include CCS as a condition for approving its new coal plant. (This gives a fascinating insight into how government works: companies are asked to write their own rules.) E.ON replied that the government "has no right to withhold approval for a conventional plant". Six minutes later Mohammed answered thus: "Thanks. I won't include. Hope to get the set of draft conditions out today or tomorrow."
There is a simple means by which the government could ensure that our future electricity supplies would not commit the UK to stoking runaway climate change. It would do as California has done and set, by a certain date, a maximum level for carbon pollution per megawatt-hour of electricity production. This would have to be a low one: perhaps 80kg of CO2. Then, in line with the government's precious principles (or absence thereof), it could leave the rest to the market. I have now reached the point at which I no longer care whether or not the answer is nuclear. Let it happen - as long as its total emissions are taken into account, we know exactly how and where the waste is to be buried, how much this will cost and who will pay, and there is a legal guarantee that no civil nuclear materials will be used by the military. We can no longer afford any rigid principle but one: that the harm done to people living now and in the future must be minimised by the most effective means, whatever they might be.
But I believe the likely response would be more interesting than this. Several recent studies have shown how, through maximising the diversity of renewable generators and by spreading them as far apart as possible, by using new techniques for balancing demand with supply and clever schemes for storing energy, between 80% and 100% of our electricity could be produced by renewables, without any loss in the reliability of power supplies. Unlike CCS, wind, wave, tidal, solar, hydro and geothermal power are proven technologies. Unlike nuclear power, they can be safely decommissioned as soon as they become redundant.
A policy like this requires both courage and vision. So look at the current cabinet - Brown, Straw, Darling, Hutton, Blears, Kelly, Hoon - and weep. Every man and woman with backbone was purged from this government years ago, leaving those who know how to appease the interests that might threaten them. These people won't stand up to business, even when the future prospects of mankind are at stake.
If fear is the only thing that moves them, we must present them with a greater threat than the companies planning new coal plants. We must show that this issue has become a political flashpoint; that the public revulsion towards new coal could help to eject them from office. You could do no better than joining us at Kingsnorth this week.
monbiot.com
How economic ideas make it into the mainstream
Fringe ideas like pay-as-you-drive auto insurance can gain acceptance as long as they don't threaten powerful industries
Dean Baker
guardian.co.uk,
Monday August 04 2008 17:00 BST
One of the painfully obvious ways to reduce greenhouse gas emissions and reduce oil consumption is to promote pay-as-you-drive auto insurance. The basic point is simple. As it stands now, most people will pay the same amount for their insurance whether they drive 500 miles or 50,000 miles. However, their risk of being in an accident is clearly greater the more miles they drive. If we can have insurance prices reflect the increased risk, it would both mean better insurance pricing and give people a substantial disincentive to drive.
The impact could be quite large. The average cost of insurance per mile driven is close to eight cents. This means that if insurance were paid on a per-mile basis, for a car that gets 20 miles to a gallon, pay-as-you-drive insurance would provide the same disincentive to drive as a $1.60-a-gallon gas tax. This can easily lead to reductions in gas consumption and greenhouse gas emissions from the auto sector of 10% or more.
The great part is that it doesn't even raise driving costs on average. It just makes a fixed cost – the annual insurance premium – into a per-mile cost. Since people will now presumably drive less and therefore have fewer accidents, they should actually end up paying less on average for insurance.
I first wrote about this a decade ago with my then-colleague at the Economic Policy Institute, Jim Barrett (pdf). Others had written about pay-as-you-drive even earlier, such as Patrick Butler with the National Organisation for Women, Daniel Khazzoom at San Jose State University, Todd Littman at the Victoria Transport Institute and Aaron Edlin, now at Berkeley. The reason for mentioning pay-as-you-drive insurance now is that the idea has finally reached the mainstream. Two researchers affiliated with the Brookings Institution have written a piece touting the merits of pay-as-you-drive insurance.
This is great news. It means that congressional staffers and potential White House political operatives can now take the idea seriously. Environmental groups, who are more fearful of new ideas than global warming, may also be persuaded to consider it as a policy option. Now that a pillar of intellectual establishment like Brookings has certified the respectability of pay-as-you-drive insurance, it means that it is at last a viable political option.
