By John Reed in London
Published: September 4 2008 20:25
Honda is reviving the Insight nameplate for its new lower-priced hybrid car, due from next year to take on Toyota’s top-selling Prius.
Japan’s second-largest carmaker on Thursday unveiled a concept version of the car, which will have its premiere in Paris next month. Honda said it would be “significantly lower” in price than any other hybrid on the market.
The Prius commands a price premium over comparably sized cars, so for manufacturers seeking to build market share in hybrids, cost has become an issue.
Honda’s five-door car will go on sale in spring 2009, and the carmaker hopes to sell 200,000 Insights a year. It plans four hybrid models in all and predicts that hybrids will account for 10 per cent of its global sales by 2010.
Honda will make the car at its Suzuka factory south-west of Tokyo.
In resuscitating the Insight name, Honda is harkening back to its pioneering model launched in December 1999, which was soon outsold by the Prius.
Takeo Fukui, Honda’s chief executive, on Thursday described the original Insight as “the pioneer of hybrid technology in Europe” and “an iconic symbol of Honda’s environmental innovation”.
The car, which launched in the US just before the Prius, was designed as a two-seater because its battery was so large that it went across the rear seats.
The Prius, widely acknowledged in the industry as a masterstroke of marketing, soon outsold it.
Toyota has sold more than 1m of the cars worldwide since 1999, and is developing a plug-in version that will extend the car’s electric driving range.
Honda sold only 17,000 Insights worldwide, and discontinued the model in 2003. Honda also sold in the US a hybrid version of its Accord model, which it discontinued in 2007.
The hybrid version of its Civic model is a distant second to the Prius among global hybrid cars. Honda sold 52,000 of the cars last year.
Analysts say that the Prius has achieved market dominance in hybrids in part due to its unusual styling, which allowed drivers to telegraph their “green” credentials.
Honda’s new hybrid will also have a distinctive look, taking cues from its hydrogen-powered FCX Clarity launched last year.
Hybrids still account for a small proportion of global car sales but are seen as a key emerging technology, and have captured the imagination of carbuyers in the US.
Honda says its hybrid system will be smaller and less complicated than that in the Toyota Prius, with a thinner motor.
Copyright The Financial Times Limited 2008
Friday, 5 September 2008
Loss of Manhattan-sized Arctic ice shelf is 'sign of things to come'
An ice shelf almost the size of Manhattan has broken off from an island in the Canadian Arctic, researchers revealed today, warning that the near-record loss of polar ice cover this summer was an indicator of the changes global warming would inflict on mankind.
The region’s ice shelf has lost 83 square miles this summer, the second-biggest retreat of ice cover in the Arctic Ocean since satellite measurements began 30 years ago, Martin Jeffries of the US National Science Foundation and University of Alaska Fairbanks, said.
But unlike retreats in the last century, the current warming of the climate means the ice shelves will not reform.
“These changes are irreversible under the present climate and indicate that the environmental conditions that have kept these ice shelves in balance for thousands of years are no longer present,” said Derek Mueller, an Arctic ice shelf specialist at Trent University in Ontario.
The 4,500-year-old Markham Ice Shelf separated from Ellesmere Island in early August and the 19-square-mile shelf is now adrift in the Arctic Ocean, Mr Mueller said.
“The Markham Ice Shelf was a big surprise because it suddenly disappeared. We went under a cloud for a bit during our research and, when the weather cleared up, all of a sudden there was no more ice shelf. It was a shocking event that underscores the rapidity of changes taking place in the Arctic,” he explained.
Two large sections of ice have also detached from the Serson Ice Shelf, shrinking it by 47 square miles - or 60 per cent. The Ward Hunt Ice Shelf, which lost 8 square miles earlier in the summer, has also continued to break up.
Mr Mueller said that a further 8 square miles had since broken off the shelf - which at around 155 square miles and 40-metres-thick is the largest remaining in the Arctic.
In all, the Arctic ice shelves have lost an area more than three times the size of Manhattan Island this summer – 23 percent of their total mass - the researchers said. The loss is more than 10 times initial predictions, they added.
Warwick Vincent, director of Laval University’s Centre for Northern Studies and a researcher in the program ArcticNet, said extensive cracks in the Ward Hunt shelf meant that it would continue to disintegrate.
“Clearly the long-term viability of that ice shelf is now actually short-term,” he said.
Formed by accumulating snow and freezing meltwater, ice shelves are large platforms of thick, ancient sea ice that float on the ocean’s surface but are connected to land.
During the last century, when ice shelves would break off, thick sea ice would eventually reform in their place and eventually over time, compression, continuous movement in the ocean and icy temperatures would help to create another ice shelf.
“But today, warmer temperatures and a changing climate means there’s no hope for regrowth. A scary scenario,” Mr Mueller said.
The latest developments come on the heels of unusual cracks in a northern Greenland glacier and the rapid melting of a southern Greenland glacier. At the other end of the globe, a 160-square-mile chunk of an Antarctic ice shelf disintegrated earlier this year.
Ellesmere Island was once entirely ringed by a single enormous ice shelf of around 3,500 square miles, which began to break up in the early 1900s. All that is left today are the four much smaller shelves that together cover little more than 299 square miles.
The coast of the island has warmed an average of two degrees Celsius in the last 50 years, said Luke Copland, director of Ottawa University’s cryospheric research lab.
In winter, temperatures are now five degrees warmer, making it more difficult for ice lost in summer to recover in winter.
“It’s part of global warming. When we warm up the planet it gets concentrated close to he poles,” Mr Copland said.
Mr Vincent said the developments in the Arctic were an early indicator of the “very substantial changes” that global warming will eventually impose on all mankind. Climate change is forecast to generate more destructive extreme weather such as hurricanes, cyclones and floods.
“Climate models indicate that the greatest changes, the most severe changes, will happen earliest in the highest northern latitudes,” he said.
“This will be the starting point for more substantial changes throughout the rest of the planet.... Our indicators are showing us exactly what the climate models predict,” he said.
The peak temperature the team recorded was 19.7 degrees Celsius, far above the average of 7.7 degrees.
Mr Vincent said he had no doubt that global warming was caused in part by human activity.
“I think we’re at a point where it is not stoppable but it can be slowed down. And if you think about the magnitude of effects on our society, then we really need to buy ourselves more time to get ready for some very substantial changes that are ahead,” he said.
The region’s ice shelf has lost 83 square miles this summer, the second-biggest retreat of ice cover in the Arctic Ocean since satellite measurements began 30 years ago, Martin Jeffries of the US National Science Foundation and University of Alaska Fairbanks, said.
But unlike retreats in the last century, the current warming of the climate means the ice shelves will not reform.
“These changes are irreversible under the present climate and indicate that the environmental conditions that have kept these ice shelves in balance for thousands of years are no longer present,” said Derek Mueller, an Arctic ice shelf specialist at Trent University in Ontario.
The 4,500-year-old Markham Ice Shelf separated from Ellesmere Island in early August and the 19-square-mile shelf is now adrift in the Arctic Ocean, Mr Mueller said.
“The Markham Ice Shelf was a big surprise because it suddenly disappeared. We went under a cloud for a bit during our research and, when the weather cleared up, all of a sudden there was no more ice shelf. It was a shocking event that underscores the rapidity of changes taking place in the Arctic,” he explained.
Two large sections of ice have also detached from the Serson Ice Shelf, shrinking it by 47 square miles - or 60 per cent. The Ward Hunt Ice Shelf, which lost 8 square miles earlier in the summer, has also continued to break up.
Mr Mueller said that a further 8 square miles had since broken off the shelf - which at around 155 square miles and 40-metres-thick is the largest remaining in the Arctic.
In all, the Arctic ice shelves have lost an area more than three times the size of Manhattan Island this summer – 23 percent of their total mass - the researchers said. The loss is more than 10 times initial predictions, they added.
Warwick Vincent, director of Laval University’s Centre for Northern Studies and a researcher in the program ArcticNet, said extensive cracks in the Ward Hunt shelf meant that it would continue to disintegrate.
“Clearly the long-term viability of that ice shelf is now actually short-term,” he said.
Formed by accumulating snow and freezing meltwater, ice shelves are large platforms of thick, ancient sea ice that float on the ocean’s surface but are connected to land.
During the last century, when ice shelves would break off, thick sea ice would eventually reform in their place and eventually over time, compression, continuous movement in the ocean and icy temperatures would help to create another ice shelf.
“But today, warmer temperatures and a changing climate means there’s no hope for regrowth. A scary scenario,” Mr Mueller said.
The latest developments come on the heels of unusual cracks in a northern Greenland glacier and the rapid melting of a southern Greenland glacier. At the other end of the globe, a 160-square-mile chunk of an Antarctic ice shelf disintegrated earlier this year.
Ellesmere Island was once entirely ringed by a single enormous ice shelf of around 3,500 square miles, which began to break up in the early 1900s. All that is left today are the four much smaller shelves that together cover little more than 299 square miles.
