The Sunday Times
February 1, 2009
Danny Fortson
A RADICAL plan by mining entrepreneur Richard Budge to build the world’s largest “clean coal” power plant in Yorkshire has been given new life after the European Union said it was considering an immediate €250m (£219m) cash injection to jump-start a project the UK government has refused to support.
Budge’s company, Powerfuel, wants to build a 900MW, low-emission power station fed by the Hatfield colliery, which he reopened in 2007. It would be the first and largest plant equipped with carbon capture and storage (CCS) technology, which strips CO2 from power-plant exhausts and buries it deep underground in geological formations.
The proposal was thrown into limbo last year when the British government disqualified it from a competition that will award “several hundred million pounds” in public funds that industry says is necessary to build the first plant equipped with the experimental technology.
Last week, however, the EU said the Hatfield project was one of four it was considering for an immediate €250m injection. The cash has been made available under a ¤5 billion economic recovery package unveiled last week.
An EU spokesman said: “We have chosen projects that are mature enough so they can be developed this year. We want to invest quickly to reactivate economic activity.”
Budge, known as King Coal after he bought the British coal industry from the government in the 1990s, will make a detailed proposal to EU officials this week.
He said: “If government policy were in place today, we could start building in April and be saving 5m tonnes of carbon per year by 2014. That’s more than the carbon savings from every wind farm that is built and operating in Britain today.”
Carbon capture and storage technology is seen as critical in combating climate change. The other UK projects named by the EU were Eon’s proposed coal plant at Kingsnorth in Kent, Scottish Power’s Longannet station and RWE’s Tilbury plant.
Whichever receives the EU cash could leapfrog a slow-moving British government competition that will subsidise the first CCS plant in the UK. A winner is not expected to be named until next year.
The Hatfield proposal was disqualified last year after the government decided to limit it to so-called “post-combustion” technology, which “scrubs” the CO2 from the flue gases generated by burning coal or gas.
Budge plans to build a pre-combustion facility, which gasifies coal before it is fed into the power plant and separates out the CO2, which is piped underground. At 900MW the project is much larger than the government’s demonstration competition, which would fund the building of plants about one third of its size.
- GDF-Suez of France has opened parallel discussions with Germany’s RWE, Scottish Power’s Spanish owner Iberdrola, and Vattenfall of Sweden as it seeks to form an alliance to bid for sites to build nuclear reactors in the UK. The French energy group is expected to decide on a partner soon. The Nuclear Decommissioning Authority will auction off four sites next month.
Sunday, 1 February 2009
All homes go green
Every home in Britain is to be offered an energy-efficiency makeover under emissions government plans to cut CO2 and boost the recession-hit construction sector. Under the scheme, estimated to cost about £20 billion over 10-15 years from 2011, every household will get incentives, such as a council tax holiday, to install insulation, double glazing and the like.
imate expert snubs Heathrow protesters
ClCampaigners are told coal power is the priority danger, not more runways
Robin McKie, science editor
The Observer, Sunday 1 February 2009
Heathrow protestors' hopes of attracting the support of leading climate scientists in their bid to block the airport's proposed third runway have suffered a major setback. Jim Hansen, director of Nasa's Goddard Institute for Space Studies in New York, has told anti-aviation campaigners that their protests will not help the battle against global warming and do not deserve support.
The news is a serious blow for those opposed to airport expansion. Hansen is one of the world's mostly highly regarded climate scientists and has played a key role in other environmental protests. Last year, he helped defend six campaigners charged with criminal damage after occupying the Kingsnorth coal-fired power station in Kent. He told the court that their protest was justifiable because the 20,000 tonnes of carbon dioxide emitted daily by the plant could lead to the extinction of 400 species. The accused were acquitted.
Now eco-campaigners are planning to follow that protest with one aimed at preventing Heathrow's third runway being built. However, Hansen has told them that there is no comparison with the dangers posed by coal power. "I don't think it is helpful to be trying to prevent air flight," Hansen told the Observer. He said he would make no move to help protesters arrested during occupations or disruptions at Heathrow.
Hansen is a world-renowned expert on global temperature fluctuations, and the victim of several unsuccessful attempts by George Bush's administration to silence his warnings about climate change. The climatologist believes the world has only a few years to halt the rise of carbon emissions and has warned America's new president, Barack Obama, that he must act decisively on climate change during his first term or put the planet at risk. Major cuts in carbon emissions must be made worldwide.
However, Hansen said cutbacks in new runways would be ineffective. "The number of runways you need for your airports depends on their traffic. You don't want to be so restrictive that you end up burning more fuel because planes are having to circle and wait to land because of lack of runway space."