It's great to see that the Brookings crew can occasionally pick up a new idea. Of course pay-as-you-drive is very safe as new ideas go, since it doesn't threaten any powerful interest groups. Insurance companies can make just as much money selling pay-as-you-drive insurance as selling their current polices. The oil companies may be unhappy, but they can no more prevent pay-as-you-drive insurance than they can stop people from driving more fuel-efficient cars.
It would be interesting to see if the Brookings gang could ever be persuaded to examine some policy proposals that actually did ruffle some powerful feathers. For example, this group of hardcore "free traders" has never seriously considered freer trade in the area in which the US stands to benefit the most: healthcare.If our trade policies made it easier for foreign doctors to come to the US, or US citizens to take advantage of high-quality, low-cost care abroad, the potential gains would be enormous. Of course, since free trade in medical care would hurt the insurance industry and highly paid medical specialists, that's a lot more difficult than going after textile and autoworkers and the other losers from recent trade agreements.
Speaking of protectionism, how about considering more efficient alternatives to patent financing of prescription drug research? Without government-imposed patent protection, we would pay less than $50bn a year for drugs that now cost us $250bn a year. If direct funding for research sounds too radical, how about just paying for the clinical trials where the worst industry abuses occur? But, this proposal would anger the pharmaceutical industry.
In a year in which the big Wall Street banks have been driven to edge of bankruptcy or beyond, by executives who have pocketed tens of millions of dollars in compensation, one would think economists might be concerned about the obvious agency problem in the system. Perhaps they would try to rein in a sector of the economy that is clearly out of control, imposing a small financial transactions tax that could raise more than a trillion dollars over the next decade. This one would upset the financial industry, which happens to be a big source of money for the Brookings crew.
No one expects a pillar of the intellectual establishment like Brookings to be a major source of cutting-edge ideas. It is encouraging that they can occasionally pick up an idea that has been developed on the fringe, like pay-as-you-drive insurance. It's too bad that the power of major industry lobbies makes this such a rare occurrence.
Dean Baker
guardian.co.uk,
Monday August 04 2008 17:00 BST
One of the painfully obvious ways to reduce greenhouse gas emissions and reduce oil consumption is to promote pay-as-you-drive auto insurance. The basic point is simple. As it stands now, most people will pay the same amount for their insurance whether they drive 500 miles or 50,000 miles. However, their risk of being in an accident is clearly greater the more miles they drive. If we can have insurance prices reflect the increased risk, it would both mean better insurance pricing and give people a substantial disincentive to drive.
The impact could be quite large. The average cost of insurance per mile driven is close to eight cents. This means that if insurance were paid on a per-mile basis, for a car that gets 20 miles to a gallon, pay-as-you-drive insurance would provide the same disincentive to drive as a $1.60-a-gallon gas tax. This can easily lead to reductions in gas consumption and greenhouse gas emissions from the auto sector of 10% or more.
The great part is that it doesn't even raise driving costs on average. It just makes a fixed cost – the annual insurance premium – into a per-mile cost. Since people will now presumably drive less and therefore have fewer accidents, they should actually end up paying less on average for insurance.
I first wrote about this a decade ago with my then-colleague at the Economic Policy Institute, Jim Barrett (pdf). Others had written about pay-as-you-drive even earlier, such as Patrick Butler with the National Organisation for Women, Daniel Khazzoom at San Jose State University, Todd Littman at the Victoria Transport Institute and Aaron Edlin, now at Berkeley. The reason for mentioning pay-as-you-drive insurance now is that the idea has finally reached the mainstream. Two researchers affiliated with the Brookings Institution have written a piece touting the merits of pay-as-you-drive insurance.
This is great news. It means that congressional staffers and potential White House political operatives can now take the idea seriously. Environmental groups, who are more fearful of new ideas than global warming, may also be persuaded to consider it as a policy option. Now that a pillar of intellectual establishment like Brookings has certified the respectability of pay-as-you-drive insurance, it means that it is at last a viable political option.