The coast of the island has warmed an average of two degrees Celsius in the last 50 years, said Luke Copland, director of Ottawa University’s cryospheric research lab.
In winter, temperatures are now five degrees warmer, making it more difficult for ice lost in summer to recover in winter.
“It’s part of global warming. When we warm up the planet it gets concentrated close to he poles,” Mr Copland said.
Mr Vincent said the developments in the Arctic were an early indicator of the “very substantial changes” that global warming will eventually impose on all mankind. Climate change is forecast to generate more destructive extreme weather such as hurricanes, cyclones and floods.
“Climate models indicate that the greatest changes, the most severe changes, will happen earliest in the highest northern latitudes,” he said.
“This will be the starting point for more substantial changes throughout the rest of the planet.... Our indicators are showing us exactly what the climate models predict,” he said.
The peak temperature the team recorded was 19.7 degrees Celsius, far above the average of 7.7 degrees.
Mr Vincent said he had no doubt that global warming was caused in part by human activity.
“I think we’re at a point where it is not stoppable but it can be slowed down. And if you think about the magnitude of effects on our society, then we really need to buy ourselves more time to get ready for some very substantial changes that are ahead,” he said.
Geo-engineers, too, have a vital role in saving the planet
Cleaner fuel will not halt climate catastrophe. We need to find pioneering solutions that alter the earth's thermal balance
Oliver Tickell
The Guardian,
Thursday September 4 2008
This week the Royal Society published a special edition of its journal, Philosophical Transactions, dedicated to "geo-engineering" interventions to combat global warming. Its initiative deserves to be welcomed, not rejected out of hand. The time may come when we need to geo-engineer in order to maintain our planet in a livable state.
Doug Parr, Greenpeace UK's chief scientist, made the case against: we should muster serious political will, and equally serious finance, to reduce greenhouse gas emissions. Using existing and proven clean technologies from wind turbines to concentrated solar power, we need to bring about a worldwide renewable energy revolution. If we do the above, he implied, we will not need any "outlandish" or "outright dangerous" geo-engineering solutions.
He is right in everything he is calling for. In fact, he could have gone further. We need major investments in energy efficiency and conservation, as well as in renewables. We need to bring an end to deforestation and rebuild ravaged forest ecosystems. We also need an agricultural revolution in which farmers draw down excess carbon from the atmosphere into soils, enhancing their ability to retain moisture and nutrients as well as mitigating global warming.
But even if we do all the above, can we be sure of preventing climate catastrophe? No. The Earth's climate system is characterised by feedback loops which can amplify even a small initial perturbation. And it seems that following an initial post-industrial warming of 0.8C, one major positive feedback process is already well under way, in the Arctic.
Last year saw a record melting of Arctic sea ice. This year, that record has been broken: for the first time in history, the northern ice cap can be circumnavigated. And with melting ice, more sunshine is absorbed rather than reflected back into space. The result is more warming, and more melting. In turn this increases the degassing of methane from Arctic bogs, lakes and thawing permafrost - and methane is a powerful greenhouse gas in its own right, 70 times stronger than CO2 over 20 years.
If we rapidly cut our emissions of greenhouse gases, it might bring an end to the "Arctic amplifier". Or it might not. It is entirely possible that the melting of the sea ice and the emissions of Arctic methane have already reached a point of no return that will lead to a warming world no matter what we do. It would be imprudent not to insure ourselves against this possibility.
This means setting up a global research programme into geo-engineering options. The most valuable options are those that will have immediate effect by directly altering the Earth's thermal balance. Two proposals stand out. First, the introduction of sulphate aerosol to the stratosphere to reflect sunlight. There are fears that this could damage the ozone layer, but then we know that volcanoes routinely discharge millions of tonnes of sulphate into the stratosphere, cooling the Earth without inflicting long-term harm.
James Lovelock, who developed the Gaia hypothesis, warns of global acidification as the stratospheric sulphate mist slowly falls to the ground. However this problem is easily solved. We already emit 50m tonnes of sulphur a year, mainly as sulphate from power stations and shipping. This is 10 times more than would be used for geo-engineering purposes, and that could be more than offset by additional cuts in emissions.
Better still is the proposal by physicist John Latham and colleagues to raise the reflectivity of marine clouds. This would involve a fleet of wind-powered yachts criss-crossing the world's oceans, controlled by a global network of satellites, blowing out a mist of ultra-fine salty droplets to act as cloud condensation nuclei. Latham's solution promises to be inexpensive, highly effective, environmentally benign, and reversible in a matter of days as the droplets are washed from the sky in rain.
One major question is that of who should be responsible for any interventions. The best-placed body is the UN climate convention (UNFCCC), whose major achievement to date is the Kyoto protocol. Its main objective, to "prevent dangerous anthropogenic interference with the climate system", by stabilising greenhouse gas concentrations, should be extended to accommodate the possibility of geo-engineering.
This would also provide clarity as to the purpose of geo-engineering. Doug Parr decries it as an "expression of political despair" that would only produce business-as-usual emissions. Lovelock sees it as a temporary palliative before inevitable disaster strikes. We must make sure they are both wrong. Geo-engineering should be developed strictly as a firefighting capability to maintain long-term climatic stability, not as a substitute for all the other actions we should be taking.
If the topic enters into discussions at the UNFCCC meeting in Poznan this December, member states must ensure that the two approaches are firmly linked so that no geo-engineering is permitted unless accompanied by deep and rapid cuts in emissions.
· Oliver Tickell is author of Kyoto2 kyoto2.org
Oliver Tickell
The Guardian,
Thursday September 4 2008
This week the Royal Society published a special edition of its journal, Philosophical Transactions, dedicated to "geo-engineering" interventions to combat global warming. Its initiative deserves to be welcomed, not rejected out of hand. The time may come when we need to geo-engineer in order to maintain our planet in a livable state.
Doug Parr, Greenpeace UK's chief scientist, made the case against: we should muster serious political will, and equally serious finance, to reduce greenhouse gas emissions. Using existing and proven clean technologies from wind turbines to concentrated solar power, we need to bring about a worldwide renewable energy revolution. If we do the above, he implied, we will not need any "outlandish" or "outright dangerous" geo-engineering solutions.
He is right in everything he is calling for. In fact, he could have gone further. We need major investments in energy efficiency and conservation, as well as in renewables. We need to bring an end to deforestation and rebuild ravaged forest ecosystems. We also need an agricultural revolution in which farmers draw down excess carbon from the atmosphere into soils, enhancing their ability to retain moisture and nutrients as well as mitigating global warming.
But even if we do all the above, can we be sure of preventing climate catastrophe? No. The Earth's climate system is characterised by feedback loops which can amplify even a small initial perturbation. And it seems that following an initial post-industrial warming of 0.8C, one major positive feedback process is already well under way, in the Arctic.
Last year saw a record melting of Arctic sea ice. This year, that record has been broken: for the first time in history, the northern ice cap can be circumnavigated. And with melting ice, more sunshine is absorbed rather than reflected back into space. The result is more warming, and more melting. In turn this increases the degassing of methane from Arctic bogs, lakes and thawing permafrost - and methane is a powerful greenhouse gas in its own right, 70 times stronger than CO2 over 20 years.
If we rapidly cut our emissions of greenhouse gases, it might bring an end to the "Arctic amplifier". Or it might not. It is entirely possible that the melting of the sea ice and the emissions of Arctic methane have already reached a point of no return that will lead to a warming world no matter what we do. It would be imprudent not to insure ourselves against this possibility.
This means setting up a global research programme into geo-engineering options. The most valuable options are those that will have immediate effect by directly altering the Earth's thermal balance. Two proposals stand out. First, the introduction of sulphate aerosol to the stratosphere to reflect sunlight. There are fears that this could damage the ozone layer, but then we know that volcanoes routinely discharge millions of tonnes of sulphate into the stratosphere, cooling the Earth without inflicting long-term harm.
James Lovelock, who developed the Gaia hypothesis, warns of global acidification as the stratospheric sulphate mist slowly falls to the ground. However this problem is easily solved. We already emit 50m tonnes of sulphur a year, mainly as sulphate from power stations and shipping. This is 10 times more than would be used for geo-engineering purposes, and that could be more than offset by additional cuts in emissions.
Better still is the proposal by physicist John Latham and colleagues to raise the reflectivity of marine clouds. This would involve a fleet of wind-powered yachts criss-crossing the world's oceans, controlled by a global network of satellites, blowing out a mist of ultra-fine salty droplets to act as cloud condensation nuclei. Latham's solution promises to be inexpensive, highly effective, environmentally benign, and reversible in a matter of days as the droplets are washed from the sky in rain.
