Sunday, 25 January 2009

Nuclear ban could be sap on Scottish energy

The Sunday Times
January 25, 2009
Significant opportunities in the power sector may be lost because of the government’s current stance

John Penman

Scotland could miss out on significant opportunities in the power sector if the government sticks to its decision not to build nuclear power stations, research suggests.
A study by Price Waterhouse Coopers (PWC) predicts that while deal activity in the power sector will prove more difficult in coming years, the revival of the global nuclear industry offers plenty of opportunities.
Last week Scottish and Southern Energy and Scottish Power owner Iberdrola jointly expressed an interest in participating in the UK government’s commitment to investing in new nuclear power generation. But while the UK government has announced plans to build up to 10 new nuclear power stations by 2020, involving tens of billions of pounds of investment, the Scottish government opposes any new stations.
Jason McBurnie, in corporate finance at Price Waterhouse Coopers Scotland, said Scottish firms could miss out on the nuclear bonanza.
“Nuclear power is undoubtedly a thorny topic. With the richness of nuclear expertise within British Energy and its supplier base, Scotland has much to offer — and to gain from — an expanding nuclear power industry,” he said. “The question for Scotland is whether its government’s policy statement of vetoing new nuclear generation capacity within Scotland will lead to the country missing out on a share of this activity and whether this is a price worth paying for a key Scottish government policy decision?”
McBurnie said the opportunities in the nuclear sector would undoubtedly spread to other businesses.
“The new investment programme could prompt a further round of mergers and acquisitions on a smaller scale, as the search to acquire deep nuclear skills in the consultancy, engineering services and construction sectors intensifies,” he said.
“Indeed, Scottish engineering business Weir Group benefited from this high demand for nuclear expertise when we advised the group last year on the strategic sale of its Strachan & Henshaw division.”
Research by PWC shows that while the number of power deals soared in 2008, the value of deals plummeted as companies faced the new reality of the financial crisis and, in key markets, adopted a “wait and see” approach to big acquisitions.
The latest edition of Power Deals, the annual review by PWC of global power-sector mergers and acquisitions, shows a 24% rise in worldwide power deals for 2008, up to 954 from 768 in 2007, but a 41% plunge in total deal value, down to US$205.6 billion (£151.3 billion) from its record level of US$372.5 billion in 2007.
McBurnie added: “The coming year will be one of obstacles and opportunities in the power sector. The constrained availability of finance will inhibit deal activity and, until that situation is eased, there is unlikely to be a revival in deal values.
“However, with some businesses running short of cash for essential expansion, or facing refinancing challenges, the need for liquidity may force the market, with businesses and assets becoming available for corporates with strong balance sheets and cash flows.”
SWEDEN’S Vattenfall may form a three-way consortium with Spain’s Iberdrola and Scottish and Southern Energy (SSE) to build nuclear reactors in the UK.
Iberdrola, the owner of ScottishPower, and SSE have announced they will unite to bid for new sites. Vattenfall is understood to have held talks with the Scottish groups.
Iberdrola is thought to be open to the idea of Vattenfall taking a share in the stations, which will cost up to £5 billion each.

Miliband steps up nuclear drive

By Mark LeftlySunday, 25 January 2009

Crunch talks on the UK's nuclear rollout programme will take place on Tuesday.
Ed Miliband, Energy and Climate Change Secretary, will host a conference at which it is thought he will push UK manufacturers to find ways of encouraging British engineers and designers to produce key components for nuclear stations. Under EU legislation a government cannot demand that its own companies have an involvement in such projects. The Nuclear Installations Inspectorate, part of the Health and Safety Executive, is also due to announce ideas for station design.
Scottish & Southern Energy and Iberdrola, the Spanish owner of Scottish Power, announced last week that they would set up a joint venture to build nuclear plants in the UK. British Energy's French owner, EDF, and German partnership E.ON and RWE have also said they intend to join the nuclear rollout programme. Between them, it is estimated that the trio could provide 15 gigawatts of nuclear energy.