Heathrow's expansion is expected to lead to increased noise and pollution, the demolition of 700 homes and major road congestion in the region, and one of the largest coalitions assembled against a building project has been set up to block it. This includes 20 local authorities, six unions and nearly all mainstream environment groups. Activists have said they are prepared to be arrested.
John Sauven, director of Greenpeace UK, said the site would become "the battlefield of our generation".
But Hansen insisted that such efforts were misplaced. "Coal is 80% of the planet's problem," he said. "You have to keep your eye on the ball and not waste your efforts. The number one enemy is coal and we should never forget that." Aviation was not a danger, and he would not fly to the help of those who disrupted airports and flights, he stressed.
Robin McKie, science editor
The Observer, Sunday 1 February 2009
Heathrow protestors' hopes of attracting the support of leading climate scientists in their bid to block the airport's proposed third runway have suffered a major setback. Jim Hansen, director of Nasa's Goddard Institute for Space Studies in New York, has told anti-aviation campaigners that their protests will not help the battle against global warming and do not deserve support.
The news is a serious blow for those opposed to airport expansion. Hansen is one of the world's mostly highly regarded climate scientists and has played a key role in other environmental protests. Last year, he helped defend six campaigners charged with criminal damage after occupying the Kingsnorth coal-fired power station in Kent. He told the court that their protest was justifiable because the 20,000 tonnes of carbon dioxide emitted daily by the plant could lead to the extinction of 400 species. The accused were acquitted.
Now eco-campaigners are planning to follow that protest with one aimed at preventing Heathrow's third runway being built. However, Hansen has told them that there is no comparison with the dangers posed by coal power. "I don't think it is helpful to be trying to prevent air flight," Hansen told the Observer. He said he would make no move to help protesters arrested during occupations or disruptions at Heathrow.
Hansen is a world-renowned expert on global temperature fluctuations, and the victim of several unsuccessful attempts by George Bush's administration to silence his warnings about climate change. The climatologist believes the world has only a few years to halt the rise of carbon emissions and has warned America's new president, Barack Obama, that he must act decisively on climate change during his first term or put the planet at risk. Major cuts in carbon emissions must be made worldwide.
However, Hansen said cutbacks in new runways would be ineffective. "The number of runways you need for your airports depends on their traffic. You don't want to be so restrictive that you end up burning more fuel because planes are having to circle and wait to land because of lack of runway space."
Heathrow's expansion is expected to lead to increased noise and pollution, the demolition of 700 homes and major road congestion in the region, and one of the largest coalitions assembled against a building project has been set up to block it. This includes 20 local authorities, six unions and nearly all mainstream environment groups. Activists have said they are prepared to be arrested.
John Sauven, director of Greenpeace UK, said the site would become "the battlefield of our generation".
But Hansen insisted that such efforts were misplaced. "Coal is 80% of the planet's problem," he said. "You have to keep your eye on the ball and not waste your efforts. The number one enemy is coal and we should never forget that." Aviation was not a danger, and he would not fly to the help of those who disrupted airports and flights, he stressed.
Think tank: Brown has a power failure
The Sunday Times
February 1, 2009
Gregory Barker
For nearly a decade Britain has “punched above its weight” on climate change. In his last years as prime minister, Tony Blair never travelled abroad without packing his climate change sermon. Sadly he never got around to sharing it with his own government.
Apart from the Climate Change Act, with its stretching future targets, the only serious environmental decision that Labour hasn’t ducked or dithered on in more recent years is building yet another runway at Heathrow. This, according to Greenpeace, has left Gordon Brown’s green credentials in shreds.
While Germany and other European economies have been busily building renewable energy infrastructure and spawning new technology leadership on the back of successful “feed-in tariffs”, new Labour’s best achievement has been international grandstanding.
But President Barack Obama, with his ambitious green strategy, is about to knock Britannia off her carbon pedestal.
The world’s greatest economy is waking up to the enormous potential of the clean energy revolution and is doing so with the zeal of a convert.
However, Labour has claimed one tangible success. After 10 years in office, the government was finally able to announce that the UK was getting serious about exploiting offshore wind. And about time too. Britain has more potential to harness the power of the sea than any other country in Europe.
The London Array in the Thames estuary is Europe’s largest offshore wind project and the flagship of the whole UK offshore effort: a huge source of clean energy, right on the capital’s doorstep. But while this project has been heralded by ministers as a firm step towards meeting our 2020 targets on renewables, decisions to invest in the project have, in reality, yet to be made. Only now is the project approaching final investment approval from the international companies behind the scheme. And it is by no means a done deal as ministers have suggested. The failure to expand the foundations of a modern manufacturing base over the past decade means that nearly 70% of the costs of London Array are billed in euros. The plight of sterling has more than wiped out any gains for the project from falling steel and commodity prices.