One major question is that of who should be responsible for any interventions. The best-placed body is the UN climate convention (UNFCCC), whose major achievement to date is the Kyoto protocol. Its main objective, to "prevent dangerous anthropogenic interference with the climate system", by stabilising greenhouse gas concentrations, should be extended to accommodate the possibility of geo-engineering.
This would also provide clarity as to the purpose of geo-engineering. Doug Parr decries it as an "expression of political despair" that would only produce business-as-usual emissions. Lovelock sees it as a temporary palliative before inevitable disaster strikes. We must make sure they are both wrong. Geo-engineering should be developed strictly as a firefighting capability to maintain long-term climatic stability, not as a substitute for all the other actions we should be taking.
If the topic enters into discussions at the UNFCCC meeting in Poznan this December, member states must ensure that the two approaches are firmly linked so that no geo-engineering is permitted unless accompanied by deep and rapid cuts in emissions.
· Oliver Tickell is author of Kyoto2 kyoto2.org
An Inconvenient Truth exaggerated sea level rise
By Roger Highfield, Science Editor
Last Updated: 7:01pm BST 04/09/2008
Al Gore's Oscar-winning environmental documentary exaggerated the likely effects of global warming on sea levels, a new study shows.
The film, An Inconvenient Truth, suggested that the sea would rise up to 20ft "in the near future" as the ice in Greenland or Western Antarctica melts.
Other documentaries have picture Britain deluged with water, showing the House of Commons submerged.
However, while some mainstream predictions project sea levels 2 to 4 meters higher by 2100, a new study published today in Science concludes that a rise in sea level between 0.8 and 2 meters is much more likely.
While scientists agree that sea levels rose by six inches over the course of the 20th century, estimates of future rises remain hazy, mostly because there are many uncertainties, from the lack of data on what ice sheets did in the past to predict how they will react to warming, insufficient long-term satellite data to unpick the effects of natural climate change from that caused by man and a spottiness in the degree to which places such as Antarctica have warmed.
Prof Tad Pfeffer at University of Colorado in Boulder, Dr Joel Harper at University of Montana and Dr Shad O'Neel at Scripps Institute of Oceanography, La Jolla, reached these conclusions after studying the ice and water being discharged from Greenland and Antarctic ice sheets.
"We simply don't understand the physics of ice dynamics well enough to make accurate model predictions," says Dr Harper. "There are just too many uncertainties. So what we did is flip the problem on its head."
Unlike most past studies that try to add up the individual sources of ice and water discharge from the glaciers into the sea, their experiment calculated how much ice and water lost from Greenland and Antarctica that it would take for the world's seas to raise two meters.
Then they calculated how fast contributing glaciers would need to move in order to dump that much ice into the sea.
Their findings show that predictions of a two meter rise in sea level by 2100 would require significantly faster ice velocities from Greenland and Antarctica than has ever been reported before.
"We found you would need to have phenomenal calving, (calving is what happens when ice sheets meet the ocean and break apart to form icebergs)" said Dr Harper, who has lived and worked on the Greenland ice cap the past two summers, studying the increased melting there.
So if the glaciers continue to break up and melt like they are right now for 100 years, a two meter rise in sea level by 2100 would not be possible. For the Greenland ice sheet to do this, the glaciers moving into the island's calving fjords would have to increase their speed to 28.4 miles per year and sustain that speed until the end of the century.
For that reason, Prof Pfeffer and his colleagues argue that current projections of sea level rise should be updated to include more realistic rates of glacier break-up and melting in Greenland and Antarctica. They argue that their projection of as little as 0.8 meter rise in sea level by 2100 is much more realistic.
While the inflated rates often quoted by environmentalists are not completely out of the question, the authors argue that they should not be adopted as a central working hypothesis.
However, a rise of just a metre or more would wipe out the Norfolk Broads and the Wash, boosting the risk of devastating storm surges. And the new estimate does exceed that of thee latest Intergovernmental Panel on Climate Change report projects between 18 to 60 centimetres (7.2 to 24 inches) of sea level rise by 2100.
Dr David Vaughan of the British Antarctic Survey, commented: "while lower than a few of the wilder projections made by a fringe of activists, a rise of 0.8 to 2.0 metre in a century would cause enormous loss of life in the developing world and enormous cost in the developed world.
"These are big numbers, higher than the IPCC projections that governments generally use as the basis for policy-making."
Last Updated: 7:01pm BST 04/09/2008
Al Gore's Oscar-winning environmental documentary exaggerated the likely effects of global warming on sea levels, a new study shows.
The film, An Inconvenient Truth, suggested that the sea would rise up to 20ft "in the near future" as the ice in Greenland or Western Antarctica melts.
Other documentaries have picture Britain deluged with water, showing the House of Commons submerged.
However, while some mainstream predictions project sea levels 2 to 4 meters higher by 2100, a new study published today in Science concludes that a rise in sea level between 0.8 and 2 meters is much more likely.
While scientists agree that sea levels rose by six inches over the course of the 20th century, estimates of future rises remain hazy, mostly because there are many uncertainties, from the lack of data on what ice sheets did in the past to predict how they will react to warming, insufficient long-term satellite data to unpick the effects of natural climate change from that caused by man and a spottiness in the degree to which places such as Antarctica have warmed.
Prof Tad Pfeffer at University of Colorado in Boulder, Dr Joel Harper at University of Montana and Dr Shad O'Neel at Scripps Institute of Oceanography, La Jolla, reached these conclusions after studying the ice and water being discharged from Greenland and Antarctic ice sheets.
"We simply don't understand the physics of ice dynamics well enough to make accurate model predictions," says Dr Harper. "There are just too many uncertainties. So what we did is flip the problem on its head."
Unlike most past studies that try to add up the individual sources of ice and water discharge from the glaciers into the sea, their experiment calculated how much ice and water lost from Greenland and Antarctica that it would take for the world's seas to raise two meters.
Then they calculated how fast contributing glaciers would need to move in order to dump that much ice into the sea.
Their findings show that predictions of a two meter rise in sea level by 2100 would require significantly faster ice velocities from Greenland and Antarctica than has ever been reported before.
"We found you would need to have phenomenal calving, (calving is what happens when ice sheets meet the ocean and break apart to form icebergs)" said Dr Harper, who has lived and worked on the Greenland ice cap the past two summers, studying the increased melting there.
So if the glaciers continue to break up and melt like they are right now for 100 years, a two meter rise in sea level by 2100 would not be possible. For the Greenland ice sheet to do this, the glaciers moving into the island's calving fjords would have to increase their speed to 28.4 miles per year and sustain that speed until the end of the century.
For that reason, Prof Pfeffer and his colleagues argue that current projections of sea level rise should be updated to include more realistic rates of glacier break-up and melting in Greenland and Antarctica. They argue that their projection of as little as 0.8 meter rise in sea level by 2100 is much more realistic.
While the inflated rates often quoted by environmentalists are not completely out of the question, the authors argue that they should not be adopted as a central working hypothesis.
However, a rise of just a metre or more would wipe out the Norfolk Broads and the Wash, boosting the risk of devastating storm surges. And the new estimate does exceed that of thee latest Intergovernmental Panel on Climate Change report projects between 18 to 60 centimetres (7.2 to 24 inches) of sea level rise by 2100.
Dr David Vaughan of the British Antarctic Survey, commented: "while lower than a few of the wilder projections made by a fringe of activists, a rise of 0.8 to 2.0 metre in a century would cause enormous loss of life in the developing world and enormous cost in the developed world.
"These are big numbers, higher than the IPCC projections that governments generally use as the basis for policy-making."
Climate change isn't something to be believed or disbelieved
Polemics won't help us solve this problem; it is alarming that some treat it as an article of faith, says Martin Parry
Martin Parry
The Guardian,
Thursday September 4 2008
The media love a good argument, and what better than to pitch polemicists against each other from opposite ends of the spectrum? Thus we are given Björn Lomborg v Oliver Tickell in a so-called "climate debate" (Tickell's apocalyptic view obscures the solutions; Lomborg's stats won't mean much underwater, August 21). Regrettably, we learned from this only that sensible solutions are unlikely to flow from entrenched and extreme positions. Most scientists are amazed and alarmed that the issue of climate change should be treated as an article of faith - something either to be believed or disbelieved - rather than a problem surrounded by a lot of uncertainty. What we got from these two was very misleading.
Lomborg claimed: "A lead economist of the IPCC [Intergovernmental Panel on Climate Change] did a survey of all the problems and all the benefits accruing from a temperature rise over this century of about approximately 4C. The bottom line is that benefits right now outweigh the costs." There have been a few studies of the current effects of climate change (for example, on ice shelf and glacier retreat, and on plants and animals) and the IPCC has concluded these are happening faster than had been expected. But despite what Lomborg says there has been no useful assessment of whether these are beneficial or not, because aggregation of effects involves meaningless trade-offs such as comparing the destruction of Inuit communities with the benefits of ice-freed shipping lanes.
