• Better rate of return across the Atlantic, says oil firm • Company to pull out of projects in India and China
Terry Macalister
guardian.co.uk, Friday November 7 2008 00.01 GMT
The Guardian, Friday November 7 2008
BP has dropped all plans to build wind farms and other renewable schemes in Britain and is instead concentrating the bulk of its $8bn (£5bn) renewables spending programme on the US, where government incentives for clean energy projects can provide a convenient tax shelter for oil and gas revenues.
The decision is a major blow to the prime minister, Gordon Brown, who has promised to sweep away all impediments to ensure Britain is at the forefront of the green energy revolution. BP and Shell - which has also pulled out of renewables in Britain - are heavily influential among investors.
BP has advertised its green credentials widely in the UK and has a representative on the ruling board of the British Wind Energy Association (BWEA). But it said difficulty in getting planning permission and lower economies of scale made the UK wind sector far less attractive than that of the US.
"The best place to get a strong rate of return for wind is the US," said a BP spokesman, who confirmed the group had shelved ideas of building an onshore wind farm at the Isle of Grain, in Kent, and would not bid for any offshore licences.
BP has enormous financial firepower as a result of recent very high crude oil prices. Its move away from wind power in Britain follows a decision by Shell to sell off its stake in the London Array project off Kent, potentially the world's largest offshore wind farm.
Shell gave the same reasons as BP for that move, saying the economics of UK wind were poor compared to those onshore across the Atlantic, where incoming president Barack Obama has promised to spend $150bn over 10 years to kick start a renewable energy revolution .
BP said about $1.5bn would be spent next year on US wind projects and the company expected to spend the $8bn up to the year 2015.
BP is still proceeding with some limited solar, biofuels and other schemes, but the vast majority of its time and energy is now being concentrated on wind. By the end of 2008, BP expects to have one gigawatt of US wind power installed and plans to have trebled this by 2010.
The BWEA shrugged off BP's decision. "The offshore wind market is evolving and getting stronger. Different investors will come and go at different stages of the development cycle. But whoever the players are, we know that the offshore industry will be generating massive amounts of electricity for the UK market in the next few years," said a spokesman.
Britain is not the only country to miss out on BP's largesse. The company said yesterday it was also pulling out of China, India and Turkey, where it had also been looking at projects.
BP had formed a joint venture with Beijing Tianrun New Energy Investment Company, a subsidiary of Goldwind, China's largest turbine maker. The two companies had signed a deal in January under which they planned 148.4MW of wind capacity in Inner Mongolia, China's main wind power region. BP had also started building two wind farms in India and was considering schemes in Turkey. It is now expecting to sell off the Indian facilities and halt work in Turkey.
Green campaigners have been highly sceptical about BP's plans to go "beyond petroleum" and feared that the company's new chief executive, Tony Hayward, would drop this commitment, started under his predecessor, John Browne.
The company has always insisted it remained keen to look at green energy solutions and has been investing in biofuels operations in Brazil. BP is also in the middle of a major marketing campaign, with huge posters on the London Underground boasting of its moves to diversify into wind and other energy sources.
The Carbon Trust, a government-funded organisation established to help Britain move from carbon to clean energy, recently published a major report warning ministers that the costs of building wind farms offshore was too high. There was speculation that BP was a major influence on that study, which proposed that turbines should be allowed to be placed much nearer to the shore.
The Crown Estate, which has responsibility for UK inshore waters, is still confident that a long-awaited third offshore wind licensing round in the North Sea will attract a record number of bidders. It has already registered 96 companies, although it has not released names and BP and Shell will clearly be absent.
Saturday 8 November 2008
BP pulls out of contest to build emissions plant
By Ed Crooks, Rebecca Bream and Fiona Harvey
Published: November 8 2008 02:00
BP has pulled out of the government's competition to build a prototype power station that will capture and store its carbon dioxide emissions, in a setback to plans to develop technologies for cutting the output of greenhouse gases while continuing to use fossil fuels.
Britain's biggest energy company will instead focus its carbon capture programme on its joint venture with Rio Tinto, the mining group, which is developing projects in California and Abu Dhabi.
It has also emerged that RWE Npower, the UK arm of the German energy group, is considering legal action against the government after failing to reach the short list for the carbon capture competition.
The government is offering a subsidy of several hundred million pounds to the competition winner, to build an integrated project including a coal-fired power station and equipment to separate carbon dioxide from the waste gases and take care of storage.
The winner is to be chosen as the preferred bidder by the end of next year, with the aim of having the project in operation by the end of 2014.
Four groups made the short list chosen by the government over the summer: BP, Eon UK, ScottishPower and Peel Holdings.
However, BP last month told the department of energy and climate change that it would drop out, having failed to find a partner with coal-fired power generation experience.
The move follows BP's decision to focus its wind power business on the US, where most of its activity is concentrated.
It had been looking at possible developments in other countries, including Britain and China, but has decided that the risks in other markets, such as offshore wind in the UK, make them commercially unattractive compared with onshore wind in the US.
The government played down the significance of BP's exit from the carbon capture competition, saying there were still "three strong bidders who are committed to the project".
In spite of its failure to make the government's short list, RWE Npower is also still keen to take part.
It has been in talks with Eon, ScottishPower and Peel about joining their bids, and hopes to make an announcement in the next few weeks.
If it fails to strike a deal, however, RWE plans to challenge the government over how the short list was drawn up.
It said it was "surprised and disappointed" to be excluded.
"As a prudent measure to preserve our position, we are submitting an application to seek a judicial review of the process," it said.
Jeff Chapman, chief executive of the Carbon Capture and Storage Association, said he was "concerned" that the timetable for the competition appeared to be slipping.
He said Britain needed to grasp carbon capture and storage as a matter of urgency.
Finalists going head-to-head
Remaining entries left in the government's carbon capture competition: Eon UK plans to build a controversial coal-fired power station at Kingsnorth in Kent, and would fit carbon capture equipment to half of one of the two units at the plant. Its partners include Tullow Oil and Arup and Fluor, two engineers. ScottishPower bought last year by Iberdrola of Spain, is in a consortium with Marathon Oil of the US and Aker, a Norwegian engineer. It hopes to add carbon capture equipment to one of the four units at Longannet, a 1970s coal-fired power station on the Firth of Forth. Peel Holdings , the owner of John Lennon airport, Mersey Docks and the Trafford Centre, has a partnership with Dong Energy, a Danish gas and electricity group. It has not yet specified which power station it would want to fit.
And one other hopeful: RWE Npower submitted an entry for its proposed power station at Tilbury in Essex, but was rejected on a technicality. It hopes to re-enter the race.
Copyright The Financial Times Limited 2008
Published: November 8 2008 02:00
BP has pulled out of the government's competition to build a prototype power station that will capture and store its carbon dioxide emissions, in a setback to plans to develop technologies for cutting the output of greenhouse gases while continuing to use fossil fuels.
Britain's biggest energy company will instead focus its carbon capture programme on its joint venture with Rio Tinto, the mining group, which is developing projects in California and Abu Dhabi.
It has also emerged that RWE Npower, the UK arm of the German energy group, is considering legal action against the government after failing to reach the short list for the carbon capture competition.
The government is offering a subsidy of several hundred million pounds to the competition winner, to build an integrated project including a coal-fired power station and equipment to separate carbon dioxide from the waste gases and take care of storage.
The winner is to be chosen as the preferred bidder by the end of next year, with the aim of having the project in operation by the end of 2014.
Four groups made the short list chosen by the government over the summer: BP, Eon UK, ScottishPower and Peel Holdings.
However, BP last month told the department of energy and climate change that it would drop out, having failed to find a partner with coal-fired power generation experience.
The move follows BP's decision to focus its wind power business on the US, where most of its activity is concentrated.
It had been looking at possible developments in other countries, including Britain and China, but has decided that the risks in other markets, such as offshore wind in the UK, make them commercially unattractive compared with onshore wind in the US.
The government played down the significance of BP's exit from the carbon capture competition, saying there were still "three strong bidders who are committed to the project".
In spite of its failure to make the government's short list, RWE Npower is also still keen to take part.
It has been in talks with Eon, ScottishPower and Peel about joining their bids, and hopes to make an announcement in the next few weeks.
If it fails to strike a deal, however, RWE plans to challenge the government over how the short list was drawn up.
It said it was "surprised and disappointed" to be excluded.
"As a prudent measure to preserve our position, we are submitting an application to seek a judicial review of the process," it said.
Jeff Chapman, chief executive of the Carbon Capture and Storage Association, said he was "concerned" that the timetable for the competition appeared to be slipping.
He said Britain needed to grasp carbon capture and storage as a matter of urgency.
Finalists going head-to-head
Remaining entries left in the government's carbon capture competition: Eon UK plans to build a controversial coal-fired power station at Kingsnorth in Kent, and would fit carbon capture equipment to half of one of the two units at the plant. Its partners include Tullow Oil and Arup and Fluor, two engineers. ScottishPower bought last year by Iberdrola of Spain, is in a consortium with Marathon Oil of the US and Aker, a Norwegian engineer. It hopes to add carbon capture equipment to one of the four units at Longannet, a 1970s coal-fired power station on the Firth of Forth. Peel Holdings , the owner of John Lennon airport, Mersey Docks and the Trafford Centre, has a partnership with Dong Energy, a Danish gas and electricity group. It has not yet specified which power station it would want to fit.