But the government cannot sit back and deploy its usual preferred brand of procrastination – ie, yet another consultation – because there is another big clock ticking in the Thames Gateway.
The national grid has made it clear that the engineering required to connect this iconic project to the network must take place early next year: after that, any disruption to the grid could fatally undermine preparations for the 2012 Olympics. After 2012, there will be other big demands on the network that make simply “booking another slot” much more difficult.
To get cracking with the essential engineering in 2011, the final decision to invest must be taken within the next few months, if not weeks. But the government’s proposals on how to improve the inadequate support for developing clean technologies such as London Array, currently provided by the renewables obligation, aren’t due until April.
Last week the energy minister was unable to answer parliamentary questions as to whether the government had considered the impact of the collapse in sterling on the viability of offshore wind and London Array in particular.
The real solution to expensive imports must be a renaissance in British manufacturing. Britain is still home to great world-class manufacturers, but not enough. The drive towards green energy independence and a low-carbon economy has the potential to help change that.
Over the next decade we must stick to our 2020 renewable energy targets. That will mean a huge expansion of large-scale offshore wind, wave and marine technology. However, to get the most from this energy revolution, we need to make Britain an attractive place to not only sell the world’s biggest turbines, but to build them too. We need to make sure that we create the modern networks and infrastructure that will allow private investment to flow into these new industries, foster innovation and provide the business-friendly conditions that will attract the engineers and manufacturers onto dry land.
President Obama has pledged to create 5m jobs by driving the US towards clean energy independence. For his administration, green is the new red, white and blue. But not here. Gordon Brown has his head stuck in the 1980s. Old coal power stations and big runways are Brown’s prescription for the low-carbon era.
President Obama is offering the US economy the prospect of genuine change and renewal. How long can we put that off in Britain, without seriously damaging our long-term prospects?
Gregory Barker is shadow minister for climate changeSend your ideas on this week’s Think Tank to think@sunday-times.co.uk
February 1, 2009
Gregory Barker
For nearly a decade Britain has “punched above its weight” on climate change. In his last years as prime minister, Tony Blair never travelled abroad without packing his climate change sermon. Sadly he never got around to sharing it with his own government.
Apart from the Climate Change Act, with its stretching future targets, the only serious environmental decision that Labour hasn’t ducked or dithered on in more recent years is building yet another runway at Heathrow. This, according to Greenpeace, has left Gordon Brown’s green credentials in shreds.
While Germany and other European economies have been busily building renewable energy infrastructure and spawning new technology leadership on the back of successful “feed-in tariffs”, new Labour’s best achievement has been international grandstanding.
But President Barack Obama, with his ambitious green strategy, is about to knock Britannia off her carbon pedestal.
The world’s greatest economy is waking up to the enormous potential of the clean energy revolution and is doing so with the zeal of a convert.
However, Labour has claimed one tangible success. After 10 years in office, the government was finally able to announce that the UK was getting serious about exploiting offshore wind. And about time too. Britain has more potential to harness the power of the sea than any other country in Europe.
The London Array in the Thames estuary is Europe’s largest offshore wind project and the flagship of the whole UK offshore effort: a huge source of clean energy, right on the capital’s doorstep. But while this project has been heralded by ministers as a firm step towards meeting our 2020 targets on renewables, decisions to invest in the project have, in reality, yet to be made. Only now is the project approaching final investment approval from the international companies behind the scheme. And it is by no means a done deal as ministers have suggested. The failure to expand the foundations of a modern manufacturing base over the past decade means that nearly 70% of the costs of London Array are billed in euros. The plight of sterling has more than wiped out any gains for the project from falling steel and commodity prices.
But the government cannot sit back and deploy its usual preferred brand of procrastination – ie, yet another consultation – because there is another big clock ticking in the Thames Gateway.
The national grid has made it clear that the engineering required to connect this iconic project to the network must take place early next year: after that, any disruption to the grid could fatally undermine preparations for the 2012 Olympics. After 2012, there will be other big demands on the network that make simply “booking another slot” much more difficult.
To get cracking with the essential engineering in 2011, the final decision to invest must be taken within the next few months, if not weeks. But the government’s proposals on how to improve the inadequate support for developing clean technologies such as London Array, currently provided by the renewables obligation, aren’t due until April.
Last week the energy minister was unable to answer parliamentary questions as to whether the government had considered the impact of the collapse in sterling on the viability of offshore wind and London Array in particular.
The real solution to expensive imports must be a renaissance in British manufacturing. Britain is still home to great world-class manufacturers, but not enough. The drive towards green energy independence and a low-carbon economy has the potential to help change that.