Lomborg believes that 4C of global warming "will not be a challenge to our civilisation" and derides Tickell, whom he quotes as stating that warming of this amount would bring "the beginning of the extinction of the human race". Both of these are heroic conclusions, since there has been no study of the limits to our adaptive capacity. The climate change issue has never been about whether we can survive or not, but keeping damages and costs to a tolerable level. The IPCC concluded in 2007 that we risk billions more people being short of water due to climate change, and hundreds of millions at risk of flooding and hunger. That is a lot of suffering, but not the end of civilisation.
There is a strong emerging view, proposed by the IPCC in its latest assessment in 2007, that a careful mixture of mitigation (reducing emissions) and adaptation will be necessary to meet the challenge of climate change. And this is broadly accepted by governments now striving for agreement by the end of next year. The polarised views of both Tickell and Lomborg miss this completely. We know we cannot avoid some serious climate change (our vacillation over the past 10 years has put paid to that), but we can avoid the worst of it. At a minimum we will have to adapt to about 2C of warming. The choice still available to us is whether we should try to avoid more than this amount of warming. Common sense suggests we should, since we do not really know what impacts the future holds, and we risk repeating the mistake of the movie producer Lew Grade who, looking back on the mounting losses of his film Raise the Titanic, concluded: "It would have been cheaper to lower the Atlantic."
· Martin Parry led the 2007 assessment of impacts and adaptation by the IPCC martin.parry.ipcc@googlemail.com
Martin Parry
The Guardian,
Thursday September 4 2008
The media love a good argument, and what better than to pitch polemicists against each other from opposite ends of the spectrum? Thus we are given Björn Lomborg v Oliver Tickell in a so-called "climate debate" (Tickell's apocalyptic view obscures the solutions; Lomborg's stats won't mean much underwater, August 21). Regrettably, we learned from this only that sensible solutions are unlikely to flow from entrenched and extreme positions. Most scientists are amazed and alarmed that the issue of climate change should be treated as an article of faith - something either to be believed or disbelieved - rather than a problem surrounded by a lot of uncertainty. What we got from these two was very misleading.
Lomborg claimed: "A lead economist of the IPCC [Intergovernmental Panel on Climate Change] did a survey of all the problems and all the benefits accruing from a temperature rise over this century of about approximately 4C. The bottom line is that benefits right now outweigh the costs." There have been a few studies of the current effects of climate change (for example, on ice shelf and glacier retreat, and on plants and animals) and the IPCC has concluded these are happening faster than had been expected. But despite what Lomborg says there has been no useful assessment of whether these are beneficial or not, because aggregation of effects involves meaningless trade-offs such as comparing the destruction of Inuit communities with the benefits of ice-freed shipping lanes.
Lomborg believes that 4C of global warming "will not be a challenge to our civilisation" and derides Tickell, whom he quotes as stating that warming of this amount would bring "the beginning of the extinction of the human race". Both of these are heroic conclusions, since there has been no study of the limits to our adaptive capacity. The climate change issue has never been about whether we can survive or not, but keeping damages and costs to a tolerable level. The IPCC concluded in 2007 that we risk billions more people being short of water due to climate change, and hundreds of millions at risk of flooding and hunger. That is a lot of suffering, but not the end of civilisation.
There is a strong emerging view, proposed by the IPCC in its latest assessment in 2007, that a careful mixture of mitigation (reducing emissions) and adaptation will be necessary to meet the challenge of climate change. And this is broadly accepted by governments now striving for agreement by the end of next year. The polarised views of both Tickell and Lomborg miss this completely. We know we cannot avoid some serious climate change (our vacillation over the past 10 years has put paid to that), but we can avoid the worst of it. At a minimum we will have to adapt to about 2C of warming. The choice still available to us is whether we should try to avoid more than this amount of warming. Common sense suggests we should, since we do not really know what impacts the future holds, and we risk repeating the mistake of the movie producer Lew Grade who, looking back on the mounting losses of his film Raise the Titanic, concluded: "It would have been cheaper to lower the Atlantic."
· Martin Parry led the 2007 assessment of impacts and adaptation by the IPCC martin.parry.ipcc@googlemail.com
Wind Power's Early Adopters Soothe The Conscience, but Save Few Bucks
By JEFFREY BALL September 4, 2008;
Former President George H.W. Bush has one. Jay Leno does, too. So does Maryland Congressman Roscoe Bartlett.
They've all got their own personal wind turbines.
Southwest Windpower
These clean-energy contraptions, once the purview of the hemp-and-granola crowd, are fast becoming a status symbol in Hollywood, Washington and places in between. Call them vanity turbines for the high-power set.
They aren't exactly an energy windfall. The revolutions of such relatively small turbines are so far only a slight evolution toward solving today's energy needs. But at least a turbine buyer feels better. And it is a little helpful, so why not give it a whirl?
"It puts the power in the hands of the consumer," says Andy Kruse, vice president of business development for Southwest Windpower Inc., a company based in Flagstaff, Ariz. His company installed small pinwheel-style turbines at Mr. Bush's vacation compound in Kennebunkport, Maine, Rep. Bartlett's weekend getaway in the mountains of West Virginia, and an island that airline mogul Richard Branson is developing as a low-carbon test bed.
Wind power was the second-biggest source of electricity capacity added to the U.S. last year, trailing only natural gas, according to the American Wind Energy Association. Even with that gale-force growth, wind power accounts for only about 1% of all electricity generated in the country.
The question that even proponents of this push are asking is how to ratchet it up to a level that meaningfully curbs the growth of fossil-fueled energy consumption and greenhouse-gas emissions.
Hybrid cars, for instance, are hot sellers, yet so far this year they account for only 2.9% of total U.S. light-vehicle sales, according to industry analyst J.D. Power & Associates. And because auto makers have long decided to accentuate cars' horsepower, many hybrid models get only marginally better fuel economy than comparable gasoline-powered versions.
Residential wind turbines reflect the same dilemma. The estimated 3,000 residential-scale turbines installed in the U.S. today are collectively capable of producing only about 60 megawatts of electricity, according to the wind-energy group. That's less than one-tenth the generating capacity of some modern coal-fired power plants.
The turbine model sold to Messrs. Bush, Bartlett and Branson can crank out at most two kilowatts of power. That could provide anywhere between 30% and 70% of the electricity needs of a typical house, according to government statistics. But that's optimistic; the number depends on the wind at the site and the energy load of the house. Achieving those savings requires an investment of roughly $13,000 for the turbine and installation -- an investment that often takes more than a decade to recoup. Still, the hope is that a personal wind turbine is just the beginning, or "a gateway drug," notes Ron Stimmel, small-wind advocate for the wind-energy group.
Most new technologies have started by appealing to "early adopters," people with the interest, money and contacts to catapult them into the mainstream.
Mr. Leno may help in that regard, as could his solution: to employ a range of energy-saving measures. He has plenty of polluting options: about 105 cars and 80 motorcycles. "I drive them all," he said in a telephone interview.
But he recently installed a wind turbine at the garage which houses those vehicles. Given that he also has an array of solar panels on the garage's roof and an old natural-gas powered generator, "I make way more electricity than I'm using," he said.
At a huge cost: Mr. Leno estimates the solar panels cost him $500,000 and the turbine cost about $19,000, including installation. "My credo is, people don't care how much energy you use as long as you make it yourself," says the entertainer. His daily commuter is a restored 1925 Ford Model T. "If you drive the same car for 80 years, you have less of a carbon footprint than trading in a Prius in three or four years," he says.
Some companies are particularly intrigued by the notion of cleanly producing a portion of their own power. HEB Inc., a Texas-based grocery-store chain, recently installed a wind turbine, 20 feet tall by 12 feet wide, at a distribution center in south Texas. The turbine is likely to provide between 5% and 8% of the distribution center's power needs, says Jim Fugitte, chief executive of Wind Energy Corp., the company that built and installed it.
Mr. Fugitte tells potential customers his turbine, which sits atop a 100-foot-tall tower at the center, amounts to a big billboard advertising a company's environmental commitment.
The turbine at Mr. Bush's sprawling Kennebunkport compound has "a really small" impact on the compound's consumption of fossil-fuel energy, says Southwest Wind's Mr. Kruse. The same, he says, is true on Mr. Branson's island.
Yet the line of luminaries expressing interest in his turbines is growing. Among them, Mr. Kruse says: film director Francis Ford Coppola, who couldn't be reached, a spokeswoman said, and Sam Brownback, the Republican senator from Kansas. An aide said the senator is considering a turbine at his home.
Mr. Brownback's house in Kansas has "marginal wind," laments Mr. Kruse, the wind entrepreneur. That's because breezes in the area aren't the stiffest, and the property has tall wind-blocking trees. "The economics aren't there," Mr. Kruse says. "But it's not always about that."
Write to Jeffrey Ball at jeffrey.ball@wsj.com
Former President George H.W. Bush has one. Jay Leno does, too. So does Maryland Congressman Roscoe Bartlett.