It's great to see that the Brookings crew can occasionally pick up a new idea. Of course pay-as-you-drive is very safe as new ideas go, since it doesn't threaten any powerful interest groups. Insurance companies can make just as much money selling pay-as-you-drive insurance as selling their current polices. The oil companies may be unhappy, but they can no more prevent pay-as-you-drive insurance than they can stop people from driving more fuel-efficient cars.
It would be interesting to see if the Brookings gang could ever be persuaded to examine some policy proposals that actually did ruffle some powerful feathers. For example, this group of hardcore "free traders" has never seriously considered freer trade in the area in which the US stands to benefit the most: healthcare.If our trade policies made it easier for foreign doctors to come to the US, or US citizens to take advantage of high-quality, low-cost care abroad, the potential gains would be enormous. Of course, since free trade in medical care would hurt the insurance industry and highly paid medical specialists, that's a lot more difficult than going after textile and autoworkers and the other losers from recent trade agreements.
Speaking of protectionism, how about considering more efficient alternatives to patent financing of prescription drug research? Without government-imposed patent protection, we would pay less than $50bn a year for drugs that now cost us $250bn a year. If direct funding for research sounds too radical, how about just paying for the clinical trials where the worst industry abuses occur? But, this proposal would anger the pharmaceutical industry.
In a year in which the big Wall Street banks have been driven to edge of bankruptcy or beyond, by executives who have pocketed tens of millions of dollars in compensation, one would think economists might be concerned about the obvious agency problem in the system. Perhaps they would try to rein in a sector of the economy that is clearly out of control, imposing a small financial transactions tax that could raise more than a trillion dollars over the next decade. This one would upset the financial industry, which happens to be a big source of money for the Brookings crew.
No one expects a pillar of the intellectual establishment like Brookings to be a major source of cutting-edge ideas. It is encouraging that they can occasionally pick up an idea that has been developed on the fringe, like pay-as-you-drive insurance. It's too bad that the power of major industry lobbies makes this such a rare occurrence.
Pointless printouts lay waste to profit
Jo Adetunji
The Guardian,
Tuesday August 5 2008
British office workers waste up to 120bn pieces of paper every year, costing businesses as much as 10% of their turnover, according to Envirowise, a government-funded programme that offers advice on sustainability to businesses.
The organisation has identified five types of print junkie, including "old school" printers who feel they cannot deal with email requests without printing a hard copy, and "competitive" printers who believe the more paper they have on their desks the more important they look. "Trigger happy" staff who fail to check the number of pages in lengthy documents not only cause queues of frustrated colleagues at the printer but also contribute to the failure of the "paperless office" dream and are costing companies dear.
"Unnecessary printing of emails, multiple copies, single-sided printing and the sending of massive documents to the printer which are unlikely to be read are just some of the regular scenarios lived out by businesses every day," said Mary Leonard, director at Envirowise. "Most offices will find they can reduce waste costs by around 20% through simple no- or low-cost actions. Measures such as double-sided or multiple-page printing and recycling instead of paying for disposal can really help.
"4% is an average but we've found some manufacturing companies can save as much as 10% of their turnover."
A typical office worker prints 22 pages of paper every day, according to the organisation, many of which may be documents and messages that do not need to be printed out and are needlessly adding to mountains of waste.
The Guardian,
Tuesday August 5 2008
British office workers waste up to 120bn pieces of paper every year, costing businesses as much as 10% of their turnover, according to Envirowise, a government-funded programme that offers advice on sustainability to businesses.
The organisation has identified five types of print junkie, including "old school" printers who feel they cannot deal with email requests without printing a hard copy, and "competitive" printers who believe the more paper they have on their desks the more important they look. "Trigger happy" staff who fail to check the number of pages in lengthy documents not only cause queues of frustrated colleagues at the printer but also contribute to the failure of the "paperless office" dream and are costing companies dear.
"Unnecessary printing of emails, multiple copies, single-sided printing and the sending of massive documents to the printer which are unlikely to be read are just some of the regular scenarios lived out by businesses every day," said Mary Leonard, director at Envirowise. "Most offices will find they can reduce waste costs by around 20% through simple no- or low-cost actions. Measures such as double-sided or multiple-page printing and recycling instead of paying for disposal can really help.