Over the next decade we must stick to our 2020 renewable energy targets. That will mean a huge expansion of large-scale offshore wind, wave and marine technology. However, to get the most from this energy revolution, we need to make Britain an attractive place to not only sell the world’s biggest turbines, but to build them too. We need to make sure that we create the modern networks and infrastructure that will allow private investment to flow into these new industries, foster innovation and provide the business-friendly conditions that will attract the engineers and manufacturers onto dry land.
President Obama has pledged to create 5m jobs by driving the US towards clean energy independence. For his administration, green is the new red, white and blue. But not here. Gordon Brown has his head stuck in the 1980s. Old coal power stations and big runways are Brown’s prescription for the low-carbon era.
President Obama is offering the US economy the prospect of genuine change and renewal. How long can we put that off in Britain, without seriously damaging our long-term prospects?
Gregory Barker is shadow minister for climate changeSend your ideas on this week’s Think Tank to think@sunday-times.co.uk
Stern recipe for change
The Sunday Times
February 1, 2009
To stop the world warming we have to cut our carbon emissions to African levels
Jonathan Leake reports from Davos
It may be crippled and reviled, but Britain’s banking industry is likely to become one of the nation’s key assets in dealing with climate change, according to Lord (Nicholas) Stern.
Speaking at the World Economic Forum in Davos last week, Stern suggested that Britain’s banks and other financial institutions would be an essential element in building the low-carbon infrastructure the country will need if it is to achieve its emission-reduction targets. He also believes such investments could help them rebuild their profits.
“Banking could do very well as Britain moves to a low-carbon economy,” he said. “There will be lots of business opportunities and Britain’s bankers are particularly strong in this area. They have been very creative over all kinds of issues and they could do it again in the financing of green initiatives.”
Stern, former chief economist at the Treasury, is among Britain’s most influential economists. Two years ago he published The Stern Review: The Economics of Climate Change, which described climate change as the “greatest and widest-ranging market failure ever seen”.
Related Links
Why climate change matters in the downturn
It added: “Our actions over the coming few decades could create risks of major disruption to economic and social activity later in this century, and in the next, on a scale similar to those associated with the great wars and the economic depression of the first half of the 20th century.”
For some, the idea that banks might be trusted to help save the country from such threats when they have acted so irresponsibly in their lending might seem odd – but the reality is that they will have to be involved.
“Over the next 10-15 years the world is going to move strongly to low-carbon technologies,” said Stern. “There is going to be a very rapid technological change. Areas like construction, transport and power are going to change particularly fast – and that is going to need huge investment as well as creating many businesses.”
The scale of the challenge to business is huge. At the moment humanity generates the equivalent of about 50 billion tonnes of carbon dioxide a year, roughly equal to eight tonnes for every person on the planet. There is, however, huge variation. Europeans generate 11-14 tonnes per head and Americans about 22 tonnes, while Africans typically generate 1-2 tonnes.
The Intergovernmental Panel on Climate Change has said that the world is already likely to warm by 1.5C thanks to the greenhouse gases emitted so far. It warns that annual emissions must fall to about 20 billion tones by 2050 if there is to be any real chance of keeping global temperature rise below 2C. Since the world’s population will have reached 9-10 billion by this date this equates to carbon-dioxide emissions falling to about two tonnes per head.
Such figures sound simple – but what would limiting our annual emissions to two tonnes per person actually mean for the way we live and work?
Jeremy Oppenheim, global director of climate-change initiatives at McKinsey, the consulting firm, calculates that this translates into 5.5 kg of carbon dioxide per day, and warned in a recent report: “If one had to live on such a carbon budget, one would be forced to choose between a 25-mile car ride, a day of air conditioning, buying two new T-shirts (without driving to the shop), or eating two meals. In short, without a big boost in carbon productivity, stabilising greenhouse-gas emissions would require a huge drop in lifestyle for people in the developed countries and the loss of hope in the Third World for greater prosperity through economic growth.”
Such figures sound like a recipe for despair, but, speaking in Davos last week, Oppenheim backed Stern’s suggestion that they actually represented a huge investment opportunity. He said: “The transition to a low-carbon economy, if done right, has the potential to stimulate economic growth, create jobs and bring benefits to consumers. The ‘costs’ of this transition are in fact investments in new, 21st-century infrastructure that will pay off for generations to come – just as the ‘costs’ of investments in electrification, highways, and the internet paid off with very high returns for the societies that made them in the 20th century.”
Just how big that investment might be was shown in another report from the World Economic Forum calling for annual global investment of £360 billion in green-energy infrastructure including wind, solar power, geothermal energy and biofuels.