They've all got their own personal wind turbines.
Southwest Windpower
These clean-energy contraptions, once the purview of the hemp-and-granola crowd, are fast becoming a status symbol in Hollywood, Washington and places in between. Call them vanity turbines for the high-power set.
They aren't exactly an energy windfall. The revolutions of such relatively small turbines are so far only a slight evolution toward solving today's energy needs. But at least a turbine buyer feels better. And it is a little helpful, so why not give it a whirl?
"It puts the power in the hands of the consumer," says Andy Kruse, vice president of business development for Southwest Windpower Inc., a company based in Flagstaff, Ariz. His company installed small pinwheel-style turbines at Mr. Bush's vacation compound in Kennebunkport, Maine, Rep. Bartlett's weekend getaway in the mountains of West Virginia, and an island that airline mogul Richard Branson is developing as a low-carbon test bed.
Wind power was the second-biggest source of electricity capacity added to the U.S. last year, trailing only natural gas, according to the American Wind Energy Association. Even with that gale-force growth, wind power accounts for only about 1% of all electricity generated in the country.
The question that even proponents of this push are asking is how to ratchet it up to a level that meaningfully curbs the growth of fossil-fueled energy consumption and greenhouse-gas emissions.
Hybrid cars, for instance, are hot sellers, yet so far this year they account for only 2.9% of total U.S. light-vehicle sales, according to industry analyst J.D. Power & Associates. And because auto makers have long decided to accentuate cars' horsepower, many hybrid models get only marginally better fuel economy than comparable gasoline-powered versions.
Residential wind turbines reflect the same dilemma. The estimated 3,000 residential-scale turbines installed in the U.S. today are collectively capable of producing only about 60 megawatts of electricity, according to the wind-energy group. That's less than one-tenth the generating capacity of some modern coal-fired power plants.
The turbine model sold to Messrs. Bush, Bartlett and Branson can crank out at most two kilowatts of power. That could provide anywhere between 30% and 70% of the electricity needs of a typical house, according to government statistics. But that's optimistic; the number depends on the wind at the site and the energy load of the house. Achieving those savings requires an investment of roughly $13,000 for the turbine and installation -- an investment that often takes more than a decade to recoup. Still, the hope is that a personal wind turbine is just the beginning, or "a gateway drug," notes Ron Stimmel, small-wind advocate for the wind-energy group.
Most new technologies have started by appealing to "early adopters," people with the interest, money and contacts to catapult them into the mainstream.
Mr. Leno may help in that regard, as could his solution: to employ a range of energy-saving measures. He has plenty of polluting options: about 105 cars and 80 motorcycles. "I drive them all," he said in a telephone interview.
But he recently installed a wind turbine at the garage which houses those vehicles. Given that he also has an array of solar panels on the garage's roof and an old natural-gas powered generator, "I make way more electricity than I'm using," he said.
At a huge cost: Mr. Leno estimates the solar panels cost him $500,000 and the turbine cost about $19,000, including installation. "My credo is, people don't care how much energy you use as long as you make it yourself," says the entertainer. His daily commuter is a restored 1925 Ford Model T. "If you drive the same car for 80 years, you have less of a carbon footprint than trading in a Prius in three or four years," he says.
Some companies are particularly intrigued by the notion of cleanly producing a portion of their own power. HEB Inc., a Texas-based grocery-store chain, recently installed a wind turbine, 20 feet tall by 12 feet wide, at a distribution center in south Texas. The turbine is likely to provide between 5% and 8% of the distribution center's power needs, says Jim Fugitte, chief executive of Wind Energy Corp., the company that built and installed it.
Mr. Fugitte tells potential customers his turbine, which sits atop a 100-foot-tall tower at the center, amounts to a big billboard advertising a company's environmental commitment.
The turbine at Mr. Bush's sprawling Kennebunkport compound has "a really small" impact on the compound's consumption of fossil-fuel energy, says Southwest Wind's Mr. Kruse. The same, he says, is true on Mr. Branson's island.
Yet the line of luminaries expressing interest in his turbines is growing. Among them, Mr. Kruse says: film director Francis Ford Coppola, who couldn't be reached, a spokeswoman said, and Sam Brownback, the Republican senator from Kansas. An aide said the senator is considering a turbine at his home.
Mr. Brownback's house in Kansas has "marginal wind," laments Mr. Kruse, the wind entrepreneur. That's because breezes in the area aren't the stiffest, and the property has tall wind-blocking trees. "The economics aren't there," Mr. Kruse says. "But it's not always about that."
Write to Jeffrey Ball at jeffrey.ball@wsj.com
REpower wind farm breezes in
LEADING wind turbine manufacturer REpower UK has completed work on its newest wind farm project.
The Edinburgh-based UK division of the German firm has handed over the Dalswinton wind farm in Dumfries and Galloway to Airtricity, part of Scottish and Southern Energy.The wind farm consists of 15 turbines with 80-metre-high towers. Each turbine is able to generate a capacity of two megawatts (MW) of electricity.Dalswinton has a total capacity of 30MW, enough power to supply the average needs of around 20,000 homes.Henning von Barsewisch, managing director of REpower UK, said: "Dalswinton marks an important milestone in our work with Airtricity and contributes to the expansion work of REpower UK
500-megawatt offshore windfarm gets green light
An offshore wind farm that will provide enough electricity to power 372,000 homes has been given the go-ahead, it was announced yesterday. The 500-megawatt Duddon Sands scheme, off the coast of Barrow-in-Furness, Cumbria, is one of the UK's largest offshore wind farms agreed to date. It will comprise up to 139 turbines and the energy secretary, John Hutton, has also approved plans for another 150MW wind farm nearby. He said the farms would significantly increase the amount of renewable energy in Britain, "helping to cut the UK's carbon emissions and secure our energy supplies". Press Association
Second generation tidal turbines promise cheaper power
· 'Lawnmower' design turbines are more robust and larger than conventional windmill type· See a picture of how it works
Alok Jha, green technology correspondent
guardian.co.uk,
Thursday September 04 2008 17:07 BST
UK tides ... stronger tides are yellow and red. Image: DTI
Harnessing the vast energy of the UK's coastal tides could become much simpler and cheaper with a new design for the next generation of underwater turbines. The device, unveiled by a team of engineers from Oxford University, re-thinks the way power is generated underwater and the inventors believe it will be more robust, more efficient and cheaper to build and maintain than anything in operation today.
There is an immense potential resource of clean energy from the tidal flows around the UK: conservative estimates suggest there is at least five gigawatts of power, but there could be as much as 15GW, equivalent to 15 million average family homes. Tidal generators can harvest the energy of these moving streams, with the added advantage that the resource is, unlike wind, predictable.
There are only a few underwater turbines in operation today and they all operate like underwater windmills, with their blades turning at right angles to the flow of the water. In contrast, the Oxford team's device is built around a cylindrical rotor, which rolls around its long axis as the tide ebbs and flows. As a result, it can use more of the incoming water than a standard underwater windmill.
At full size, a Transverse Horizontal Axis Water Turbine (Thawt) rotor would be 10m in diameter and 60m long. Connecting two of these together with a generator in the middle could produce around 12MW of power, enough for 12,000 average family homes.
"To do that, you only need three foundations and one generator," said Martin Oldfield, senior research fellow of engineering science at Oxford University. "To do that with a [windmill] would require five foundations and 10 generators."
The Thawt device is mechanically far less complicated than anything available today, meaning it would cost less to build and maintain. "The manufacturing costs are about 60% lower, the maintenance costs are about 40% lower," said Malcolm McCulloch, head of the electrical power group at Oxford's engineering department.
So far, the researchers have successfully tested a version of Thawt that is 1m in diameter and 6m long. They are now planning to build a 5m-diameter test device that could generate electricity for the grid. By 2009 the team wants to carry out sea trials to test the device's durability in open water.
Scaling up the power at a coastal site would involve connecting together a series of Thawt rotors across the sea floor. The engineers said that, if all went well, farms of Thawt devices could be built starting around 2013. "If you have a tidal site of 20km, you could build 20km of these turbines going across [the sea floor] and then you would be into the gigawatt class," said Oldfield. This would make the farm equivalent to a small coal-fired power station.
McCulloch said that their economic analysis of the Thawt device showed that, at farm scale, the Thawt devices could be installed at around £1.7m per MW. That compares with around £3m per MW for modern marine turbine technology and just over £2m per MW for wind power.
Doug Parr, chief scientist at Greenpeace said the UK is a potential global leader in wave power. But he noted: "Many good ideas for wave power generation suffer from a lack of finance, lack of assured market and lack of access to business expertise.
"Some of these bottlenecks need to be addressed by the industry - others need government to play a boosting role rather than hoping that the rules and organisations that got us into the climate problem are going to be the ones that get us out."