And one other hopeful: RWE Npower submitted an entry for its proposed power station at Tilbury in Essex, but was rejected on a technicality. It hopes to re-enter the race.
Copyright The Financial Times Limited 2008
BP Pulls Out of Bidding for U.K. Climate-Change Project
By GUY CHAZAN
LONDON -- The United Kingdom's hopes of becoming a world leader in the battle against global warming suffered a potential setback when British oil major BP PLC said it had pulled out of a competition to design the country's first carbon capture and storage project.
The announcement came as BP said it would be concentrating its wind investments in the U.S., effectively exiting the U.K. wind power market.
Carbon capture and storage -- known as CCS -- is critical to U.K. energy policy. Coal, which is in plentiful supply in Britain, is a big part of the U.K. energy mix. The U.K. says it will cut carbon emissions by 80% by 2050 -- a target it can achieve only if it can work out a way to sequester and safely store the carbon dioxide emitted by its coal-fired power stations.
CCS has so far never been applied on a commercial scale, and there are fears the costs will be prohibitive. Some companies developing the technology say it won't work without big financial incentives.
The U.K. government announced in July it had shortlisted four bidders to develop the country's first CCS demonstration project -- BP Alternative Energy, E.ON AG, Peel Holdings and ScottishPower, the U.K. arm of Spain's Iberdrola SA.
But BP is pulling out. "We don't believe we can put together a consortium that would win the competition," said spokesman David Nicholas. He said BP had failed to find a power generator that it could partner with.
The government said BP's move wouldn't affect the competition. "We continue to have three strong bidders who are committed to the project and to CCS," said a spokeswoman. "BP's decision does not compromise the integrity of the competition, nor will it have a material impact on the robustness of the procurement process."
But the project is facing problems on other fronts. RWE npower, the U.K. subsidiary of German utility RWE AG, has said it will seek a judicial review of the government's decision to leave it off the shortlist for the competition.
BP has already backed out of one CCS venture in the U.K. Last year, it abandoned a trial project in Peterhead, Scotland, saying the government's timetable for a competition to win financing for a prototype plant was too slow.
Mr. Nicholas said the decision on the demonstration project didn't reflect a change in BP's views on carbon capture. He said BP remained committed to Hydrogen Energy, its 50-50 joint venture with mining giant Rio Tinto PLC, which is developing two carbon-capture projects, one in California and the other in Abu Dhabi. Hydrogen Energy abandoned plans for a CCS plant in western Australia earlier this year after it failed to find geological formations suitable for long-term storage of CO2.
BP also said this week that it wouldn't be pursuing wind power initiatives in the U.K., concentrating instead on the U.S. where it said the economics made more sense. BP already has a large development portfolio in the U.S., with 15,000 megawatts of capacity.
"We can get much higher returns from the large wind farms we can put up in the U.S., due to the economies of scale," Mr. Nicholas said.
BP isn't involved in any major wind projects in Britain, though it had been looking into a wind farm on the Isle of Grain in Kent. Its rival, Royal Dutch Shell PLC, announced last May that it was pulling out of the London Array, a massive offshore-wind project, because rising costs raised doubts about its profitability. The company said the economics of investing in onshore wind power in the U.S. are "significantly better."
Write to Guy Chazan at guy.chazan@wsj.com
LONDON -- The United Kingdom's hopes of becoming a world leader in the battle against global warming suffered a potential setback when British oil major BP PLC said it had pulled out of a competition to design the country's first carbon capture and storage project.
The announcement came as BP said it would be concentrating its wind investments in the U.S., effectively exiting the U.K. wind power market.
Carbon capture and storage -- known as CCS -- is critical to U.K. energy policy. Coal, which is in plentiful supply in Britain, is a big part of the U.K. energy mix. The U.K. says it will cut carbon emissions by 80% by 2050 -- a target it can achieve only if it can work out a way to sequester and safely store the carbon dioxide emitted by its coal-fired power stations.
CCS has so far never been applied on a commercial scale, and there are fears the costs will be prohibitive. Some companies developing the technology say it won't work without big financial incentives.
The U.K. government announced in July it had shortlisted four bidders to develop the country's first CCS demonstration project -- BP Alternative Energy, E.ON AG, Peel Holdings and ScottishPower, the U.K. arm of Spain's Iberdrola SA.
But BP is pulling out. "We don't believe we can put together a consortium that would win the competition," said spokesman David Nicholas. He said BP had failed to find a power generator that it could partner with.
The government said BP's move wouldn't affect the competition. "We continue to have three strong bidders who are committed to the project and to CCS," said a spokeswoman. "BP's decision does not compromise the integrity of the competition, nor will it have a material impact on the robustness of the procurement process."
But the project is facing problems on other fronts. RWE npower, the U.K. subsidiary of German utility RWE AG, has said it will seek a judicial review of the government's decision to leave it off the shortlist for the competition.
BP has already backed out of one CCS venture in the U.K. Last year, it abandoned a trial project in Peterhead, Scotland, saying the government's timetable for a competition to win financing for a prototype plant was too slow.
Mr. Nicholas said the decision on the demonstration project didn't reflect a change in BP's views on carbon capture. He said BP remained committed to Hydrogen Energy, its 50-50 joint venture with mining giant Rio Tinto PLC, which is developing two carbon-capture projects, one in California and the other in Abu Dhabi. Hydrogen Energy abandoned plans for a CCS plant in western Australia earlier this year after it failed to find geological formations suitable for long-term storage of CO2.
BP also said this week that it wouldn't be pursuing wind power initiatives in the U.K., concentrating instead on the U.S. where it said the economics made more sense. BP already has a large development portfolio in the U.S., with 15,000 megawatts of capacity.
"We can get much higher returns from the large wind farms we can put up in the U.S., due to the economies of scale," Mr. Nicholas said.
BP isn't involved in any major wind projects in Britain, though it had been looking into a wind farm on the Isle of Grain in Kent. Its rival, Royal Dutch Shell PLC, announced last May that it was pulling out of the London Array, a massive offshore-wind project, because rising costs raised doubts about its profitability. The company said the economics of investing in onshore wind power in the U.S. are "significantly better."
Write to Guy Chazan at guy.chazan@wsj.com
Wind investment at a standstill
Robin Pagamenta: Analysis
The Government wants to build an unprecedented 33 gigawatts of wind power capacity by 2020 to help to meet Britain's carbon reduction targets, but sceptics question whether the 15,000 turbines will ever be built.
Thirty-three gigawatts represents one third of UK power generation and on some days it would be enough to power every home in the country. However, a lack of financial incentives, a trebling of costs since 2003 and now the falling price of oil are undermining confidence in the industry.
Several investors are shunning Britain in favour of the bigger subsidies and the more established investment climate available for onshore windfarms in Spain, Germany and the United States.
Developers also complain about the convoluted UK planning system and the difficulty of getting connections to the National Grid.
Such problems have encouraged the Government to push increasingly for offshore windfarms, but these are more expensive and remain a relatively unproven technology.
The projected cost of one project, the London Array, has soared from £1 billion in 2003 to £3 billion. Many developers are also struggling because they have been locked out of the debt markets by the credit crunch.
The collapse in oil prices is also hampering the industry by making it less economically attractive than polluting fossil fuels.
The Government wants to build an unprecedented 33 gigawatts of wind power capacity by 2020 to help to meet Britain's carbon reduction targets, but sceptics question whether the 15,000 turbines will ever be built.
Thirty-three gigawatts represents one third of UK power generation and on some days it would be enough to power every home in the country. However, a lack of financial incentives, a trebling of costs since 2003 and now the falling price of oil are undermining confidence in the industry.
Several investors are shunning Britain in favour of the bigger subsidies and the more established investment climate available for onshore windfarms in Spain, Germany and the United States.
Developers also complain about the convoluted UK planning system and the difficulty of getting connections to the National Grid.
Such problems have encouraged the Government to push increasingly for offshore windfarms, but these are more expensive and remain a relatively unproven technology.
The projected cost of one project, the London Array, has soared from £1 billion in 2003 to £3 billion. Many developers are also struggling because they have been locked out of the debt markets by the credit crunch.
The collapse in oil prices is also hampering the industry by making it less economically attractive than polluting fossil fuels.
Setback for Government's green agenda as BP quits key projects
From The Times
November 8, 2008
Robin Pagnamenta, energy and environment editor
Government plans for Britain to become a world leader in clean energy technology suffered a double setback yesterday after BP said that it was abandoning the country's wind energy industry and pulling out of a competition to build a demonstration carbon-capture and storage plant.
The oil company informed the Government last week that it would no longer be submitting a bid for a government-funded scheme to develop a coal-fired power plant using carbon capture and storage (CCS), an experimental technology that strips out CO2 emissions for safe storage. The CCS competition was announced in November last year and is a key feature of the Government's plans to fight climate change while creating one million green-collar jobs in renewable energy.
A spokesman for BP, which announced record third-quarter profits of £6.4 billion last week, said that the group had withdrawn because it had struggled to find suitable partners.
“We came to the conclusion that we could no longer put together a winning consortium,” the spokesman said. He added that BP was dropping plans to invest in UK windfarm projects in favour of better returns in the industry in the United States.
BP's move triggered protests from green groups, which accused the company of abandoning its stated commitment to move “beyond petroleum”.