"4% is an average but we've found some manufacturing companies can save as much as 10% of their turnover."
A typical office worker prints 22 pages of paper every day, according to the organisation, many of which may be documents and messages that do not need to be printed out and are needlessly adding to mountains of waste.
Going green a growing trend among homeowners
The Associated Press
Published: August 5, 2008
CHICAGO: The bathroom tiles are recycled wine bottles. The hardwood floors are sustainable bamboo. And the sprawling garden gets sprinkled with rainwater collected in 300-gallon (1,135-liter) barrels.
From its recycled plastic deck to its solar-paneled roof, everything in and about the 2,500-square-foot (232 sq. meter) home on exhibit just outside of the Museum of Science and Industry has been designed to show the public how easy it can be to incorporate environmental sustainability into their own abodes.
"We tried to look for ideas in every choice that we make in our homes ... hoping that everyone who goes through it will be inspired to make some change on some level," said Michelle Kaufmann, the Oakland, California-based architect who designed the SmartHome. "Some people will walk away and want to do an entire new home or some people will think when they go for their towels next and go for organic linens."
In fact, green housing is growing even while the overall housing market is suffering, said Nate Kredich, the council's vice president for residential market development.
This year, green building is expected to represent 6 percent of the residential construction industry, according to a survey conducted by McGraw-Hill Construction Research & Analytics for the U.S. Green Building Council. That's up from just 2 percent in 2005.
"It is happening. But the industry needs to do a better job of getting information into people's hands when they're looking for it," Kredich said.
The goal of the Chicago exhibit, which runs through January, is to show visitors that saving energy and conserving resources are within reach of everyone — whether it's an entire house or a single feature, museum officials said.
The modular home, which Kaufmann said uses less than half the energy and a third of the water of traditional homes, includes a kitchen with a countertop composter and a sink made from concrete and fly ash — a byproduct of burning coal. Water from the bathroom sink is diverted to the toilet, where it is used for flushing. A bicycle in the children's bedroom must be pedaled for 30 minutes to charge a battery to power video games.
Visitors receive a resource guide that tells about the function of each feature, how they're assembled and where they can be purchased. The bicycle system, for example, was homemade from parts bought on an electronics Web site.
Jasmine Davis, 23, who visited the home with her mother said the exhibit gave her tips for her own apartment. "I like not making a negative impact on the Earth," Davis said.
"It's got so much to be said for it because it uses nature and natural materials," said Robert Richards, 70, who visited with friends. "It's open. You bring the outside in and you can even bring the inside out. It's a house built for humans. It's plausible in real life."
David Johnston, who owns an international green building consulting firm in Boulder, Colorado, said the exhibit is a great way to educate the public about green possibilities, but he hopes that the home's ultramodern architecture doesn't leave visitors with "the impression that green building has to be modern, weird, solar, ugly."
"One of the things that's fundamental to green building is that it can look like anything. It can be a regular Craftsman house or a Cape Cod house in New England or an adobe house in Santa Fe. You don't have to change what the home looks like to make it green."
Anne Rashford, the museum's SmartHome project manager, said nobody expects that people will try to recreate the exhibit home.
"But we hope people will make informed decisions when they're building, when they're renovating," Rashford said.
While it can be tough for homeowners to figure out where they're going to get the most green payback for their money, Kaufmann and Johnston agree overall energy usage and building materials will attract homeowners to a green house.
Johnston suggests rolling the costs of energy-saving features into the mortgage by choosing quality insulation and solar panels during the building phase. Kaufmann says homeowners could spend $1,000 on an energy-metering system that provides a dashboard for power usage.
"Once I can see in real time how my behavior translates to my usage, I can make changes," she said. "These homes will actually cost less."
Johnston, who has written a book on green building, said being energy efficient beyond existing building codes, conserving resources, recycling and improving indoor air quality truly make homes green.
"If you're very clever, if you're a do-it-yourself kind of person, you can do one room at a time and achieve your ultimate goal," he said.