In July, Bristol-based company Marine Current Turbines installed the SeaGen device, an underwater windmill device, at Strangford Lough in Northern Ireland. It is the first commercial-scale tidal device to generate power for the grid. When it is eventually running at full power, MCT said it will have an output of 1,200 kW, enough for about 1,000 homes.
"There are presently tidal devices undergoing testing – we regard those as first generation device and we regard ours as a second generation," said Oldfield. "To some extent we admire them for being pioneers of the technology but we think what we've got will end up being better."
Steph Merry, head of marine renewable energy at the Renewable Energy Association welcomed the Oxford team's work but said that, in terms of backing a technology to harness tide power, nothing can be ruled in or out. "We've got this 15% renewables target for 2020 to achieve, which equates to 40% electricity, so you have to look at all possible options of generating it."
Merry added that, technology aside, there were other stumbling blocks in building tidal projects around the UK, including what she sees as an excessive need to monitor the environmental impact of turbines. "We have to get it in proportion, you can't have an unlimited budget for environmental monitoring when every engineering company has to work to a budget for any project. At the moment, there is no limit to the monitoring that can be imposed."
She said that the industry had to sit down with environmental groups and government to find a balance between the need to tackle climate change and the requirements to safeguard the ecology of tidal areas.
Alok Jha, green technology correspondent
guardian.co.uk,
Thursday September 04 2008 17:07 BST
UK tides ... stronger tides are yellow and red. Image: DTI
Harnessing the vast energy of the UK's coastal tides could become much simpler and cheaper with a new design for the next generation of underwater turbines. The device, unveiled by a team of engineers from Oxford University, re-thinks the way power is generated underwater and the inventors believe it will be more robust, more efficient and cheaper to build and maintain than anything in operation today.
There is an immense potential resource of clean energy from the tidal flows around the UK: conservative estimates suggest there is at least five gigawatts of power, but there could be as much as 15GW, equivalent to 15 million average family homes. Tidal generators can harvest the energy of these moving streams, with the added advantage that the resource is, unlike wind, predictable.
There are only a few underwater turbines in operation today and they all operate like underwater windmills, with their blades turning at right angles to the flow of the water. In contrast, the Oxford team's device is built around a cylindrical rotor, which rolls around its long axis as the tide ebbs and flows. As a result, it can use more of the incoming water than a standard underwater windmill.
At full size, a Transverse Horizontal Axis Water Turbine (Thawt) rotor would be 10m in diameter and 60m long. Connecting two of these together with a generator in the middle could produce around 12MW of power, enough for 12,000 average family homes.
"To do that, you only need three foundations and one generator," said Martin Oldfield, senior research fellow of engineering science at Oxford University. "To do that with a [windmill] would require five foundations and 10 generators."
The Thawt device is mechanically far less complicated than anything available today, meaning it would cost less to build and maintain. "The manufacturing costs are about 60% lower, the maintenance costs are about 40% lower," said Malcolm McCulloch, head of the electrical power group at Oxford's engineering department.
So far, the researchers have successfully tested a version of Thawt that is 1m in diameter and 6m long. They are now planning to build a 5m-diameter test device that could generate electricity for the grid. By 2009 the team wants to carry out sea trials to test the device's durability in open water.
Scaling up the power at a coastal site would involve connecting together a series of Thawt rotors across the sea floor. The engineers said that, if all went well, farms of Thawt devices could be built starting around 2013. "If you have a tidal site of 20km, you could build 20km of these turbines going across [the sea floor] and then you would be into the gigawatt class," said Oldfield. This would make the farm equivalent to a small coal-fired power station.
McCulloch said that their economic analysis of the Thawt device showed that, at farm scale, the Thawt devices could be installed at around £1.7m per MW. That compares with around £3m per MW for modern marine turbine technology and just over £2m per MW for wind power.
Doug Parr, chief scientist at Greenpeace said the UK is a potential global leader in wave power. But he noted: "Many good ideas for wave power generation suffer from a lack of finance, lack of assured market and lack of access to business expertise.
"Some of these bottlenecks need to be addressed by the industry - others need government to play a boosting role rather than hoping that the rules and organisations that got us into the climate problem are going to be the ones that get us out."
In July, Bristol-based company Marine Current Turbines installed the SeaGen device, an underwater windmill device, at Strangford Lough in Northern Ireland. It is the first commercial-scale tidal device to generate power for the grid. When it is eventually running at full power, MCT said it will have an output of 1,200 kW, enough for about 1,000 homes.
"There are presently tidal devices undergoing testing – we regard those as first generation device and we regard ours as a second generation," said Oldfield. "To some extent we admire them for being pioneers of the technology but we think what we've got will end up being better."
Steph Merry, head of marine renewable energy at the Renewable Energy Association welcomed the Oxford team's work but said that, in terms of backing a technology to harness tide power, nothing can be ruled in or out. "We've got this 15% renewables target for 2020 to achieve, which equates to 40% electricity, so you have to look at all possible options of generating it."
Merry added that, technology aside, there were other stumbling blocks in building tidal projects around the UK, including what she sees as an excessive need to monitor the environmental impact of turbines. "We have to get it in proportion, you can't have an unlimited budget for environmental monitoring when every engineering company has to work to a budget for any project. At the moment, there is no limit to the monitoring that can be imposed."
She said that the industry had to sit down with environmental groups and government to find a balance between the need to tackle climate change and the requirements to safeguard the ecology of tidal areas.
It is now or never for cross-Channel nuclear fusion
By Paul Betts
Published: September 5 2008 03:00
The lights seem to be flickering again in the on/off negotiations between EDF and British Energy. Indeed, the French state-controlled electricity group may well be at last inching towards a deal to buy the UK nuclear operator - although anything could still happen.
The two companies were only hours away from announcing a deal this summer when the whole thing fell apart on the opposition of two of British Energy's big shareholders - investment funds Invesco and M&G.
In recent weeks the British government, which has a stake of about 35 per cent in the nuclear group, has been sending out loud messages that it wants a deal with EDF, and quickly.
EDF, too, wants a deal. There could be no better time for the French group to extend its nuclear reach abroad and particularly in the UK, which promises to be one of the most active nuclear markets in the near future. Several recent studies by management consultancies such as the Boston Consulting Group (BCG) also argue that there is no time like a downturn for buying new businesses and expanding into new markets.
It may seem obvious, but a BCG report shows companies with the financial capacity to pull off targeted mergers to reinforce their core businesses can pick up real bargains. But there are some significant risks. A large number of deals tend to fail if they take a company into a completely new business or into unfamiliar countries.
Should it buy British Energy, EDF does not appear to be facing these risks. First, it is already well established in the UK. For many years it has been one of Britain's biggest electricity suppliers. Second, few can doubt the nuclear credentials of the operator of no fewer than 58 nuclear plants in France.
Indeed, it is also now enjoying a few additional advantages thanks to the recent collapse of the pound and the decline in oil prices. The pound's fall gives EDF more room for manoeuvre on price, while the appetites of British Energy's two big private shareholders should be tempered by the weakening of energy and commodity prices.
So it is really now or never for EDF and British Energy's shareholders.
German signal failure
It also seems to be now or never for the long-awaited partial privatisation of Deutsche Bahn's train operations. The issue has agitated German public opinion and politicians alike for the past 14 years.
But after finally securing the reluctant support of both governing coalition and opposition parties to float a 24.9 per cent stake in DB Mobility Logistics AG - the Bahn's transport, logistics and services businesses - Hartmut Mehdorn, chief executive, confirmed the stock market listing would take place late next month.
Given the weakness of financial markets, many had suggested the railways could delay the initial public offering - Germany's biggest IPO in eight years, with the government hoping to raise at least €5bn ($7.1bn) - and wait for better times.
With elections next year, the chances of pulling off such a politically difficult flotation also looked pretty slim. Indeed, the feeling at the Bahn is that it has a narrow window of opportunity to get the IPO on the rails. In other words, late October or November or otherwise perhaps never.
Under the circumstances, one would expect the Bahn to be doing everything to ensure the final leg of its long journey to the market is as smooth and uncontroversial as possible. It seems to be doing the opposite.
It has managed to spark a public outcry by deciding to raise ticket prices by 3.9 per cent in mid-December and imposing a surcharge if tickets are bought over the counter rather than on the internet or from vending machines. The company defends the increases on the grounds it is facing higher personnel and energy costs.
But the move, at the time when the purchasing power of ordinary Germans is under pressure, is largely seen as an effort to enhance the company's profitability to lure investors to its imminent IPO.
In its efforts to attract big institutional investors, it has provoked further confusion and controversy by seeking out Chinese and Russian sovereign wealth funds. Peer Steinbrück, Germany's finance minister, confirmed this week the China Investment Corporation was interested in a stake.