Michael Liebreich from London - based New Energy Finance, which advises investors on renewable-energy and low-carbon technology and the carbon markets and who co-wrote the Davos report, said: “Clean-energy opportunities can generate significant economic returns. The report shows that even after a tumultuous 2008, an index of the world’s 90 leading clean-energy companies had a five-year compounded-annualised return of almost 10%, unmatched by the world’s main stock indices.”
What, however, is needed to make investors pour such large sums of money into building the low-carbon power stations, electric vehicles and other green infrastructure that Stern sees as essential?
For Jeroen van der Veer, chief executive of Royal Dutch Shell, one of the world’s largest oil companies, the key is to put a price on carbon-dioxide emissions. Referring to next December’s crucial global-climate talks in Copenhagen, which will try to draw up a global treaty on cutting carbon emissions, he told a Davos audience: “The long-term framework has to include a price for carbon dioxide. There has to be a cost for emitting greenhouse gases.”
Under such a global carbon market each country would be set a target for carbon-dioxide emissions. If it exceeded that target, it would have to buy allowances from a country that had “quota” to spare. If it emitted less than its allowance, it could profit by selling the spare.
In his latest report, Key Elements of a Global Deal on Climate Change, Stern has estimated that, under such a scheme, developing countries could earn up to £70 billion a year from selling unused carbon-dioxide allowances to Europe, America and other advanced economies.
The discussions among business leaders and politicians in Davos last week offered some solutions for global warming, but the hopes they raised still make a stark contrast with the scientific evidence. A recent paper from Professor Kevin Anderson, director of the Tyndall Centre for Climate Change Research, the government’s leading academic research centre, contained a frightening warning.
It said: “The target set for the climate talks was to keep global temperature rises below 2C. At the moment, however, the level of emissions is rising so fast that we are heading for a world that is 4C- 5C warmer than now by 2100. That would be catastrophic for the environment and for humanity. Unless economic growth can be reconciled with unprecedented rates of decarbonisation, it is difficult to foresee anything other than a planned economic recession being compatible with stabilising the climate.”
Stern acknowledges the targets for cutting emissions are ambitious. “It is going to be tough,” he said. “We already have the equivalent of 420 parts per million of carbon dioxide in the air and we will reach 450ppm in eight years. Above that we have only a 50% chance of keeping global-temperature rise below 2C. We have to recognise that the threats are huge, as are the opportunities, and act on them now.”
Captains of industry go green
Sir Terry Leahy, chief executive of Tesco IT is no longer an option for a business to ignore climate change: it must be green to grow. Tesco has set itself challenging targets on carbon emissions, recycling and sustainable ways of working.
We aim to lead by investing millions in technology and by helping our customers to make a big difference.
Tony Hayward, chief executive of BP THE issue of sustainability is naturally on people’s minds in a downturn. But the truth is that for most companies – and certainly at BP – it is something more fundamental. Sustainability is about having a sense of balance, keeping an eye on the long term and on the world we all live in and work in.
Sir Richard Branson, founder of Virgin Group RUNNING a company in a green or sustainable way is now one of the most important factors for a chief executive.
Businesses have a responsibility beyond making profits for their shareholders. At Virgin we gauge how we impact on society and how we can make real and lasting change.
Sir Stuart Rose, chairman of Marks & Spencer I AM delighted that The Sunday Times is launching a green page.
I believe that businesses must take a lead and behave responsibly.
What is more, we will show over this year that good businesses can be profitable ones, making the case for ethical business more compelling than ever.
Andy Cosslett, chief executive of InterContinental Hotels Group THE green agenda is an increasing priority. Research shows that people are looking for hotels that manage their impact on the environment and will seek them out when booking somewhere to stay.
We have now launched a scheme to help our hotels reduce their energy consumption by up to 25%.
Justin King, chief executive of J Saisbury BEING a responsible retailer is part of our heritage and, despite the financial climate, environmental concerns are increasing in importance to our customers. It is essential that we take a long-term view when it comes to making a positive difference to reducing our impact on the environment.
Paul Golby, chief executive of Eon UK COMPANIES such as Eon look at ways to not only keep the country’s lights on but also to ensure energy is affordable, at the same time as combating climate change.
The temptation will always be to make the easy choices, but we cannot afford to do that because future generations won’t thank us.
Steve Holliday, chief executive of National Grid MINIMISING impact on the environment while delivering safe, secure and economic energy supplies is no longer an option, it is now a must.
At National Grid we are cutting our emissions, supporting renewable energy and introducing smart meters to help customers cut down the amount of energy they use.
Sam Laidlaw, chief executive of Centrica IN energy production and supply businesses, we face tremendous challenges in planning for a future in which Britain will need secure low-carbon energy supplies and an improvement in energy efficiency. In the coming years, we will invest billions of pounds in zero-carbon nuclear and renewable generation and new technologies in our British Gas business.