Link-up for nuclear sites

SWEDEN’s Vattenfall may form a three-way consortium with Spain’s Iberdrola and Scottish and Southern Energy (SSE) to build nuclear reactors in the UK.
Iberdrola, owner of Scottish Power, and SSE have announced they will unite to bid for new sites. Vattenfall is understood to have held talks with the Scottish groups.
Iberdrola is thought to be open to the idea of Vattenfall sharing costs in the stations, which will cost up to £5 billion each.

Miliband faces energy dilemma

The Sunday Times
January 25, 2009
He is struggling to balance supply security with low emissions
Danny Fortson

It is not surprising that the past few months have been rocky for Ed Miliband. After all, Gordon Brown saddled him with one of the most difficult briefs in government when he appointed the 39-year-old former Cabinet Office minister in October to lead the newly created Department of Energy and Climate Change.
The government was being pilloried for its failure to rein in record-high household energy bills. The industry gave him little time to settle in, quickly criticising the new minister for not understanding the sector he was dropped in to oversee. Russia’s decision to cut gas supplies to Europe, meanwhile, stoked fresh concerns that Britain’s ageing infrastructure, much of it built in the 1950s and 1960s, would be shut down long before clean, reliable alternatives were built to replace it.
Yet Miliband - younger brother of the foreign secretary David - seems unbowed by the challenge. Indeed, he is set to take his nascent department into the most interventionist state role since the industry was privatised in the early 1990s.
“There are big opportunities here, but it does require a strategic role for government,” he said in an interview with The Sunday Times. “Part of it is what Lord Mandelson [the business secretary] has been talking about, which is having a more active industrial policy.”
It is up to Miliband to get the best out of the expected £100 billion that will be needed over the next decade to reshape Britain’s energy infrastructure for a low-carbon world. He is not convinced that, left to their own devices, companies will get it right.
“There are too many uncertainties associated with these investments for markets to do them on their own, even with a price on carbon, and that’s what we are working on,” he said.
This week he will make the first of a flurry of announcements that he says will keep Britain on track towards taming the three-headed hydra of energy security, pollution reduction and affordability.
Tomorrow he will unveil a short list of five proposals for the Severn Barrage, the controversial tidal scheme that has been knocking around for three decades but been repeatedly rejected over cost and environmental concerns. On Tuesday he will push ahead with Britain’s new nuclear building programme when he invites the industry to propose sites on which to build new nuclear reactors.
In recent weeks all the big six utilities have formed consortiums as they prepare to build what would be the world’s first new generation of nuclear reactors, outside France, in decades. The industry’s interest has been spurred largely by a concerted government effort to remove many of the obstacles that had for so long held back development here.
“We are not about subsidising new nuclear, but we are about breaking down the barriers,” said Miliband, referring to the recently passed energy and planning bills. “When you see the companies that are coming forward, there is a pretty clear enthusiasm that new nukes make economic sense for them.”
It is a model that Miliband hopes to replicate with the renewables industry. “The low-carbon future is in my view around nuclear, renewables and clean fossil fuels, but we need to create a top-down framework to incentivise the market,” he said. “We have shown on nuclear that we can deliver on these things, and we are seeking to do the same on renewables,” he added.
In the spring the Department of Energy will publish its low-carbon industrial strategy paper, detailing a comprehensive approach that will include subsidies for new technologies and that aims to create thousands of new “green” jobs.
But won’t all this lead to ever-higher household bills? Not necessarily, he argues. “The best answer to upward pressure on energy prices is energy efficiency and we are in the foothills of what we need to achieve in this area,” he said. “In the 1970s Britain converted to North Sea gas. I confess I don’t remember it that well - I was very young - but that sort of house-by-house, street-by-street programme is what we need to think about for energy efficiency.”
Yet, with roughly a third of Britain’s generating capacity set to close over the next 15 years, the industry has warned that renewables will not be enough and that without new fossil-fuel plants the country faces the real possibility of the lights going out.
It is in this context that Miliband will have to make what will surely be one of his most controversial decisions: whether to approve an application by Eon to build a new coal-fired power station at Kingsnorth, near Ashford in Kent.
The plant would be the first coal-fired station to be built in Britain for more than three decades. Eon has entered the project into a competition under which the government will award one company several hundred million pounds to build a carbon capture and storage (CCS) plant to demonstrate a technology that promises to strip carbon out of power-station exhaust and bury it underground.
Miliband refused to say if he would award the CCS money to Eon, or if he would approve the plant if it lost the competition. “It is very difficult to reconcile security of supply with our low-carbon obligations, but I don’t want to anticipate what I have to announce to parliament in the coming weeks and months on our approach to this issue because it is a very sensitive matter.”
He admitted, however, that he thinks “Britain should lead by example on CCS”. Giving the green light to a dirty new coal plant would not be seen as setting a good example.