The problem is that Berlin has also had to play to the public gallery by pledging to defend German champions from the appetites of sovereign wealth funds. It recently amended its foreign trade act to give itself special powers to block undesirable investments by non-European Union companies. So while the Russian and Chinese interest in taking a small stake in the Bahn hardly qualifies as a national threat, it would perhaps have been wiser to wait for the IPO to get on the rails before raising the matter.
european.view@ft.com
Copyright The Financial Times Limited 2008
Published: September 5 2008 03:00
The lights seem to be flickering again in the on/off negotiations between EDF and British Energy. Indeed, the French state-controlled electricity group may well be at last inching towards a deal to buy the UK nuclear operator - although anything could still happen.
The two companies were only hours away from announcing a deal this summer when the whole thing fell apart on the opposition of two of British Energy's big shareholders - investment funds Invesco and M&G.
In recent weeks the British government, which has a stake of about 35 per cent in the nuclear group, has been sending out loud messages that it wants a deal with EDF, and quickly.
EDF, too, wants a deal. There could be no better time for the French group to extend its nuclear reach abroad and particularly in the UK, which promises to be one of the most active nuclear markets in the near future. Several recent studies by management consultancies such as the Boston Consulting Group (BCG) also argue that there is no time like a downturn for buying new businesses and expanding into new markets.
It may seem obvious, but a BCG report shows companies with the financial capacity to pull off targeted mergers to reinforce their core businesses can pick up real bargains. But there are some significant risks. A large number of deals tend to fail if they take a company into a completely new business or into unfamiliar countries.
Should it buy British Energy, EDF does not appear to be facing these risks. First, it is already well established in the UK. For many years it has been one of Britain's biggest electricity suppliers. Second, few can doubt the nuclear credentials of the operator of no fewer than 58 nuclear plants in France.
Indeed, it is also now enjoying a few additional advantages thanks to the recent collapse of the pound and the decline in oil prices. The pound's fall gives EDF more room for manoeuvre on price, while the appetites of British Energy's two big private shareholders should be tempered by the weakening of energy and commodity prices.
So it is really now or never for EDF and British Energy's shareholders.
German signal failure
It also seems to be now or never for the long-awaited partial privatisation of Deutsche Bahn's train operations. The issue has agitated German public opinion and politicians alike for the past 14 years.
But after finally securing the reluctant support of both governing coalition and opposition parties to float a 24.9 per cent stake in DB Mobility Logistics AG - the Bahn's transport, logistics and services businesses - Hartmut Mehdorn, chief executive, confirmed the stock market listing would take place late next month.
Given the weakness of financial markets, many had suggested the railways could delay the initial public offering - Germany's biggest IPO in eight years, with the government hoping to raise at least €5bn ($7.1bn) - and wait for better times.
With elections next year, the chances of pulling off such a politically difficult flotation also looked pretty slim. Indeed, the feeling at the Bahn is that it has a narrow window of opportunity to get the IPO on the rails. In other words, late October or November or otherwise perhaps never.
Under the circumstances, one would expect the Bahn to be doing everything to ensure the final leg of its long journey to the market is as smooth and uncontroversial as possible. It seems to be doing the opposite.
It has managed to spark a public outcry by deciding to raise ticket prices by 3.9 per cent in mid-December and imposing a surcharge if tickets are bought over the counter rather than on the internet or from vending machines. The company defends the increases on the grounds it is facing higher personnel and energy costs.
But the move, at the time when the purchasing power of ordinary Germans is under pressure, is largely seen as an effort to enhance the company's profitability to lure investors to its imminent IPO.
In its efforts to attract big institutional investors, it has provoked further confusion and controversy by seeking out Chinese and Russian sovereign wealth funds. Peer Steinbrück, Germany's finance minister, confirmed this week the China Investment Corporation was interested in a stake.
The problem is that Berlin has also had to play to the public gallery by pledging to defend German champions from the appetites of sovereign wealth funds. It recently amended its foreign trade act to give itself special powers to block undesirable investments by non-European Union companies. So while the Russian and Chinese interest in taking a small stake in the Bahn hardly qualifies as a national threat, it would perhaps have been wiser to wait for the IPO to get on the rails before raising the matter.
european.view@ft.com
Copyright The Financial Times Limited 2008
The nuclear industry's secret subsidies
The industry may well be 'back with a vengeance', but taxpayers could be unwittingly subsidising its growth
David Lowry
guardian.co.uk,
Thursday September 04 2008 19:30 BST
Today, several hundred nuclear industry executives will gather in London for the British-based World Nuclear Association's annual symposium.
A major session – The nuclear renaissance: redefining the global framework – chaired by Keith Parker, chief executive of the UK Nuclear Industry Association (NIA), will be devoted to the new opportunities expected as new nuclear build is back on the energy agenda, "with a vengeance", in the words of former prime minister Tony Blair.
The session will explore how changes in the law affecting nuclear development has made it much more attractive for private financiers to commit their investment capital.
Parker's NIA colleague, Tristram Denton (in a letter to the Guardian on August 19), was right in stating that "government has made it clear that the private sector will have to pay the full costs of any new nuclear power generation in the UK," but the government is not telling the full story. In two key nuclear expenditure areas, official, if obscure, statements have indicated that subsidies will continue.
On the final day of the parliamentary session before recess this year, energy minister Malcolm Wicks told Labour backbencher Paul Flynn MP in a written answer that:
Whilst the impact of any call on the proposed nuclear indemnity could be very high, there is only an extremely small possibility of the indemnity ever being used, and it is therefore not possible to put a meaningful financial value to the indemnity. The impossibility of quantifying the monetary value of the indemnity is the main reason that there is no commercially available insurance, and the reason an indemnity is needed.
Flynn had asked what was the financial value of the insurance indemnity against claims deemed to be "uninsurable" to be granted to the successful bidder to manage Sellafield. In an earlier answer, Flynn was told that ministers had:
Been informed by the Nuclear Decommissioning Authority (NDA) that it expects to have to grant an indemnity against uninsurable claims arising from a nuclear incident that fall outside the protections offered by the Nuclear Installations Act and the Paris/Brussels convention.
The issue is complex, but the only conclusion that can be drawn is that a significant taxpayer-funded insurance subsidy is being offered to the nuclear industry.
Moreover, in the latest annual report (pdf) of the Office for Civil Nuclear Security (OCNS), quietly released on August 15, it records:
The OCNS budget for this reporting period was £2,481k. This total, and a charge for overhead and corporate costs of £665k, was recovered from the civil nuclear industry and from the DBERR as a charge for OCNS regulatory services.
DBERR is the Department for Business, Enterprise and Regulatory Reform. This means an unquantified taxpayer subsidy, through DBERR, also went to pay for part of the necessary security arrangements applied to commercial nuclear power.
What about elsewhere? Much has been made by the nuclear industry of the new reactor, Olkiluoto 3, being built by French construction giant, Bouygues Travaux Publics, some 155 miles north west of Helsinki in Finland (next to two other reactors built in 1978 and 1980) as a model for the nuclear energy renaissance they would like to see develop globally. But the reactor has had serious problems in construction, with concrete and welding problems, as well as a serious fire, with the result that it is already two years behind schedule. This is bad news for the showcase 1,600 MW EPR (European pressurised prototype reactor), which is based on a design concept developed by nuclear giant Areva, a Franco-German consortium formed by Framatome ANP and Siemens. Olkiuoto 3's original budget of £2.5bn has already overrun by an extra £1bn.
But who is paying this ever-growing bill? Details released so far suggest that the reactor is being supported by a unique financing package. In January 2006, energy investment analyst Hugo Peek (head of power and utilities at ABN Amro) described its components thus:
Syndicated loan of €1.95bn signed December 2003:• Bayerische Landesbank (BLB), BNP Paribas, Handelsbanken, JP Morgan and Nordea• Euribor + 52.5-57.5bps• Banks received 30bps for €150m • In addition to the syndicated loan, bilateral loans worth €550m were negotiated, €1.6bn of the original facility refinanced in June 2005• The deal was said to be oversubscribed, with an increase from the original target amount of €1.5bn• MLAs were BayernLB, BTM, BNP Paribas (books), Nordea (books, docs) and SEB (books, facility agent)Tenor is seven years, with pricing currently undisclosed.
The BLB is a majority Bavarian state-owned bank, owned by the so-called free state (Freistaat Bayern). This is publicly backed investment, albeit from abroad.
But just as in the UK, the Finish government insists the new reactor will be privately financed. "The government neither builds nor funds the construction of nuclear power. The projects are implemented solely on a commercial basis," says Riku Huttunen, deputy director general at Finland's ministry of employment and the economy.
And at a global financing summit for new nuclear plants, in Paris in June 2006, Paavo Lipponen, former speaker of the Finnish parliament, who, as prime minister, laid the foundation stone for Olkiluoto 3, said:
To finance for the new unit being built in Olkiluoto the owners pay 20% equity capital and grant a loan on equity terms covering another 5%. The remaining 75% has been obtained from international finance markets through a tendering process. TVO received several offers from financial institutions and, thanks to stiff competition, the loan terms are favourable. The Olkiluoto 3 project has not received public aid from the Finnish state, either in the form of guarantees or grants.