Keith Allott, the head of the climate change programme of WWF-UK, said: “It's deeply disappointing that one of Britain's leading companies in this field is choosing not to invest in the green energy revolution we so desperately need while continuing to invest in conventional hydrocarbons. It seems incompatible with the company's previous positioning of moving ‘beyond petroleum'.”
The development of CCS technology is considered a critical step in tackling climate change. In theory, CCS equipment could be retrofitted to existing coal-fired power stations around the world, allowing for rapid cuts in CO2 emissions. BP Alternative Energy had been on a shortlist of four companies that was announced in July. It included E.ON UK, which wants to deploy CCS technology at its proposed coal-fired power station at Kingsnorth, Kent, as well as Peel Holdings and ScottishPower.
By reducing the field to only three players, the withdrawal of BP represents a significant blow for the Government's competition.
A spokeswoman for the Department of Energy and Climate Change sought to play down the significance of BP's decision. “We continue to have three strong bidders who are committed to the project and to CCS,” she said. “BP's decision does not compromise the integrity of the competition.”
BP insisted that it remained committed to renewable energy throughout the world. “We remain very supportive of alternative energy technology and we continue to invest in hydrogen energy projects in Abu Dhabi and California,” a spokesman said.
Royal Dutch Shell, the largest UK company by market value, also withdrew from the UK wind energy industry this year, citing rising costs.
Compounding the problems facing the Government's CCS project, RWE npower is preparing to initiate a legal challenge over the selection process for the competition. Npower was excluded from the shortlist because of a technicality.
November 8, 2008
Robin Pagnamenta, energy and environment editor
Government plans for Britain to become a world leader in clean energy technology suffered a double setback yesterday after BP said that it was abandoning the country's wind energy industry and pulling out of a competition to build a demonstration carbon-capture and storage plant.
The oil company informed the Government last week that it would no longer be submitting a bid for a government-funded scheme to develop a coal-fired power plant using carbon capture and storage (CCS), an experimental technology that strips out CO2 emissions for safe storage. The CCS competition was announced in November last year and is a key feature of the Government's plans to fight climate change while creating one million green-collar jobs in renewable energy.
A spokesman for BP, which announced record third-quarter profits of £6.4 billion last week, said that the group had withdrawn because it had struggled to find suitable partners.
“We came to the conclusion that we could no longer put together a winning consortium,” the spokesman said. He added that BP was dropping plans to invest in UK windfarm projects in favour of better returns in the industry in the United States.
BP's move triggered protests from green groups, which accused the company of abandoning its stated commitment to move “beyond petroleum”.
Keith Allott, the head of the climate change programme of WWF-UK, said: “It's deeply disappointing that one of Britain's leading companies in this field is choosing not to invest in the green energy revolution we so desperately need while continuing to invest in conventional hydrocarbons. It seems incompatible with the company's previous positioning of moving ‘beyond petroleum'.”
The development of CCS technology is considered a critical step in tackling climate change. In theory, CCS equipment could be retrofitted to existing coal-fired power stations around the world, allowing for rapid cuts in CO2 emissions. BP Alternative Energy had been on a shortlist of four companies that was announced in July. It included E.ON UK, which wants to deploy CCS technology at its proposed coal-fired power station at Kingsnorth, Kent, as well as Peel Holdings and ScottishPower.
By reducing the field to only three players, the withdrawal of BP represents a significant blow for the Government's competition.
A spokeswoman for the Department of Energy and Climate Change sought to play down the significance of BP's decision. “We continue to have three strong bidders who are committed to the project and to CCS,” she said. “BP's decision does not compromise the integrity of the competition.”
BP insisted that it remained committed to renewable energy throughout the world. “We remain very supportive of alternative energy technology and we continue to invest in hydrogen energy projects in Abu Dhabi and California,” a spokesman said.
Royal Dutch Shell, the largest UK company by market value, also withdrew from the UK wind energy industry this year, citing rising costs.
Compounding the problems facing the Government's CCS project, RWE npower is preparing to initiate a legal challenge over the selection process for the competition. Npower was excluded from the shortlist because of a technicality.
Suzlon lifted by US green agenda
By Andrew Wood in Hong Kong
Published: November 8 2008 02:00
One of Asia's best-performing stocks this week as a result of Barack Obama's victory in the US presidential election was Suzlon , an Indian maker of wind-powered electricity generators.
Suzlon shares climbed 59 per cent to Rs70.6 - the biggest percentage gain among the 1,120 members of the FTSE Asia-Pacific index - on hopes that Mr Obama's enthusiasm for green power would translate into bigger profits for the sector.
It was a volatile week packed with interest rate cuts; central banks in India, Australia and South Korea joined in the global trend for loosening monetary policy.
The region broadly welcomed Mr Obama's victory, although pessimism about the outlook for the world economy resurfaced.
The FTSE Asia-Pacific index managed a 2 per cent rise over the week - a small but welcome bounce after the benchmark's 20.2 per cent decline in October.
That headline gain masked a range of performances by individual markets: the Nikkei 225 Average in Japan lost 4.9 per cent during the week but Thai stocks gained 11.4 per cent.
Hong Kong rose 2 per cent and Australian stocks edged up 0.8 per cent.
Gains in alternative energy stocks seemed to be one of the few clear themes.
South Korea's Yonghyun , a maker of parts for wind turbines, surged 49.2 per cent to Won14,450. Solargiga , which produces solar panels in mainland China, rose 23 per cent to HK$2.19. In spite of that rise, the company was still worth a quarter less than when it floated in Hong Kong in March.
GS Yuasa , a maker of rechargeable batteries, was the Nikkei 225's best performer. Its shares gained 41.5 per cent to Y351 in the week. Sanyo Electric , which also makes power storage devices, was next, rising 39 per cent to Y203, although its rally was more to do with talk that Panasonic would launch a takeover bid.
But as green-related stocks rose, carmakers suffered. Toyota Motor , the world's second-biggest carmaker, dropped by 13 per centyesterday after it cut its forecast for annual profit by two-thirds. Toyota ended the week with an 11.3 per cent loss at Y3,460.
Nissan Motor , which has scrapped its dividend, was the Nikkei's third-worst performer over the week. It fell 21.6 per cent to Y422. Honda , which said sales in the US would fall sharply, lost 18.1 per cent to Y2,260.
Hyundai Motor lost as much as 21 per cent during the week but a sharp rally for South Korean stocks yesterday after the Bank of Korea cut interest rates for the third time in a month meant Hyundai ended the week with a loss of 7.3 per cent at Won54,500.
One sign of calmer markets - in Hong Kong at least - was that volatility implied by three-month options on the Hang Seng index stayed below the level of volatility recorded for all of this week - the first time this has happened since June.
Copyright The Financial Times Limited 2008
Published: November 8 2008 02:00
One of Asia's best-performing stocks this week as a result of Barack Obama's victory in the US presidential election was Suzlon , an Indian maker of wind-powered electricity generators.
Suzlon shares climbed 59 per cent to Rs70.6 - the biggest percentage gain among the 1,120 members of the FTSE Asia-Pacific index - on hopes that Mr Obama's enthusiasm for green power would translate into bigger profits for the sector.
It was a volatile week packed with interest rate cuts; central banks in India, Australia and South Korea joined in the global trend for loosening monetary policy.
The region broadly welcomed Mr Obama's victory, although pessimism about the outlook for the world economy resurfaced.
The FTSE Asia-Pacific index managed a 2 per cent rise over the week - a small but welcome bounce after the benchmark's 20.2 per cent decline in October.
That headline gain masked a range of performances by individual markets: the Nikkei 225 Average in Japan lost 4.9 per cent during the week but Thai stocks gained 11.4 per cent.
Hong Kong rose 2 per cent and Australian stocks edged up 0.8 per cent.
Gains in alternative energy stocks seemed to be one of the few clear themes.
South Korea's Yonghyun , a maker of parts for wind turbines, surged 49.2 per cent to Won14,450. Solargiga , which produces solar panels in mainland China, rose 23 per cent to HK$2.19. In spite of that rise, the company was still worth a quarter less than when it floated in Hong Kong in March.
GS Yuasa , a maker of rechargeable batteries, was the Nikkei 225's best performer. Its shares gained 41.5 per cent to Y351 in the week. Sanyo Electric , which also makes power storage devices, was next, rising 39 per cent to Y203, although its rally was more to do with talk that Panasonic would launch a takeover bid.
But as green-related stocks rose, carmakers suffered. Toyota Motor , the world's second-biggest carmaker, dropped by 13 per centyesterday after it cut its forecast for annual profit by two-thirds. Toyota ended the week with an 11.3 per cent loss at Y3,460.
Nissan Motor , which has scrapped its dividend, was the Nikkei's third-worst performer over the week. It fell 21.6 per cent to Y422. Honda , which said sales in the US would fall sharply, lost 18.1 per cent to Y2,260.
Hyundai Motor lost as much as 21 per cent during the week but a sharp rally for South Korean stocks yesterday after the Bank of Korea cut interest rates for the third time in a month meant Hyundai ended the week with a loss of 7.3 per cent at Won54,500.
One sign of calmer markets - in Hong Kong at least - was that volatility implied by three-month options on the Hang Seng index stayed below the level of volatility recorded for all of this week - the first time this has happened since June.