Ed Miliband, secretary of state at the Department of Energy and Climate Change THERE is a sense that the green industry is a jobs niche. But every business needs to be a green business and particularly at this time.
There are big opportunities here as we think about the future of our economy and about how Britain can lead in the industries of the future.
The reality is we will use much more oil
COMBATING climate change and cutting greenhouse-gas emissions may have been high on the agenda during last week’s World Economic Forum but the final message emerging from business leaders remained deeply contradictory,writes Jonathan Leake.
The Davos meeting had been designed with a strong green theme, with leading economists and scientists speaking at a raft of meetings to push the need to cut fossil-fuel use. They were feted and applauded wherever they went, but the economic reality is likely to be very different.
Abdalla Salem El Badri,secretary-general of the Organisation of Petroleum Exporting Countries (Opec), said that, for all the talk of replacing fossil fuels with renewables, his members were planning to increase output by 85% by 2030.
What’s more, he said, Opec’s immediate aim was to push oil prices from $40 a barrel to between $60 and $80 to raise the billions of pounds needed to invest in that extra capacity.
Ilham Aliyev, president of Azerbaijan, announced plans to double his country’s oil production by 2014.
Tony Hayward, group chief executive of BP, also foresaw a sharp increase in fossil-fuel use. He looked forward to Opec achieving its aim of $60–$80 a barrel because this would allow oil companies to exploit new oil reserves such as Canadian tar sands, whose high costs currently make them marginal. Such reserves are, however, also controversial because so much energy is needed to extract them that they generate even more emissions than conventional oil.
Mukesh Ambani, managing director of Reliance Industries in India, said his country was also investing heavily in the hydrocarbon reserves lying off its east coast and would soon be bringing hundreds of thousands of barrels of oil ashore for Indian consumers.
Ambani did add, however, that: “We have to remember that the world has only another 100 years’ worth of oil reserves. We do need to create a bridge to the decarbonised world in an ecologically responsible way.”
The International Energy Agency has said that on current trends total world energy demand will expand by 45% between now and 2030 to meet the twin demands of economic and population growth. Its latest figures show that emissions from fossil fuels are likely to surge from 27 billion tonnes of carbon dioxide a year at the moment to 40 billion tonnes by 2030.
February 1, 2009
To stop the world warming we have to cut our carbon emissions to African levels
Jonathan Leake reports from Davos
It may be crippled and reviled, but Britain’s banking industry is likely to become one of the nation’s key assets in dealing with climate change, according to Lord (Nicholas) Stern.
Speaking at the World Economic Forum in Davos last week, Stern suggested that Britain’s banks and other financial institutions would be an essential element in building the low-carbon infrastructure the country will need if it is to achieve its emission-reduction targets. He also believes such investments could help them rebuild their profits.
“Banking could do very well as Britain moves to a low-carbon economy,” he said. “There will be lots of business opportunities and Britain’s bankers are particularly strong in this area. They have been very creative over all kinds of issues and they could do it again in the financing of green initiatives.”
Stern, former chief economist at the Treasury, is among Britain’s most influential economists. Two years ago he published The Stern Review: The Economics of Climate Change, which described climate change as the “greatest and widest-ranging market failure ever seen”.
Related Links
Why climate change matters in the downturn
It added: “Our actions over the coming few decades could create risks of major disruption to economic and social activity later in this century, and in the next, on a scale similar to those associated with the great wars and the economic depression of the first half of the 20th century.”
For some, the idea that banks might be trusted to help save the country from such threats when they have acted so irresponsibly in their lending might seem odd – but the reality is that they will have to be involved.
“Over the next 10-15 years the world is going to move strongly to low-carbon technologies,” said Stern. “There is going to be a very rapid technological change. Areas like construction, transport and power are going to change particularly fast – and that is going to need huge investment as well as creating many businesses.”
The scale of the challenge to business is huge. At the moment humanity generates the equivalent of about 50 billion tonnes of carbon dioxide a year, roughly equal to eight tonnes for every person on the planet. There is, however, huge variation. Europeans generate 11-14 tonnes per head and Americans about 22 tonnes, while Africans typically generate 1-2 tonnes.
The Intergovernmental Panel on Climate Change has said that the world is already likely to warm by 1.5C thanks to the greenhouse gases emitted so far. It warns that annual emissions must fall to about 20 billion tones by 2050 if there is to be any real chance of keeping global temperature rise below 2C. Since the world’s population will have reached 9-10 billion by this date this equates to carbon-dioxide emissions falling to about two tonnes per head.
Such figures sound simple – but what would limiting our annual emissions to two tonnes per person actually mean for the way we live and work?