But what some digging around establishes is that the French export credit agency Coface, has provided loans of €610m in "export" credit guarantees for Olkiluoto 3 to TVO, loans which also assist Areva. Additionally, Svensk Exportkredit, the Swedish export credit organisation, has provided 110m Swedish crowns (€1m). So two foreign states are providing effective publicly financed support. Lauri Myllyvirta of Greenpeace Finland has confirmed this week that both Greenpeace and the European Renewable Energies Federation are appealing to the European court of justice on the European commission ruling that these export credits do not count as state aids.
Other investors include power company TVO, whose investors include Fortum and Pohjolan Voima Oy (PVO), Finland's second-biggest energy company, plus forestry and paper giants UPM Kymmene, and Stora Enso. In addition, a host of publicly owned municipal energy companies have invested.
The French finance magazine Capital claimed in May that Areva could be obliged to pay €2.2bn in penalties to Olkiluoto 3's owners, Finnish power generator Teollisuuden Voima Oyj (TVO) for delays in the construction of the plant, an assertion swiftly denied by Areva.
Back in Britain, in the September edition of Prospect, Tom Burke, formerly executive director at Friends of the Earth, pens a excoriating critique of the optimism of the nuclear sector that an atomic renaissance is within their grasp. He wrote:
The government has pledged that there will be no subsidies for new nuclear construction. But this was never credible, and it is already possible to detect signs of retreat. In 2006 the government bravely promised to 'make sure that the full costs of new nuclear waste are paid by the market'. By 2008 this had mutated into the more nuanced: 'The government will [set] a fixed unit price [for] waste disposal at the time when approvals for the station are given.' This effectively caps the costs of nuclear waste disposal to the operator and transfers the risk of cost overruns on to the taxpayer.
Burke concludes: "It is hard to argue that this is not a subsidy."
It is hard to disagree. So nuclear critics, such as CND's Kate Hudson, are correct to assert that nuclear subsidies do indeed exist.
David Lowry
guardian.co.uk,
Thursday September 04 2008 19:30 BST
Today, several hundred nuclear industry executives will gather in London for the British-based World Nuclear Association's annual symposium.
A major session – The nuclear renaissance: redefining the global framework – chaired by Keith Parker, chief executive of the UK Nuclear Industry Association (NIA), will be devoted to the new opportunities expected as new nuclear build is back on the energy agenda, "with a vengeance", in the words of former prime minister Tony Blair.
The session will explore how changes in the law affecting nuclear development has made it much more attractive for private financiers to commit their investment capital.
Parker's NIA colleague, Tristram Denton (in a letter to the Guardian on August 19), was right in stating that "government has made it clear that the private sector will have to pay the full costs of any new nuclear power generation in the UK," but the government is not telling the full story. In two key nuclear expenditure areas, official, if obscure, statements have indicated that subsidies will continue.
On the final day of the parliamentary session before recess this year, energy minister Malcolm Wicks told Labour backbencher Paul Flynn MP in a written answer that:
Whilst the impact of any call on the proposed nuclear indemnity could be very high, there is only an extremely small possibility of the indemnity ever being used, and it is therefore not possible to put a meaningful financial value to the indemnity. The impossibility of quantifying the monetary value of the indemnity is the main reason that there is no commercially available insurance, and the reason an indemnity is needed.
Flynn had asked what was the financial value of the insurance indemnity against claims deemed to be "uninsurable" to be granted to the successful bidder to manage Sellafield. In an earlier answer, Flynn was told that ministers had:
Been informed by the Nuclear Decommissioning Authority (NDA) that it expects to have to grant an indemnity against uninsurable claims arising from a nuclear incident that fall outside the protections offered by the Nuclear Installations Act and the Paris/Brussels convention.
The issue is complex, but the only conclusion that can be drawn is that a significant taxpayer-funded insurance subsidy is being offered to the nuclear industry.
Moreover, in the latest annual report (pdf) of the Office for Civil Nuclear Security (OCNS), quietly released on August 15, it records:
The OCNS budget for this reporting period was £2,481k. This total, and a charge for overhead and corporate costs of £665k, was recovered from the civil nuclear industry and from the DBERR as a charge for OCNS regulatory services.
DBERR is the Department for Business, Enterprise and Regulatory Reform. This means an unquantified taxpayer subsidy, through DBERR, also went to pay for part of the necessary security arrangements applied to commercial nuclear power.
What about elsewhere? Much has been made by the nuclear industry of the new reactor, Olkiluoto 3, being built by French construction giant, Bouygues Travaux Publics, some 155 miles north west of Helsinki in Finland (next to two other reactors built in 1978 and 1980) as a model for the nuclear energy renaissance they would like to see develop globally. But the reactor has had serious problems in construction, with concrete and welding problems, as well as a serious fire, with the result that it is already two years behind schedule. This is bad news for the showcase 1,600 MW EPR (European pressurised prototype reactor), which is based on a design concept developed by nuclear giant Areva, a Franco-German consortium formed by Framatome ANP and Siemens. Olkiuoto 3's original budget of £2.5bn has already overrun by an extra £1bn.
But who is paying this ever-growing bill? Details released so far suggest that the reactor is being supported by a unique financing package. In January 2006, energy investment analyst Hugo Peek (head of power and utilities at ABN Amro) described its components thus:
Syndicated loan of €1.95bn signed December 2003:• Bayerische Landesbank (BLB), BNP Paribas, Handelsbanken, JP Morgan and Nordea• Euribor + 52.5-57.5bps• Banks received 30bps for €150m • In addition to the syndicated loan, bilateral loans worth €550m were negotiated, €1.6bn of the original facility refinanced in June 2005• The deal was said to be oversubscribed, with an increase from the original target amount of €1.5bn• MLAs were BayernLB, BTM, BNP Paribas (books), Nordea (books, docs) and SEB (books, facility agent)Tenor is seven years, with pricing currently undisclosed.
The BLB is a majority Bavarian state-owned bank, owned by the so-called free state (Freistaat Bayern). This is publicly backed investment, albeit from abroad.
But just as in the UK, the Finish government insists the new reactor will be privately financed. "The government neither builds nor funds the construction of nuclear power. The projects are implemented solely on a commercial basis," says Riku Huttunen, deputy director general at Finland's ministry of employment and the economy.
And at a global financing summit for new nuclear plants, in Paris in June 2006, Paavo Lipponen, former speaker of the Finnish parliament, who, as prime minister, laid the foundation stone for Olkiluoto 3, said:
To finance for the new unit being built in Olkiluoto the owners pay 20% equity capital and grant a loan on equity terms covering another 5%. The remaining 75% has been obtained from international finance markets through a tendering process. TVO received several offers from financial institutions and, thanks to stiff competition, the loan terms are favourable. The Olkiluoto 3 project has not received public aid from the Finnish state, either in the form of guarantees or grants.
But what some digging around establishes is that the French export credit agency Coface, has provided loans of €610m in "export" credit guarantees for Olkiluoto 3 to TVO, loans which also assist Areva. Additionally, Svensk Exportkredit, the Swedish export credit organisation, has provided 110m Swedish crowns (€1m). So two foreign states are providing effective publicly financed support. Lauri Myllyvirta of Greenpeace Finland has confirmed this week that both Greenpeace and the European Renewable Energies Federation are appealing to the European court of justice on the European commission ruling that these export credits do not count as state aids.
Other investors include power company TVO, whose investors include Fortum and Pohjolan Voima Oy (PVO), Finland's second-biggest energy company, plus forestry and paper giants UPM Kymmene, and Stora Enso. In addition, a host of publicly owned municipal energy companies have invested.
The French finance magazine Capital claimed in May that Areva could be obliged to pay €2.2bn in penalties to Olkiluoto 3's owners, Finnish power generator Teollisuuden Voima Oyj (TVO) for delays in the construction of the plant, an assertion swiftly denied by Areva.
Back in Britain, in the September edition of Prospect, Tom Burke, formerly executive director at Friends of the Earth, pens a excoriating critique of the optimism of the nuclear sector that an atomic renaissance is within their grasp. He wrote:
The government has pledged that there will be no subsidies for new nuclear construction. But this was never credible, and it is already possible to detect signs of retreat. In 2006 the government bravely promised to 'make sure that the full costs of new nuclear waste are paid by the market'. By 2008 this had mutated into the more nuanced: 'The government will [set] a fixed unit price [for] waste disposal at the time when approvals for the station are given.' This effectively caps the costs of nuclear waste disposal to the operator and transfers the risk of cost overruns on to the taxpayer.
Burke concludes: "It is hard to argue that this is not a subsidy."
It is hard to disagree. So nuclear critics, such as CND's Kate Hudson, are correct to assert that nuclear subsidies do indeed exist.
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