Kaufmann said homeowners are ready.
"It's no longer a question if people want to go green or not. They do," Kaufmann said. "People are wanting an alternative."
___
On the Net:
Museum of Science and Industry: http://www.usgbc.org/
Published: August 5, 2008
CHICAGO: The bathroom tiles are recycled wine bottles. The hardwood floors are sustainable bamboo. And the sprawling garden gets sprinkled with rainwater collected in 300-gallon (1,135-liter) barrels.
From its recycled plastic deck to its solar-paneled roof, everything in and about the 2,500-square-foot (232 sq. meter) home on exhibit just outside of the Museum of Science and Industry has been designed to show the public how easy it can be to incorporate environmental sustainability into their own abodes.
"We tried to look for ideas in every choice that we make in our homes ... hoping that everyone who goes through it will be inspired to make some change on some level," said Michelle Kaufmann, the Oakland, California-based architect who designed the SmartHome. "Some people will walk away and want to do an entire new home or some people will think when they go for their towels next and go for organic linens."
In fact, green housing is growing even while the overall housing market is suffering, said Nate Kredich, the council's vice president for residential market development.
This year, green building is expected to represent 6 percent of the residential construction industry, according to a survey conducted by McGraw-Hill Construction Research & Analytics for the U.S. Green Building Council. That's up from just 2 percent in 2005.
"It is happening. But the industry needs to do a better job of getting information into people's hands when they're looking for it," Kredich said.
The goal of the Chicago exhibit, which runs through January, is to show visitors that saving energy and conserving resources are within reach of everyone — whether it's an entire house or a single feature, museum officials said.
The modular home, which Kaufmann said uses less than half the energy and a third of the water of traditional homes, includes a kitchen with a countertop composter and a sink made from concrete and fly ash — a byproduct of burning coal. Water from the bathroom sink is diverted to the toilet, where it is used for flushing. A bicycle in the children's bedroom must be pedaled for 30 minutes to charge a battery to power video games.
Visitors receive a resource guide that tells about the function of each feature, how they're assembled and where they can be purchased. The bicycle system, for example, was homemade from parts bought on an electronics Web site.
Jasmine Davis, 23, who visited the home with her mother said the exhibit gave her tips for her own apartment. "I like not making a negative impact on the Earth," Davis said.
"It's got so much to be said for it because it uses nature and natural materials," said Robert Richards, 70, who visited with friends. "It's open. You bring the outside in and you can even bring the inside out. It's a house built for humans. It's plausible in real life."
David Johnston, who owns an international green building consulting firm in Boulder, Colorado, said the exhibit is a great way to educate the public about green possibilities, but he hopes that the home's ultramodern architecture doesn't leave visitors with "the impression that green building has to be modern, weird, solar, ugly."
"One of the things that's fundamental to green building is that it can look like anything. It can be a regular Craftsman house or a Cape Cod house in New England or an adobe house in Santa Fe. You don't have to change what the home looks like to make it green."
Anne Rashford, the museum's SmartHome project manager, said nobody expects that people will try to recreate the exhibit home.
"But we hope people will make informed decisions when they're building, when they're renovating," Rashford said.
While it can be tough for homeowners to figure out where they're going to get the most green payback for their money, Kaufmann and Johnston agree overall energy usage and building materials will attract homeowners to a green house.
Johnston suggests rolling the costs of energy-saving features into the mortgage by choosing quality insulation and solar panels during the building phase. Kaufmann says homeowners could spend $1,000 on an energy-metering system that provides a dashboard for power usage.
"Once I can see in real time how my behavior translates to my usage, I can make changes," she said. "These homes will actually cost less."
Johnston, who has written a book on green building, said being energy efficient beyond existing building codes, conserving resources, recycling and improving indoor air quality truly make homes green.
"If you're very clever, if you're a do-it-yourself kind of person, you can do one room at a time and achieve your ultimate goal," he said.
Kaufmann said homeowners are ready.
"It's no longer a question if people want to go green or not. They do," Kaufmann said. "People are wanting an alternative."