Copyright The Financial Times Limited 2008
Does Green Energy Add 5 Million Jobs? Potent Pitch, but Numbers Are Squishy
By JEFFREY BALL
Calls for a clean-energy system in the U.S. have long met with sticker shock. Now, the cost of making the transition -- hundreds of billions of dollars -- is being touted as a selling point.
President-elect Barack Obama and his energy advisers have been making the case that a multibillion-dollar government investment in everything from wind turbines to a "smart" electrical grid is just what's needed to help revive the economy. The lure is millions of government-subsidized "green jobs."
On the campaign trail, Mr. Obama argued that spending $150 billion over the next decade to boost energy efficiency would help create five million jobs. The jobs would include insulation installers, to make houses more energy-efficient, wind-turbine builders, to displace coal-fired electricity, and construction workers, to build greener buildings and upgrade the electrical grid.
The numbers are debated by the Obama advisers themselves, and are likely to spark debate when Congress considers a stimulus package including green jobs. But a big government push, focused on jobs, may represent the best chance in years for renewable energy and energy efficiency to take root in the U.S., a voracious energy consumer.
"It's a terrible situation that we find ourselves in," says Bracken Hendricks, an energy adviser to Mr. Obama and a senior fellow at the Center for American Progress, a left-leaning Washington think tank. "But it's exciting that these issues are getting some attention."
The green-jobs argument rests on the notion that big capital investments in new-energy technology today will be more than offset by savings in reduced fossil-fuel costs. Though oil prices have fallen, the International Energy Agency predicted Thursday that once the economy picks up again, they will resume climbing, potentially topping $200 a barrel by 2030. The IEA called the current energy system "patently unsustainable" and called for "radical action by governments."
The added allure of clean-energy spending as economic stimulus is that the industry is relatively young and growing fast. Unlike the fossil-fuel industry, which has matured over decades, it is just starting to build its basic infrastructure -- wind turbines, solar panels and a more-sophisticated electric-transmission grid.
Several studies estimate that $1 invested in renewable energy or energy efficiency would yield up to four times as many jobs as $1 invested in oil and gas, whose basic infrastructure of wells, refineries and pipelines has been around for years. Moreover, those studies say, clean-energy jobs are likely to be centered in the U.S., unlike jobs in the oil and gas industry, which increasingly are spread around the world.
Critics say analyzing only new green jobs misses half the story.
"It's not looking at the other side of the coin: You are spending more money for your energy," says Anne Smith, a vice president at CRA International. The consulting firm wrote a report for the coal-mining industry in April that concluded that, under a bill to cap global-warming emissions, gains in green jobs would be "more than offset" by job losses elsewhere in the economy. That bill failed, but Mr. Obama has said he supports capping emissions.
The green-jobs argument isn't new. In the 1970s, amid an energy and economic crisis, President Jimmy Carter cited job creation as one reason for his calls to increase federal spending on renewable-energy research and development. But the argument has taken on new life in the past few years, as environmental activists have concluded that saving the planet isn't enough to make most Americans support higher government spending.
The job creation number cited by Mr. Obama has its roots in several green-jobs studies. Each projected different numbers, because each made different assumptions -- for instance, about the number of additional jobs that would be created by the spending of every person directly employed in a green job.
Robert Pollin, a professor at the University of Massachusetts, Amherst, who co-wrote another study, questions the job target touted by the Obama campaign, saying it would cost much more.
Mr. Pollin's study, sponsored by the Center for American Progress, came out in September, after green jobs had become a theme on the presidential campaign trail. It said that $100 billion spent over two years could produce two million green jobs.
Even Mr. Pollin's study assessed only the number of jobs that might be added if the government spent more money on clean energy. It didn't count jobs that might be lost elsewhere in the economy if the country shifted to costlier sources of energy.
Mr. Pollin says he's working on a fuller study now. He and other green-jobs advocates say that, on balance, shifting to cleaner sources of energy creates more jobs than it destroys.
The Apollo Alliance, a San Francisco coalition of environmental and labor groups, also released a study in September. It concluded that five million green jobs could be had with an investment of $500 billion -- more than three times Mr. Obama's number.
Kate Gordon, co-director of the Apollo Alliance, says the numbers are less important than the message. "Honestly," she says, "it's just to inspire people."
Write to Jeffrey Ball at jeffrey.ball@wsj.com
Calls for a clean-energy system in the U.S. have long met with sticker shock. Now, the cost of making the transition -- hundreds of billions of dollars -- is being touted as a selling point.
President-elect Barack Obama and his energy advisers have been making the case that a multibillion-dollar government investment in everything from wind turbines to a "smart" electrical grid is just what's needed to help revive the economy. The lure is millions of government-subsidized "green jobs."
On the campaign trail, Mr. Obama argued that spending $150 billion over the next decade to boost energy efficiency would help create five million jobs. The jobs would include insulation installers, to make houses more energy-efficient, wind-turbine builders, to displace coal-fired electricity, and construction workers, to build greener buildings and upgrade the electrical grid.
The numbers are debated by the Obama advisers themselves, and are likely to spark debate when Congress considers a stimulus package including green jobs. But a big government push, focused on jobs, may represent the best chance in years for renewable energy and energy efficiency to take root in the U.S., a voracious energy consumer.
"It's a terrible situation that we find ourselves in," says Bracken Hendricks, an energy adviser to Mr. Obama and a senior fellow at the Center for American Progress, a left-leaning Washington think tank. "But it's exciting that these issues are getting some attention."
The green-jobs argument rests on the notion that big capital investments in new-energy technology today will be more than offset by savings in reduced fossil-fuel costs. Though oil prices have fallen, the International Energy Agency predicted Thursday that once the economy picks up again, they will resume climbing, potentially topping $200 a barrel by 2030. The IEA called the current energy system "patently unsustainable" and called for "radical action by governments."
The added allure of clean-energy spending as economic stimulus is that the industry is relatively young and growing fast. Unlike the fossil-fuel industry, which has matured over decades, it is just starting to build its basic infrastructure -- wind turbines, solar panels and a more-sophisticated electric-transmission grid.
Several studies estimate that $1 invested in renewable energy or energy efficiency would yield up to four times as many jobs as $1 invested in oil and gas, whose basic infrastructure of wells, refineries and pipelines has been around for years. Moreover, those studies say, clean-energy jobs are likely to be centered in the U.S., unlike jobs in the oil and gas industry, which increasingly are spread around the world.
Critics say analyzing only new green jobs misses half the story.
"It's not looking at the other side of the coin: You are spending more money for your energy," says Anne Smith, a vice president at CRA International. The consulting firm wrote a report for the coal-mining industry in April that concluded that, under a bill to cap global-warming emissions, gains in green jobs would be "more than offset" by job losses elsewhere in the economy. That bill failed, but Mr. Obama has said he supports capping emissions.
The green-jobs argument isn't new. In the 1970s, amid an energy and economic crisis, President Jimmy Carter cited job creation as one reason for his calls to increase federal spending on renewable-energy research and development. But the argument has taken on new life in the past few years, as environmental activists have concluded that saving the planet isn't enough to make most Americans support higher government spending.
The job creation number cited by Mr. Obama has its roots in several green-jobs studies. Each projected different numbers, because each made different assumptions -- for instance, about the number of additional jobs that would be created by the spending of every person directly employed in a green job.
Robert Pollin, a professor at the University of Massachusetts, Amherst, who co-wrote another study, questions the job target touted by the Obama campaign, saying it would cost much more.
Mr. Pollin's study, sponsored by the Center for American Progress, came out in September, after green jobs had become a theme on the presidential campaign trail. It said that $100 billion spent over two years could produce two million green jobs.
Even Mr. Pollin's study assessed only the number of jobs that might be added if the government spent more money on clean energy. It didn't count jobs that might be lost elsewhere in the economy if the country shifted to costlier sources of energy.
Mr. Pollin says he's working on a fuller study now. He and other green-jobs advocates say that, on balance, shifting to cleaner sources of energy creates more jobs than it destroys.
The Apollo Alliance, a San Francisco coalition of environmental and labor groups, also released a study in September. It concluded that five million green jobs could be had with an investment of $500 billion -- more than three times Mr. Obama's number.
Kate Gordon, co-director of the Apollo Alliance, says the numbers are less important than the message. "Honestly," she says, "it's just to inspire people."
Write to Jeffrey Ball at jeffrey.ball@wsj.com
Green corridor plans take root
Published Date: 07 November 2008
By Ian Swanson
PLANS for "green corridors" across Edinburgh and the Lothians have been unveiled as part of a bid to preserve the area's woodlands and save threatened species.