Severn Barrage plans revealed

The Sunday Times
January 25, 2009
Danny Fortson

ENERGY secretary Ed Miliband will unveil five proposals tomorrow for the Severn Barrage, the controversial tidal scheme that could become the country’s biggest source of renewable energy.
The announcement will be a step forward for a project that could generate up to 7% of Britain’s energy needs but which has failed to get off the ground since it was proposed after the 1970s oil shocks.
Several variations of a scheme to harness the strong currents of the Severn Estuary to generate electricity have been rejected over costs, possibly as high as £15 billion, or potential environmental damage.
Miliband told The Sunday Times, however, that the urgent need to reduce carbon emissions could finally make it viable.

“Climate change makes us want to look again at this kind of technology. This would make an important contribution to our renewable targets,” he said. “We can’t rule out anything when it comes to climate change.”
The Department of Energy and Climate Change will open a three-month public consultation on the proposals, which range from a 10-mile barrage between Brean Down, south of Weston-super-Mare, and Lavernock Point in Wales, to less-intrusive options such as an underwater tidal fence or lagoons.
Miliband will give fresh impetus to the new nuclear-building programme this week when he invites the industry to propose sites for new nuclear reactors. This will be based on criteria that the department will publish under its strategic-siting assessment.

Farmer's secret GM crop defies green rulebook

Calls for prosecution of agricultural 'saboteur'
Caroline Davies
The Observer, Sunday 25 January 2009

Environmentalists are calling for the prosecution of a farmer who claims to have sabotaged Wales's GM-free status by secretly planting and harvesting genetically modified varieties of maize and feeding them to local sheep and cattle.
In a political stunt that has infuriated the National Assembly for Wales, Jonathan Harrington, 53, an agronomist who advises farmers on how to grow crops, claims to have imported two varieties of GM maize from Spain, planted them on his land and given seeds away to two other farmers who also planted the banned crops. Wales has been GM-free since 2000 and markets its milk, meat and vegetables accordingly.
As the Welsh assembly considers its legal options, GM-free campaigners condemned Harrington as "grossly irresponsible". Plant scientist Brian John of GM Free Cymru said: "To plant it, then deliberately push it into the food chain is absolutely insane." Friends of the Earth Cymru said: "The concern is that it has entered the food chain without any control, traceability or labelling. Even if it is a small quantity, it means Wales is not GM-free any more."
An unrepentant Harrington said he had resorted to the secret planting after the Welsh assembly, which voted unanimously for GM-free status in 2000, refused to have any meaningful discussions over its policy. He said: "Out of frustration I went and bought some varieties of maize bred to be resistant to a pest called the European corn borer and which are grown widely in Spain, France, Germany and the Czech Republic."
The varieties he chose were on the EU common variety list, and as such it is legal to grow them anywhere in Europe.
The Welsh assembly admitted that despite its policy, which has otherwise been strictly adhered to throughout the principality, it has no actual legal power to ban GM crops in Wales.
However, anti-GM campaigners believe Harrington can be prosecuted for not complying with stringent regulations that require monitoring, labelling and traceability of GM crops.
Not only does he claim to have planted the maize at his farm at Tregoyd, near Hay-on-Wye; he claims two other farmers, whom he refuses to name, also planted the same maize.
"It was a poor summer, so they didn't do terribly well. But we did have enough for silage. So, it has been used in animal feed, for Welsh lamb and Welsh cattle," he admitted. "I've no qualms, no regrets at all. I am waiting for the backlash, and am very happy morally, ethically and legally, if need be, to defend my actions."
The assembly said in a statement: "The Welsh assembly government believes that the introduction of GM crops could undermine some of our achievements and future ambitions for Welsh agriculture. We are committed to close monitoring and control of any proposals for GM crops in Wales. However, we cannot legally ban GM crops in Wales because we have to work within a European legal framework.
"Our policy is to take a precautionary and restrictive GM crop policy stance which is in line with our commitment to sustainable agriculture. We believe it has broad public support and reflects the Welsh assembly government's legal duty to act responsibly within the UK and EU legislation."
Brian John condemned Harrington's stunt as political sabotage. "If he has, as he claims, planted it and it has entered the food chain, and he has no monitoring in place, then clearly he's broken the regulations and he should be prosecuted, absolutely," he said. "We think this is grossly irresponsible. Wales's GM-free status is very important."