___
On the Net:
Museum of Science and Industry: http://www.usgbc.org/
Centrica issues British Energy statement
Robin Pagnamenta and Siobhan Kennedy
The Takeover Panel has intervened in the row over the future of British Energy, forcing Centrica to issue a statement clarifying its position over a possible £22 billion merger with the nuclear generator.
The was also speculation yesterday that Centrica had resumed discussions about an all-share merger with British Energy after talks about a French-backed takeover of the group, in which Centrica had hoped to play a junior role, stalled last week.
Centrica's statement yesterday said that it would consider a number of other alternatives with respect to British Energy, if the proposed £12 billion takeover by EDF, the electricity group 84 per cent controlled by the French State, did not succeed.
“These alternatives may include proposing to British Energy: long-term power off-take arrangements, Centrica participating in British Energy's potential new nuclear partnerships or a possible merger of Centrica with British Energy, only if terms could be agreed and if all parties are fully supportive.”
The statement also emphasised that no direct talks with British Energy, which is 35 per cent owned by the Government, about a possible merger were taking place. Under Takeover Panel rules, companies can be forced to declare their position if speculation regarding possible corporate activity is thought to be at risk of distorting the market.
A widely expected takeover by EDF, the world's largest nuclear generator, was called off at the eleventh hour last week after two key shareholders in the British company demanded a higher valuation than the 765p per share on offer. They were also critical of the structure of the deal, which included a “contingent value rights” component designed to give them the chance to benefit from future success of the energy group.
It remains unclear if EDF will be willing to raise its offer, but the Government indicated yesterday that its preferred option for British Energy remained a takeover led by EDF. “The Secretary of State said on Friday the EDF deal would have been a good fit. That remains our view and the parties are still in discussion. Our clear preference is for a business with experience of new nuclear build,” a Department for Business spokesman said.
Centrica had proposed the idea of an all-share merger with British Energy earlier in the year, but shareholders had indicated that they would prefer a cash deal.
The Government wants the use the sale of British Energy, which owns most of the best sites, as an opportunity to kickstart the construction of a new generation of nuclear power stations.
The Takeover Panel has intervened in the row over the future of British Energy, forcing Centrica to issue a statement clarifying its position over a possible £22 billion merger with the nuclear generator.
The was also speculation yesterday that Centrica had resumed discussions about an all-share merger with British Energy after talks about a French-backed takeover of the group, in which Centrica had hoped to play a junior role, stalled last week.
Centrica's statement yesterday said that it would consider a number of other alternatives with respect to British Energy, if the proposed £12 billion takeover by EDF, the electricity group 84 per cent controlled by the French State, did not succeed.
“These alternatives may include proposing to British Energy: long-term power off-take arrangements, Centrica participating in British Energy's potential new nuclear partnerships or a possible merger of Centrica with British Energy, only if terms could be agreed and if all parties are fully supportive.”
The statement also emphasised that no direct talks with British Energy, which is 35 per cent owned by the Government, about a possible merger were taking place. Under Takeover Panel rules, companies can be forced to declare their position if speculation regarding possible corporate activity is thought to be at risk of distorting the market.
A widely expected takeover by EDF, the world's largest nuclear generator, was called off at the eleventh hour last week after two key shareholders in the British company demanded a higher valuation than the 765p per share on offer. They were also critical of the structure of the deal, which included a “contingent value rights” component designed to give them the chance to benefit from future success of the energy group.
It remains unclear if EDF will be willing to raise its offer, but the Government indicated yesterday that its preferred option for British Energy remained a takeover led by EDF. “The Secretary of State said on Friday the EDF deal would have been a good fit. That remains our view and the parties are still in discussion. Our clear preference is for a business with experience of new nuclear build,” a Department for Business spokesman said.
Centrica had proposed the idea of an all-share merger with British Energy earlier in the year, but shareholders had indicated that they would prefer a cash deal.
The Government wants the use the sale of British Energy, which owns most of the best sites, as an opportunity to kickstart the construction of a new generation of nuclear power stations.