The scheme, promoted jointly by the councils in Lothian and national environmental bodies, will encourage landowners and community groups to carry out new planting and improve existing woodlands.They will be encouraged to apply for grants worth thousands of pounds to expand green areas.New advice will also be available to planners and developers on increasing green spaces and managing woodlands.City council environment leader Robert Aldridge said: "We want to encourage people to enjoy the environment and for the natural woodland habitat to grow can only benefit the area's excellent environmental reputation."Areas named for potential inclusion in the Edinburgh and Lothians Forest Habitat Network include Armadale, West Livingston, Winchburgh, Broxburn, Newbridge, Calderwood, Edinburgh Park, Granton, Musselburgh, Shawfair, the A701 Corridor, A7 Corridor, Wallyford, Blindwells, Haddington, Dunbar and North Berwick.Ian Whitehead, the network partnership's project officer, said: "We're not saying we're going to go in and plant huge bands of woodland. But through grants and incentives we may be able to increase woodland cover and natural habitats."He added: "As areas become fragmented, we run the risk of species disappearing. These could all be threatened if habitat is not properly managed. We want to bring people and wildlife together. The green areas will serve as corridors for people to walk and enjoy the outdoors. It could help deal with some of the health issues we have in Scotland."He said he would be approaching landowners and others to make them aware of grants available through the Forestry Commission, Scottish Natural Heritage and other agencies, and running workshops on the subject.The network partnership is currently drafting a forestry framework for the region which will outline strategic objectives for forestry over the next 40 years.The partnership brings together the Forestry Commission, SNH, Edinburgh, East, West and Midlothian councils, Edinburgh and Lothians Greenspace Trust, Central Scotland Forest Trust and Woodland Trust Scotland.Speaking at the launch in Edinburgh City Chambers, Environment Minister Michael Russell, said: "We are all aware of the issues that arise from development and environmental pressures on our woodland areas."These pressures are only going to increase as climate change makes itself felt, so it is important we take every opportunity to help foster stronger, healthier and more diverse natural environments."Encouraging small-scale tree planting projects will provide significant benefits for biodiversity."Managing and expanding existing woodland will also help to create greener urban landscapes where people want to live and work, and where they can enjoy more education, leisure and recreation opportunities."
By Ian Swanson
PLANS for "green corridors" across Edinburgh and the Lothians have been unveiled as part of a bid to preserve the area's woodlands and save threatened species.
The scheme, promoted jointly by the councils in Lothian and national environmental bodies, will encourage landowners and community groups to carry out new planting and improve existing woodlands.They will be encouraged to apply for grants worth thousands of pounds to expand green areas.New advice will also be available to planners and developers on increasing green spaces and managing woodlands.City council environment leader Robert Aldridge said: "We want to encourage people to enjoy the environment and for the natural woodland habitat to grow can only benefit the area's excellent environmental reputation."Areas named for potential inclusion in the Edinburgh and Lothians Forest Habitat Network include Armadale, West Livingston, Winchburgh, Broxburn, Newbridge, Calderwood, Edinburgh Park, Granton, Musselburgh, Shawfair, the A701 Corridor, A7 Corridor, Wallyford, Blindwells, Haddington, Dunbar and North Berwick.Ian Whitehead, the network partnership's project officer, said: "We're not saying we're going to go in and plant huge bands of woodland. But through grants and incentives we may be able to increase woodland cover and natural habitats."He added: "As areas become fragmented, we run the risk of species disappearing. These could all be threatened if habitat is not properly managed. We want to bring people and wildlife together. The green areas will serve as corridors for people to walk and enjoy the outdoors. It could help deal with some of the health issues we have in Scotland."He said he would be approaching landowners and others to make them aware of grants available through the Forestry Commission, Scottish Natural Heritage and other agencies, and running workshops on the subject.The network partnership is currently drafting a forestry framework for the region which will outline strategic objectives for forestry over the next 40 years.The partnership brings together the Forestry Commission, SNH, Edinburgh, East, West and Midlothian councils, Edinburgh and Lothians Greenspace Trust, Central Scotland Forest Trust and Woodland Trust Scotland.Speaking at the launch in Edinburgh City Chambers, Environment Minister Michael Russell, said: "We are all aware of the issues that arise from development and environmental pressures on our woodland areas."These pressures are only going to increase as climate change makes itself felt, so it is important we take every opportunity to help foster stronger, healthier and more diverse natural environments."Encouraging small-scale tree planting projects will provide significant benefits for biodiversity."Managing and expanding existing woodland will also help to create greener urban landscapes where people want to live and work, and where they can enjoy more education, leisure and recreation opportunities."
Can a chauffeur company ever be green?
Ecochauffeur is one of several companies aiming to capitalise on the demand for more environmentally friendly alternatives to gas-guzzlers
Mark Frary
If you think about chauffeur services, you tend to summon up an image of huge gas guzzling limos rather than something environmentally friendly. Yet that may be about to change thanks to Ecochauffeur, an offshoot of established chauffeur company iChauffeur.
Ecochauffeur was launched in early 2006 to fill what the company perceived was a gap in the market. The company’s director Will Senior says: “We felt there was a gaping opportunity for us commercially which could also lead the way for hybrid and other alternatively-fuelled vehicles to become more commonplace in the chauffeur industry. It was partly an experiment to see if our customers would take to hybrid technologies and also because we felt it was the right thing to do for our children and grandchildren.”
Ecochauffeur uses Lexus GS 450h SE-L Hybrids - with huge battery packs in the boot which makes too much luggage something of a problem – rather than industry standard Mercedes-Benzes and BMWs to transport its clients. Senior says that the car averages around 25 miles per gallon, which makes it approximately 25% more cost effective on fuel and 40% more cost effective on maintenance than the industry standard S-Class Mercedes.
Despite its green credentials, the Lexus Hybrid is not a boring car to drive, says Senior. “Lexus have made this car as a performance hybrid; it will out-accelerate a Ferrari Testarossa over a quarter of a mile and can do 0-60 in 5.2 seconds and 131 miles per hour.”
As well as the car itself, the company has invested in both carbon offsetting through Climate Care and training its chauffeurs in environmentally friendly driving techniques. “What we have learnt is that more important than the vehicle is the driver. A smooth, environmentally conscious chauffeur is more important than the car. It's not so much what you drive it's how you drive that is crucial. If driven nicely even notorious carbon dioxide emitting Bentley Continentals can produce reasonable fuel economy. Our cars all are designed to carry three or four passengers in comfort. Even a Toyota Prius will suffer when heavily laden, and with drivers with heavy right feet. Our traditional cars on paper might be as frugal as a Prius but thanks to our training and vehicle tracking the differences in fuel emissions are less than you might think.”
Ecochauffeur is not the only company with an environmentally friendly fleet. London’s Pink Express started using the Toyota Prius hybrid in its passenger car fleet in 2006. Fly Wheels also has the Prius among its vehicles.
Last year, east London based Chauffeur First added up to 25 Lexuses (or, as Alan Partridge might say, Lexi) to its fleet. At the time, the company’s Alex Bell said: “Executives have traditionally been driven around in black cabs and gas-guzzling cars.”
Back at Ecochauffeur, Will Senior admits that the green chauffeur idea has not yet captured the imagination of all of the company’s clients – which include Deutsche Bank, BAA and champagne house Moet & Hennessy – despite being 20% cheaper to hire.
“We have had very few individuals and companies really embrace the benefits of a hybrid chauffeur car service,” says Senior. “So at the moment the reality is that the S-class Mercedes, BMW 7 series, Range Rover, Bentley Continental Flying Spur and Rolls-Royce Phantom make up the majority of our fleet. Having said that, the Lexus has proved very popular with some high-profile celebrities and in particular Deborah Meaden from the Dragon's Den who has become a very valuable customer.”
Senior also believes that his fledgling green chauffeur business might start to suffer because of the economy. “Now that the economy is in a slump, I think monetary matters will again take precedence over green issues,” he admits with a sigh.
Mark Frary
If you think about chauffeur services, you tend to summon up an image of huge gas guzzling limos rather than something environmentally friendly. Yet that may be about to change thanks to Ecochauffeur, an offshoot of established chauffeur company iChauffeur.
Ecochauffeur was launched in early 2006 to fill what the company perceived was a gap in the market. The company’s director Will Senior says: “We felt there was a gaping opportunity for us commercially which could also lead the way for hybrid and other alternatively-fuelled vehicles to become more commonplace in the chauffeur industry. It was partly an experiment to see if our customers would take to hybrid technologies and also because we felt it was the right thing to do for our children and grandchildren.”
Ecochauffeur uses Lexus GS 450h SE-L Hybrids - with huge battery packs in the boot which makes too much luggage something of a problem – rather than industry standard Mercedes-Benzes and BMWs to transport its clients. Senior says that the car averages around 25 miles per gallon, which makes it approximately 25% more cost effective on fuel and 40% more cost effective on maintenance than the industry standard S-Class Mercedes.
Despite its green credentials, the Lexus Hybrid is not a boring car to drive, says Senior. “Lexus have made this car as a performance hybrid; it will out-accelerate a Ferrari Testarossa over a quarter of a mile and can do 0-60 in 5.2 seconds and 131 miles per hour.”
As well as the car itself, the company has invested in both carbon offsetting through Climate Care and training its chauffeurs in environmentally friendly driving techniques. “What we have learnt is that more important than the vehicle is the driver. A smooth, environmentally conscious chauffeur is more important than the car. It's not so much what you drive it's how you drive that is crucial. If driven nicely even notorious carbon dioxide emitting Bentley Continentals can produce reasonable fuel economy. Our cars all are designed to carry three or four passengers in comfort. Even a Toyota Prius will suffer when heavily laden, and with drivers with heavy right feet. Our traditional cars on paper might be as frugal as a Prius but thanks to our training and vehicle tracking the differences in fuel emissions are less than you might think.”
Ecochauffeur is not the only company with an environmentally friendly fleet. London’s Pink Express started using the Toyota Prius hybrid in its passenger car fleet in 2006. Fly Wheels also has the Prius among its vehicles.
Last year, east London based Chauffeur First added up to 25 Lexuses (or, as Alan Partridge might say, Lexi) to its fleet. At the time, the company’s Alex Bell said: “Executives have traditionally been driven around in black cabs and gas-guzzling cars.”