Call for airport cull of Canada geese

A growing population of 10,000 birds near Heathrow has sparked fears of a new crash like that in the Hudson river
Rajeev Syal
The Observer, Sunday 25 January 2009

Canada geese will need to be culled in their thousands because they pose an increasing risk to aircraft, a leading government adviser has revealed. Dr John Allan, an expert in bird management, warned that the birds were large enough to "bring a plane down" if sucked into an engine. He said that in Britain the numbers of the species had now reached 120,000.
Allan, head of the bird management team at the Central Science Laboratory, a government agency, said intensive culling was necessary to ensure passenger safety. His words follow last week's life-saving crash landing of a US Airways jet in the icy waters of New York's Hudson river. Both engines failed after it flew through a flock of Canada geese, according to the crew.
"This particular species can cause a problem because of their size. If they are sucked into an engine, they can bring a plane down," said Allan. "Their numbers have greatly increased across Britain, and so they will have to be culled, moved or restricted.
"While a small bird which is sucked into an aircraft's engine will not cause a problem, these geese are large enough to bring the engines to a halt. This is of great concern."
Allan said that Britain's airport authorities were already spending millions of pounds ensuring that flocks of birds, and Canada geese in particular, were kept away from airports and flight paths. Collisions between aircraft and birds cost the world civil aviation industry around £1.2bn a year and have resulted in the loss of 88 aircraft and 243 lives.
Canada geese, or Branta canadensis, easily recognised by their distinctive black head and neck and white chin-strap, are widespread in Britain. As their name suggests, they originated in the Canadian tundra and many winter in the southern swamplands of the United States. Some scientists claim that they are now choosing to winter in Europe because of global warming.
In Britain, their numbers are increasing by nearly 8% a year. They tend to fly in groups of 10 or 12 and so could overwhelm even a large engine designed to withstand a bird strike. Heathrow has a particular problem because around 10,000 of the birds roost in lakes and quarries south of the airport and feed to its north, making them likely to fly across the runways.
Measures were introduced to control the population in 1998 after a flock collided with a Boeing 767 coming in to land, causing damage to the nose, wing and left engine. Radar is now used to detect any within a six-mile radius. Efforts are then made to scare, move or kill the birds.
Canada geese are one of 13 species of birds - including gulls, crows and pigeons - which can be legally culled in Britain. Many are shot. Another method of controlling their numbers is to locate their eggs and either prick them with a pin or cover them in oil.
The Royal Society for the Protection of Birds said that Canada geese posed no threat to native British birds, but recognised that they could pose a danger to air traffic. It backs the Wildlife and Countryside Act regulation that all humane methods of population control should be tried before culling is adopted.
The Canada Geese Conservation Society, based in Walthamstow, north-east London opposes a cull because the birds mate for life and can pine to death if a partner is killed.
The number of Canada geese in Britain is expected to rise to more than 200,000 by 2010, according to the British Trust for Ornithology, which monitors bird populations. That compares with just 3,600 in 1953.
Experts believe that the rapid increase began in the 1970s and 1980s after the birds were deemed to be gathering in excessive numbers in parks and lakes and were moved on.
Dr Graham Austin, the trust's senior research ecologist, said: "Councils and park keepers were unwittingly helping to spread their numbers. As a result, they are everywhere and can be quite a nuisance."