Jeremy Oppenheim, global director of climate-change initiatives at McKinsey, the consulting firm, calculates that this translates into 5.5 kg of carbon dioxide per day, and warned in a recent report: “If one had to live on such a carbon budget, one would be forced to choose between a 25-mile car ride, a day of air conditioning, buying two new T-shirts (without driving to the shop), or eating two meals. In short, without a big boost in carbon productivity, stabilising greenhouse-gas emissions would require a huge drop in lifestyle for people in the developed countries and the loss of hope in the Third World for greater prosperity through economic growth.”
Such figures sound like a recipe for despair, but, speaking in Davos last week, Oppenheim backed Stern’s suggestion that they actually represented a huge investment opportunity. He said: “The transition to a low-carbon economy, if done right, has the potential to stimulate economic growth, create jobs and bring benefits to consumers. The ‘costs’ of this transition are in fact investments in new, 21st-century infrastructure that will pay off for generations to come – just as the ‘costs’ of investments in electrification, highways, and the internet paid off with very high returns for the societies that made them in the 20th century.”
Just how big that investment might be was shown in another report from the World Economic Forum calling for annual global investment of £360 billion in green-energy infrastructure including wind, solar power, geothermal energy and biofuels.
Michael Liebreich from London - based New Energy Finance, which advises investors on renewable-energy and low-carbon technology and the carbon markets and who co-wrote the Davos report, said: “Clean-energy opportunities can generate significant economic returns. The report shows that even after a tumultuous 2008, an index of the world’s 90 leading clean-energy companies had a five-year compounded-annualised return of almost 10%, unmatched by the world’s main stock indices.”
What, however, is needed to make investors pour such large sums of money into building the low-carbon power stations, electric vehicles and other green infrastructure that Stern sees as essential?
For Jeroen van der Veer, chief executive of Royal Dutch Shell, one of the world’s largest oil companies, the key is to put a price on carbon-dioxide emissions. Referring to next December’s crucial global-climate talks in Copenhagen, which will try to draw up a global treaty on cutting carbon emissions, he told a Davos audience: “The long-term framework has to include a price for carbon dioxide. There has to be a cost for emitting greenhouse gases.”
Under such a global carbon market each country would be set a target for carbon-dioxide emissions. If it exceeded that target, it would have to buy allowances from a country that had “quota” to spare. If it emitted less than its allowance, it could profit by selling the spare.
In his latest report, Key Elements of a Global Deal on Climate Change, Stern has estimated that, under such a scheme, developing countries could earn up to £70 billion a year from selling unused carbon-dioxide allowances to Europe, America and other advanced economies.
The discussions among business leaders and politicians in Davos last week offered some solutions for global warming, but the hopes they raised still make a stark contrast with the scientific evidence. A recent paper from Professor Kevin Anderson, director of the Tyndall Centre for Climate Change Research, the government’s leading academic research centre, contained a frightening warning.
It said: “The target set for the climate talks was to keep global temperature rises below 2C. At the moment, however, the level of emissions is rising so fast that we are heading for a world that is 4C- 5C warmer than now by 2100. That would be catastrophic for the environment and for humanity. Unless economic growth can be reconciled with unprecedented rates of decarbonisation, it is difficult to foresee anything other than a planned economic recession being compatible with stabilising the climate.”
Stern acknowledges the targets for cutting emissions are ambitious. “It is going to be tough,” he said. “We already have the equivalent of 420 parts per million of carbon dioxide in the air and we will reach 450ppm in eight years. Above that we have only a 50% chance of keeping global-temperature rise below 2C. We have to recognise that the threats are huge, as are the opportunities, and act on them now.”
Captains of industry go green
Sir Terry Leahy, chief executive of Tesco IT is no longer an option for a business to ignore climate change: it must be green to grow. Tesco has set itself challenging targets on carbon emissions, recycling and sustainable ways of working.
We aim to lead by investing millions in technology and by helping our customers to make a big difference.
Tony Hayward, chief executive of BP THE issue of sustainability is naturally on people’s minds in a downturn. But the truth is that for most companies – and certainly at BP – it is something more fundamental. Sustainability is about having a sense of balance, keeping an eye on the long term and on the world we all live in and work in.
Sir Richard Branson, founder of Virgin Group RUNNING a company in a green or sustainable way is now one of the most important factors for a chief executive.
Businesses have a responsibility beyond making profits for their shareholders. At Virgin we gauge how we impact on society and how we can make real and lasting change.
Sir Stuart Rose, chairman of Marks & Spencer I AM delighted that The Sunday Times is launching a green page.
I believe that businesses must take a lead and behave responsibly.
What is more, we will show over this year that good businesses can be profitable ones, making the case for ethical business more compelling than ever.