Back at Ecochauffeur, Will Senior admits that the green chauffeur idea has not yet captured the imagination of all of the company’s clients – which include Deutsche Bank, BAA and champagne house Moet & Hennessy – despite being 20% cheaper to hire.
“We have had very few individuals and companies really embrace the benefits of a hybrid chauffeur car service,” says Senior. “So at the moment the reality is that the S-class Mercedes, BMW 7 series, Range Rover, Bentley Continental Flying Spur and Rolls-Royce Phantom make up the majority of our fleet. Having said that, the Lexus has proved very popular with some high-profile celebrities and in particular Deborah Meaden from the Dragon's Den who has become a very valuable customer.”
Senior also believes that his fledgling green chauffeur business might start to suffer because of the economy. “Now that the economy is in a slump, I think monetary matters will again take precedence over green issues,” he admits with a sigh.
Lights out: activists are showing the darker side of Paris
Environmentalists act to curb energy waste
Adam Sage in Paris
Waving a broomstick above his head, Maxime leaps up and down on a pavement in Central Paris. Is he mad, passers-by wonder, or drunk? No, his comrades explain, he is seeking to cut the global demand for energy.
Meet Le Clan du Néon, an increasingly popular environmental movement that wants to make the City of Lights a little darker. One tactic is to turn off neon shop signs at night by reaching the external fire switches that control them, usually found two or three metres up the façade.
“The signs are a waste of electricity and a visual pollution,” said Michael, a 27-year-old engineer, as Maxime used the broom to flick a switch above Aigle Azur, a travel agency, and plunge the shopfront into darkness.
“It’s crazy that when we all need to save energy, these neon signs are left on for 24 hours day,” he added.
Le Clan was set up in Paris, but its light-hearted and low-tech activist approach to ecology has been a hit across the country with students, many of whom see the antineon activity as a nocturnal lark. Groups have sprung up in Normandy, Bordeaux, the Alps and Dordogne. Members from the latter have posted an internet video that says that in a region bereft of night life, turning out the high street lighting is as good a way of passing the time as any.
“It’s true a lot of people do it for fun,” Michael said, “but at the same time, it’s important.”
The thousands of shop signs left on at night in Europe consume tens of gigawatt hours of electricity a year. In France, where the nuclear industry supplies 80 per cent of electricity, the result is more radioactive waste. Elsewhere, it is hundreds of tonnes of CO2 emissions. “If all the neon signs in the world were turned off, the impact on global warming would be very significant,” said Nicolas, 28, another Le Clan member. “There ought to be a law against it, but since there isn’t, we have to go around doing it ourselves.”
The evening action started at 11pm in Place de la République, where Michael shimmied up a drainpipe to turn off the red sign of Nouvelles Frontières, another travel agent. Nicolas then climbed on Maxime’s back to switch off the 26 neon tubes of Salon Régence, which organises wedding receptions. Then the lights went out at Société Générale and BNP Paribas, the French banks.
“This is fun,” said a middle-aged man who stopped to watch. “Can we come with you?”
“But is it legal?” asked his wife. “I can’t imagine the shopkeepers are going to be very happy.” Le Clan assured her it was and Maxime, 27, ran across the road and stretched the broom up to switch off an hotel sign.
Not everyone was smiling. The owner of Le Dogon, a restaurant, stormed out to berate the group. “How are tourists going to find the hotel now?” he demanded. “You can’t do anything in this country any more because of all these people with a cause to defend.”
Adam Sage in Paris
Waving a broomstick above his head, Maxime leaps up and down on a pavement in Central Paris. Is he mad, passers-by wonder, or drunk? No, his comrades explain, he is seeking to cut the global demand for energy.
Meet Le Clan du Néon, an increasingly popular environmental movement that wants to make the City of Lights a little darker. One tactic is to turn off neon shop signs at night by reaching the external fire switches that control them, usually found two or three metres up the façade.
“The signs are a waste of electricity and a visual pollution,” said Michael, a 27-year-old engineer, as Maxime used the broom to flick a switch above Aigle Azur, a travel agency, and plunge the shopfront into darkness.
“It’s crazy that when we all need to save energy, these neon signs are left on for 24 hours day,” he added.
Le Clan was set up in Paris, but its light-hearted and low-tech activist approach to ecology has been a hit across the country with students, many of whom see the antineon activity as a nocturnal lark. Groups have sprung up in Normandy, Bordeaux, the Alps and Dordogne. Members from the latter have posted an internet video that says that in a region bereft of night life, turning out the high street lighting is as good a way of passing the time as any.
“It’s true a lot of people do it for fun,” Michael said, “but at the same time, it’s important.”
The thousands of shop signs left on at night in Europe consume tens of gigawatt hours of electricity a year. In France, where the nuclear industry supplies 80 per cent of electricity, the result is more radioactive waste. Elsewhere, it is hundreds of tonnes of CO2 emissions. “If all the neon signs in the world were turned off, the impact on global warming would be very significant,” said Nicolas, 28, another Le Clan member. “There ought to be a law against it, but since there isn’t, we have to go around doing it ourselves.”
The evening action started at 11pm in Place de la République, where Michael shimmied up a drainpipe to turn off the red sign of Nouvelles Frontières, another travel agent. Nicolas then climbed on Maxime’s back to switch off the 26 neon tubes of Salon Régence, which organises wedding receptions. Then the lights went out at Société Générale and BNP Paribas, the French banks.
“This is fun,” said a middle-aged man who stopped to watch. “Can we come with you?”
“But is it legal?” asked his wife. “I can’t imagine the shopkeepers are going to be very happy.” Le Clan assured her it was and Maxime, 27, ran across the road and stretched the broom up to switch off an hotel sign.
Not everyone was smiling. The owner of Le Dogon, a restaurant, stormed out to berate the group. “How are tourists going to find the hotel now?” he demanded. “You can’t do anything in this country any more because of all these people with a cause to defend.”
Hoping for investments to go up in smoke
By Alice Ross
Published: November 8 2008 02:00
Retail investors are for the first time able to gain access to the fast-growing carbon futures market, with the launch of a new product.
ETF Securities has launched an exchange traded commodity that tracks the price of carbon allowances in the European market.
Carbon trading was introduced in the EU in 2005 as a way of encouraging energy companies to reduce their emissions. Companies are allocated a certain number of allowances and are able to sell those they do not need.
There are two main schemes: the European scheme, which uses EU allowance (EUA) credits, and the UN scheme under the Kyoto protocol, which uses carbon emission reduction credits, or CERs.
Until recently, the two schemes had very limited trading with each other - but in the past month the market has opened up.
As yet, retail investors have not piled into the carbon credit market. In part, this is because of the perceived complexity. "No one in the advice industry really understands carbon trading," says Mark Hoskin at Holden & Partners, the ethical financial planners.
The pricing of carbon credits is dependent on various factors. First, there is the political risk - as the whole scheme is entirely dependent on government support.
"Carbon assets are a construct of the political process and their pricing is impacted by changes in that political process," notes James Thompson, chief financial officer at EcoSecurities, a global carbon credit trader.
The price differential between coal and gas is another concern. Oil price rises often cause natural gas to rise, making coal a cheaper option for energy companies and thereby increasing demand for EUAs.
The lack of retail products is also a factor. Before now, private investors could only gain indirect access to the carbon trading market. One way is to invest in companies that are acting as a gobetween for developing world projects and western energy companies.
The UN system of credits, or CERs, operates by giving credits to companies in developing countries that are engaged in emission offsetting activities. They can then sell these to developed companies in the west.
EcoSecurities, for example, helps companies in China and India to get registered with the UN in return for their carbon credits, which it trades on the stock market.
Hoskin also puts his clients into Trading Emissions, an Aim-listed stock that invests in carbon credits.
And Deutsche Bank Group offers the DWS CO 2 Opportunities fund, which invests in structured products with exposure to carbon credits. However, Hoskin says investors should be aware that because this fund is not registered in the UK, it is not eligible for capital gains tax relief.
The ETFS product offers a more direct way for private investors to become involved in the carbon market. It is Europe's first carbon ETC and will track the ICE ECX EUA Futures Contract, the carbon emissions futures contract.
The outlook for the carbon futures market is mixed. On the one hand, the system of trading emissions allowances is expected to grow worldwide. Barack Obama, the US president-elect, has given his support to a cap and trade system. Last month, the UK's climate change bill proposed resetting the targets to cut emissions by 2050 from 60 per cent of 1990 levels to 80 per cent.
And governments have an interest in ensuring the carbon price is strong, says Hoskin, as they need it to act as an incentive for companies to change their businesses.
Drax, the power generator that is heavily dependent on coal, reported a 45 per cent fall in profits in the first half of this year thanks in part to more expensive carbon emissions permits.
Yet the price of carbon credits has crashed this year along with the wider stock market.
ECX CFI Futures Contracts fell from a peak of €29.33 on July 1 to €17.40 on October 28.
Others fear that a recession in Europe may lower the price of carbon futures, as companies will slow production, causing emissions to fall, meaning there will be less demand for extra credits.
"In the near term, it's quite possible more and more industrial companies who have as many certificates as they need will see their output drop and won't need any more," says Alessandro Vitelli, director of strategy at IDEACarbon, the carbon analysts.
But he does not expect the price to collapse completely, as happened in the first phase of the EUA system from 2005 to 2007, when too many credits were allocated to companies.