UK would block British Energy deal
By Rebecca Bream and Jean Eaglesham in London
Published: August 4 2008 23:31
The UK government would block any attempt by Centrica to merge with British Energy, the nuclear group, after the owner of British Gas said it was considering the idea.
Centrica said on Monday that it would pursue the idea of a merger with British Energy if a £12bn ($23.5bn) proposed takeover by EDF of France does not go ahead.
After media speculation about its role in the situation prompted the UK Takeover Panel to demand a statement, Centrica confirmed that it was in talks with “a third party”, known to be EDF, about taking a minority ownership position in British Energy if EDF’s takeover goes ahead.
If EDF’s offer does not succeed, Centrica said it would look at alternatives, including signing long-term power supply contracts with British Energy, taking part in the group’s new nuclear projects, or “a possible merger of Centrica with British Energy, only if terms could be agreed and if all parties are fully supportive”.
But a UK senior government official said any deal between Centrica and British Energy would require the approval of the state, as it owns a 35 per cent stake in British Energy. “It’s not receiving the support of this party,” the official said. “British Energy needs more [new nuclear] expertise, experience and knowledge technologies – Centrica’s not going to provide that.”
An EDF takeover remains the government’s preferred option as this would allow it to raise much-needed cash, and ministers are working behind the scenes in the hopes of facilitating a deal.
The French group was poised to announce its 765p-a-share cash bid for British Energy last Friday, but had to scrap its plans late on Thursday night after two of British Energy’s largest institutional shareholders – Invesco and M&G – rejected the offer as too low.
Although relations between EDF and British Energy have been soured by the last-minute collapse of the deal, there appeared to be hope on both sides yesterday that a deal could still go ahead. One person close to negotiations said that the government could drop its condition to only back EDF’s offer once it gains acceptance from 50 per cent of British Energy shareholders, making Invesco and M&G’s 22 per cent block less influential.
Another person said EDF could still try to win over Invesco and M&G. Pierre Gadonneix, EDF chief executive, has been given a mandate to raise his group’s bid to 790p a share.
Additional reporting by Ben Hall in Paris
Copyright The Financial Times Limited 2008
Published: August 4 2008 23:31
The UK government would block any attempt by Centrica to merge with British Energy, the nuclear group, after the owner of British Gas said it was considering the idea.
Centrica said on Monday that it would pursue the idea of a merger with British Energy if a £12bn ($23.5bn) proposed takeover by EDF of France does not go ahead.
After media speculation about its role in the situation prompted the UK Takeover Panel to demand a statement, Centrica confirmed that it was in talks with “a third party”, known to be EDF, about taking a minority ownership position in British Energy if EDF’s takeover goes ahead.
If EDF’s offer does not succeed, Centrica said it would look at alternatives, including signing long-term power supply contracts with British Energy, taking part in the group’s new nuclear projects, or “a possible merger of Centrica with British Energy, only if terms could be agreed and if all parties are fully supportive”.
But a UK senior government official said any deal between Centrica and British Energy would require the approval of the state, as it owns a 35 per cent stake in British Energy. “It’s not receiving the support of this party,” the official said. “British Energy needs more [new nuclear] expertise, experience and knowledge technologies – Centrica’s not going to provide that.”
An EDF takeover remains the government’s preferred option as this would allow it to raise much-needed cash, and ministers are working behind the scenes in the hopes of facilitating a deal.
The French group was poised to announce its 765p-a-share cash bid for British Energy last Friday, but had to scrap its plans late on Thursday night after two of British Energy’s largest institutional shareholders – Invesco and M&G – rejected the offer as too low.
Although relations between EDF and British Energy have been soured by the last-minute collapse of the deal, there appeared to be hope on both sides yesterday that a deal could still go ahead. One person close to negotiations said that the government could drop its condition to only back EDF’s offer once it gains acceptance from 50 per cent of British Energy shareholders, making Invesco and M&G’s 22 per cent block less influential.
Another person said EDF could still try to win over Invesco and M&G. Pierre Gadonneix, EDF chief executive, has been given a mandate to raise his group’s bid to 790p a share.
Additional reporting by Ben Hall in Paris
Copyright The Financial Times Limited 2008
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