IDEACarbon predicts the floor for EUA contracts is about €15. Currently, the price is around €18. Vitelli expects the market to reach this floor between now and mid-2009.
But, he says, the longer- term pressure on prices going up remains stable. "Everyone is working towards the 2020 target of a 20 per cent reduction in emissions. That assumes a lot of investment going into low carbon emissions." Consequently, he believes the price will climb again to between €29 and €30 after 2009.
"We're closer to what we think is the floor price than what we think is the ceiling price for sure," says Vitelli. "If a private investor wants to get into the market and ride it for a while, then getting in at €16/17 would be a good idea."
Copyright The Financial Times Limited 2008
Published: November 8 2008 02:00
Retail investors are for the first time able to gain access to the fast-growing carbon futures market, with the launch of a new product.
ETF Securities has launched an exchange traded commodity that tracks the price of carbon allowances in the European market.
Carbon trading was introduced in the EU in 2005 as a way of encouraging energy companies to reduce their emissions. Companies are allocated a certain number of allowances and are able to sell those they do not need.
There are two main schemes: the European scheme, which uses EU allowance (EUA) credits, and the UN scheme under the Kyoto protocol, which uses carbon emission reduction credits, or CERs.
Until recently, the two schemes had very limited trading with each other - but in the past month the market has opened up.
As yet, retail investors have not piled into the carbon credit market. In part, this is because of the perceived complexity. "No one in the advice industry really understands carbon trading," says Mark Hoskin at Holden & Partners, the ethical financial planners.
The pricing of carbon credits is dependent on various factors. First, there is the political risk - as the whole scheme is entirely dependent on government support.
"Carbon assets are a construct of the political process and their pricing is impacted by changes in that political process," notes James Thompson, chief financial officer at EcoSecurities, a global carbon credit trader.
The price differential between coal and gas is another concern. Oil price rises often cause natural gas to rise, making coal a cheaper option for energy companies and thereby increasing demand for EUAs.
The lack of retail products is also a factor. Before now, private investors could only gain indirect access to the carbon trading market. One way is to invest in companies that are acting as a gobetween for developing world projects and western energy companies.
The UN system of credits, or CERs, operates by giving credits to companies in developing countries that are engaged in emission offsetting activities. They can then sell these to developed companies in the west.
EcoSecurities, for example, helps companies in China and India to get registered with the UN in return for their carbon credits, which it trades on the stock market.
Hoskin also puts his clients into Trading Emissions, an Aim-listed stock that invests in carbon credits.
And Deutsche Bank Group offers the DWS CO 2 Opportunities fund, which invests in structured products with exposure to carbon credits. However, Hoskin says investors should be aware that because this fund is not registered in the UK, it is not eligible for capital gains tax relief.
The ETFS product offers a more direct way for private investors to become involved in the carbon market. It is Europe's first carbon ETC and will track the ICE ECX EUA Futures Contract, the carbon emissions futures contract.
The outlook for the carbon futures market is mixed. On the one hand, the system of trading emissions allowances is expected to grow worldwide. Barack Obama, the US president-elect, has given his support to a cap and trade system. Last month, the UK's climate change bill proposed resetting the targets to cut emissions by 2050 from 60 per cent of 1990 levels to 80 per cent.
And governments have an interest in ensuring the carbon price is strong, says Hoskin, as they need it to act as an incentive for companies to change their businesses.
Drax, the power generator that is heavily dependent on coal, reported a 45 per cent fall in profits in the first half of this year thanks in part to more expensive carbon emissions permits.
Yet the price of carbon credits has crashed this year along with the wider stock market.
ECX CFI Futures Contracts fell from a peak of €29.33 on July 1 to €17.40 on October 28.
Others fear that a recession in Europe may lower the price of carbon futures, as companies will slow production, causing emissions to fall, meaning there will be less demand for extra credits.
"In the near term, it's quite possible more and more industrial companies who have as many certificates as they need will see their output drop and won't need any more," says Alessandro Vitelli, director of strategy at IDEACarbon, the carbon analysts.
But he does not expect the price to collapse completely, as happened in the first phase of the EUA system from 2005 to 2007, when too many credits were allocated to companies.
IDEACarbon predicts the floor for EUA contracts is about €15. Currently, the price is around €18. Vitelli expects the market to reach this floor between now and mid-2009.
But, he says, the longer- term pressure on prices going up remains stable. "Everyone is working towards the 2020 target of a 20 per cent reduction in emissions. That assumes a lot of investment going into low carbon emissions." Consequently, he believes the price will climb again to between €29 and €30 after 2009.
"We're closer to what we think is the floor price than what we think is the ceiling price for sure," says Vitelli. "If a private investor wants to get into the market and ride it for a while, then getting in at €16/17 would be a good idea."
Copyright The Financial Times Limited 2008
Clean campaign gathers traction
By Claire Adler
Published: November 8 2008 02:00
In 2004, a report by Earthworks, the US mining watch group, and Oxfam America, entitled Dirty Metals, laid out the endemic dangers of gold mining. It makes for disturbing reading. It revealed that arsenic emissions, cyanide and mercury poisoning, excess water and energy consumption, child labour, the spread of HIV and environmental damage were rife in the gold mining process.
In open-cast mining, cyanide is poured on to the land, drawing out not just gold but toxic substances such as arsenic. In one accident, a toxic leak at a Romanian mine led to 2,000 tonnes of fish being killed.
In countries as diverse as Ghana, Indonesia, the US and Peru, gold mining operations have displaced people from their land. Gold mining affects communities on every continent except Antarctica. The average 18 carat gold wedding ring leaves in its wake 20 tons of mine waste. "Two-thirds of jewellery manufacturing today takes place in developing countries. In India alone, there are 700,000 people employed by the diamond industry, with an average of 10 dependants each," says Michael Allchin, chief executive at the Birmingham Assay Office.
Gold's complex supply system means it is almost impossible to label where it has come from. "Gold's supply chain consists of five unconnected industries - mining, refining, manufacturing, wholesale and retailing - four of which are not consumer-facing and therefore far less motivated to prove their ethical standards," said Gordon Hamme, editor of The Goldsmith magazine, presenting his research at a debate at September's international jewellery trade show in London. "The ultimate proof came in June when miners Anglo American defied international pressure and invested £200m in Zimbabwe - one of the most vicious, nasty and murderous regimes in the world."
The Dirty Metals report kick-started a broad industry response. In 2004, Tiffany was the first big jeweller to take a stance, calling for reform by opposing a silver mine which threatened local wildlife in an open letter advertisement in the Washington Post. In recent years. Tiffany has bought most of its gold and silver from an American Rio Tinto mine on the basis that Rio Tinto can account for its provenance. Tiffany, Piaget, Van Cleef & Arpels, Zale, Cartier and the Signet Group, among others, also abide by "the golden rules" set forth by the No Dirty Gold campaign established by Earthworks and Oxfam America. The rules prioritise human rights, safe working conditions and the protection of local communities and ecosystems. The campaign also urges the general public to sign up to an online petition. The No Dirty Gold website estimates that, in South Africa, one worker dies and 12 others are injured for every ton of gold produced.
In 2005, Cartier, Tiffany, Rio Tinto, Signet Group, CIBJO - the world jewellery confederation - BHP Billiton and the Diamond Trading Company were among 15 co-founders of the Council for Responsible Jewellery Practices. The organisation now has almost 100 members, all committed to tackling business ethics, human rights, labour standards and environmental performance.
There is now a widely held belief that the market is ripe for ethical products. Many feel that consumers are willing to pay a premium for them. Stephen d'Esposito, Earthworks president, recently toured the Canadian Mammoth Tusk Gold mine - a gold mine operating economically and environmentally sustainable processes. He observed that demand for responsibly sourced gold exceeds supply and predicts this disparity will grow.
Meanwhile, Fabergé is planning a comeback in the form of an ethical luxury jewellery brand. London-listed Gemfield Resources will use the Fabergé name to adorn precious coloured stones, available from next year, which will be individually numbered to provide a guarantee of ethical sourcing. Earlier this year, Walmart, the US supermarket chain, introduced a sell-out line of Love Earth jewellery, which is responsibly sourced from Rio Tinto mines. Walmart now plans an ethically sourced diamond collection and claims 10 per cent of all jewellery it sells will come from a traceable source by 2010.
A handful of independent retailers and designers such as Cred Jewellery, Pippa Small and Green Karat are going against the tide, attempting to produce jewellery using an ethically responsible supply chain.
The issues surrounding ethical gold are nothing new to Chichester jeweller Greg Valerio, who in the mid-1990s founded Cred Jewellery. His first attempts to sell fair trade accessories were a miserable failure, except for one item - a gold wedding ring. Today, he specialises in wedding jewellery, working with the Green Gold co-operative in Colombia to ensure that the metal and gem mining for his jewellery involves restoring and reforesting mined land, avoids toxic chemicals that pollute rivers or cause brain damage, and rejects child labour.
Working towards Fair Trade accreditation, Mr Valerio has set up the Cred Foundation which funds international humanitarian projects. He is also a founder of ARM (the Association for Responsible Mining) which works to make clean gold a real consumer option.
"Social and environmental justice are integral parts of our shared humanity and should therefore be central to all company policy," he says.
Still, leading British gold- and silversmith Martin Pugh, whose cutlery can be found in the private collection at 10 Downing Street, recently bemoaned the difficulty of acquiring ethical gold in small quantities.
He is not alone. Other small-scale users of gold such as Bristol-based designer and retailer Diana Porter believe heavyweights such as Wal-Mart should share their knowledge.
Copyright The Financial Times Limited 2008
Published: November 8 2008 02:00
In 2004, a report by Earthworks, the US mining watch group, and Oxfam America, entitled Dirty Metals, laid out the endemic dangers of gold mining. It makes for disturbing reading. It revealed that arsenic emissions, cyanide and mercury poisoning, excess water and energy consumption, child labour, the spread of HIV and environmental damage were rife in the gold mining process.
In open-cast mining, cyanide is poured on to the land, drawing out not just gold but toxic substances such as arsenic. In one accident, a toxic leak at a Romanian mine led to 2,000 tonnes of fish being killed.
In countries as diverse as Ghana, Indonesia, the US and Peru, gold mining operations have displaced people from their land. Gold mining affects communities on every continent except Antarctica. The average 18 carat gold wedding ring leaves in its wake 20 tons of mine waste. "Two-thirds of jewellery manufacturing today takes place in developing countries. In India alone, there are 700,000 people employed by the diamond industry, with an average of 10 dependants each," says Michael Allchin, chief executive at the Birmingham Assay Office.
Gold's complex supply system means it is almost impossible to label where it has come from. "Gold's supply chain consists of five unconnected industries - mining, refining, manufacturing, wholesale and retailing - four of which are not consumer-facing and therefore far less motivated to prove their ethical standards," said Gordon Hamme, editor of The Goldsmith magazine, presenting his research at a debate at September's international jewellery trade show in London. "The ultimate proof came in June when miners Anglo American defied international pressure and invested £200m in Zimbabwe - one of the most vicious, nasty and murderous regimes in the world."
The Dirty Metals report kick-started a broad industry response. In 2004, Tiffany was the first big jeweller to take a stance, calling for reform by opposing a silver mine which threatened local wildlife in an open letter advertisement in the Washington Post. In recent years. Tiffany has bought most of its gold and silver from an American Rio Tinto mine on the basis that Rio Tinto can account for its provenance. Tiffany, Piaget, Van Cleef & Arpels, Zale, Cartier and the Signet Group, among others, also abide by "the golden rules" set forth by the No Dirty Gold campaign established by Earthworks and Oxfam America. The rules prioritise human rights, safe working conditions and the protection of local communities and ecosystems. The campaign also urges the general public to sign up to an online petition. The No Dirty Gold website estimates that, in South Africa, one worker dies and 12 others are injured for every ton of gold produced.
In 2005, Cartier, Tiffany, Rio Tinto, Signet Group, CIBJO - the world jewellery confederation - BHP Billiton and the Diamond Trading Company were among 15 co-founders of the Council for Responsible Jewellery Practices. The organisation now has almost 100 members, all committed to tackling business ethics, human rights, labour standards and environmental performance.
There is now a widely held belief that the market is ripe for ethical products. Many feel that consumers are willing to pay a premium for them. Stephen d'Esposito, Earthworks president, recently toured the Canadian Mammoth Tusk Gold mine - a gold mine operating economically and environmentally sustainable processes. He observed that demand for responsibly sourced gold exceeds supply and predicts this disparity will grow.
Meanwhile, Fabergé is planning a comeback in the form of an ethical luxury jewellery brand. London-listed Gemfield Resources will use the Fabergé name to adorn precious coloured stones, available from next year, which will be individually numbered to provide a guarantee of ethical sourcing. Earlier this year, Walmart, the US supermarket chain, introduced a sell-out line of Love Earth jewellery, which is responsibly sourced from Rio Tinto mines. Walmart now plans an ethically sourced diamond collection and claims 10 per cent of all jewellery it sells will come from a traceable source by 2010.
A handful of independent retailers and designers such as Cred Jewellery, Pippa Small and Green Karat are going against the tide, attempting to produce jewellery using an ethically responsible supply chain.
The issues surrounding ethical gold are nothing new to Chichester jeweller Greg Valerio, who in the mid-1990s founded Cred Jewellery. His first attempts to sell fair trade accessories were a miserable failure, except for one item - a gold wedding ring. Today, he specialises in wedding jewellery, working with the Green Gold co-operative in Colombia to ensure that the metal and gem mining for his jewellery involves restoring and reforesting mined land, avoids toxic chemicals that pollute rivers or cause brain damage, and rejects child labour.
Working towards Fair Trade accreditation, Mr Valerio has set up the Cred Foundation which funds international humanitarian projects. He is also a founder of ARM (the Association for Responsible Mining) which works to make clean gold a real consumer option.
"Social and environmental justice are integral parts of our shared humanity and should therefore be central to all company policy," he says.
Still, leading British gold- and silversmith Martin Pugh, whose cutlery can be found in the private collection at 10 Downing Street, recently bemoaned the difficulty of acquiring ethical gold in small quantities.
He is not alone. Other small-scale users of gold such as Bristol-based designer and retailer Diana Porter believe heavyweights such as Wal-Mart should share their knowledge.
Copyright The Financial Times Limited 2008
Wen tells west to boost climate efforts
By Geoff Dyer in Beijing
Published: November 7 2008 17:02
The developed world should abandon its “unsustainable lifestyle” and do more to help poor nations adapt to climate change, Wen Jiabao, the Chinese premier, said on Friday.
The slowdown in the global economy caused by the financial crisis should not be allowed to hamper efforts to deal with global warming, said Mr Wen, and more technology should be transferred to poorer countries.
“It took developed countries several decades to solve the problems of saving energy and cutting emissions, while China has to solve the same problem in a much shorter period. So the difficulty is unprecedented,” Mr Wen said at a United Nations-sponsored conference in Beijing on climate change.
“Developed countries shoulder the duty and responsibility to tackle climate change and should alter their unsustainable lifestyle,” he said.
The comments reflect the more assertive tone that China has been taking in discussions about climate change, especially given the expectation that a Barack Obama administration will shift the position of the US.
In the past, China has tended to play a secondary role in issues such as climate change while the US was coming under criticism for its attitude to global warming.
However, with several research institutes calculating that China has overtaken the US to be the biggest emitter of greenhouse gases – even though it is still well behind on a per capita basis – the government is worried that its record could become the focus of negotiations.
A senior European diplomat visiting Beijing said: “Everyone is waiting to see what the new US administration does but China very much does not want to become a pariah on this issue. You will see them being more constructive and also trying to shift the argument much more.”
Last month, a senior Chinese official raised the stakes in continuing talks about climate change when he called on developed countries to contribute as much as 1 per cent of their gross domestic product to a fund that would help poor nations adapt to the challenges of global warming.
In the past, China had suggested that funding of about 0.5 per cent of GDP was needed. However, the financial crisis has made it much less likely that rich countries would be willing to provide generous funding for climate change initiatives.
Although Beijing has been reluctant to sign up to agreed targets for reduced emissions, Chinese scientists have become more worried about the impact of climate change on the country’s agriculture.
Independently of the international negotiations, China has set ambitious goals to improve energy efficiency by 20 per cent by 2010, although officials admit that emissions will continue to increase for some time because of China’s dependence on coal as its main source of energy.
Copyright The Financial Times Limited 2008
Published: November 7 2008 17:02
The developed world should abandon its “unsustainable lifestyle” and do more to help poor nations adapt to climate change, Wen Jiabao, the Chinese premier, said on Friday.
The slowdown in the global economy caused by the financial crisis should not be allowed to hamper efforts to deal with global warming, said Mr Wen, and more technology should be transferred to poorer countries.
“It took developed countries several decades to solve the problems of saving energy and cutting emissions, while China has to solve the same problem in a much shorter period. So the difficulty is unprecedented,” Mr Wen said at a United Nations-sponsored conference in Beijing on climate change.
“Developed countries shoulder the duty and responsibility to tackle climate change and should alter their unsustainable lifestyle,” he said.
The comments reflect the more assertive tone that China has been taking in discussions about climate change, especially given the expectation that a Barack Obama administration will shift the position of the US.
In the past, China has tended to play a secondary role in issues such as climate change while the US was coming under criticism for its attitude to global warming.
However, with several research institutes calculating that China has overtaken the US to be the biggest emitter of greenhouse gases – even though it is still well behind on a per capita basis – the government is worried that its record could become the focus of negotiations.
A senior European diplomat visiting Beijing said: “Everyone is waiting to see what the new US administration does but China very much does not want to become a pariah on this issue. You will see them being more constructive and also trying to shift the argument much more.”
Last month, a senior Chinese official raised the stakes in continuing talks about climate change when he called on developed countries to contribute as much as 1 per cent of their gross domestic product to a fund that would help poor nations adapt to the challenges of global warming.
In the past, China had suggested that funding of about 0.5 per cent of GDP was needed. However, the financial crisis has made it much less likely that rich countries would be willing to provide generous funding for climate change initiatives.
Although Beijing has been reluctant to sign up to agreed targets for reduced emissions, Chinese scientists have become more worried about the impact of climate change on the country’s agriculture.
Independently of the international negotiations, China has set ambitious goals to improve energy efficiency by 20 per cent by 2010, although officials admit that emissions will continue to increase for some time because of China’s dependence on coal as its main source of energy.
Copyright The Financial Times Limited 2008
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