Andy Cosslett, chief executive of InterContinental Hotels Group THE green agenda is an increasing priority. Research shows that people are looking for hotels that manage their impact on the environment and will seek them out when booking somewhere to stay.
We have now launched a scheme to help our hotels reduce their energy consumption by up to 25%.
Justin King, chief executive of J Saisbury BEING a responsible retailer is part of our heritage and, despite the financial climate, environmental concerns are increasing in importance to our customers. It is essential that we take a long-term view when it comes to making a positive difference to reducing our impact on the environment.
Paul Golby, chief executive of Eon UK COMPANIES such as Eon look at ways to not only keep the country’s lights on but also to ensure energy is affordable, at the same time as combating climate change.
The temptation will always be to make the easy choices, but we cannot afford to do that because future generations won’t thank us.
Steve Holliday, chief executive of National Grid MINIMISING impact on the environment while delivering safe, secure and economic energy supplies is no longer an option, it is now a must.
At National Grid we are cutting our emissions, supporting renewable energy and introducing smart meters to help customers cut down the amount of energy they use.
Sam Laidlaw, chief executive of Centrica IN energy production and supply businesses, we face tremendous challenges in planning for a future in which Britain will need secure low-carbon energy supplies and an improvement in energy efficiency. In the coming years, we will invest billions of pounds in zero-carbon nuclear and renewable generation and new technologies in our British Gas business.
Ed Miliband, secretary of state at the Department of Energy and Climate Change THERE is a sense that the green industry is a jobs niche. But every business needs to be a green business and particularly at this time.
There are big opportunities here as we think about the future of our economy and about how Britain can lead in the industries of the future.
The reality is we will use much more oil
COMBATING climate change and cutting greenhouse-gas emissions may have been high on the agenda during last week’s World Economic Forum but the final message emerging from business leaders remained deeply contradictory,writes Jonathan Leake.
The Davos meeting had been designed with a strong green theme, with leading economists and scientists speaking at a raft of meetings to push the need to cut fossil-fuel use. They were feted and applauded wherever they went, but the economic reality is likely to be very different.
Abdalla Salem El Badri,secretary-general of the Organisation of Petroleum Exporting Countries (Opec), said that, for all the talk of replacing fossil fuels with renewables, his members were planning to increase output by 85% by 2030.
What’s more, he said, Opec’s immediate aim was to push oil prices from $40 a barrel to between $60 and $80 to raise the billions of pounds needed to invest in that extra capacity.
Ilham Aliyev, president of Azerbaijan, announced plans to double his country’s oil production by 2014.
Tony Hayward, group chief executive of BP, also foresaw a sharp increase in fossil-fuel use. He looked forward to Opec achieving its aim of $60–$80 a barrel because this would allow oil companies to exploit new oil reserves such as Canadian tar sands, whose high costs currently make them marginal. Such reserves are, however, also controversial because so much energy is needed to extract them that they generate even more emissions than conventional oil.
Mukesh Ambani, managing director of Reliance Industries in India, said his country was also investing heavily in the hydrocarbon reserves lying off its east coast and would soon be bringing hundreds of thousands of barrels of oil ashore for Indian consumers.
Ambani did add, however, that: “We have to remember that the world has only another 100 years’ worth of oil reserves. We do need to create a bridge to the decarbonised world in an ecologically responsible way.”
The International Energy Agency has said that on current trends total world energy demand will expand by 45% between now and 2030 to meet the twin demands of economic and population growth. Its latest figures show that emissions from fossil fuels are likely to surge from 27 billion tonnes of carbon dioxide a year at the moment to 40 billion tonnes by 2030.
Bosses hold key to green success
The Sunday Times
February 1, 2009
Managers who lead by example are most likely to make their firm an environmental star
Managers are the vital factor in the drive to make British business greener, according to The Sunday Times Best Green Companies survey.
Their pivotal role is revealed in a survey of employees conducted in all companies participating in the 2008 contest. They were asked 51 questions relating to their company’s environmental behaviour and practices, with 13 of the questions specifically looking at the role played by company bosses.
The survey showed a strong correlation between the behaviour and practices of bosses and their companies’ overall environmental performance in the eyes of employees. For the most part, the greenest companies had the greenest managers, with 37 of the top 50 companies achieving results for the 13 My Boss questions that lay within plus or minus three places of the ranking achieved by the companies overall in the employee survey.
“You can’t necessarily rely on policies and formal training to really drive key environmental messages home to staff – it needs to get personal,” said Will Ullstein, director of innovation at the market-research group Munro Global, the data analysts for The Sunday Times Best Green Companies.
“Bosses must lead by example and encourage employees to think about how their working practices may affect the environment.”
Asking staff to save the planet while bosses drive gas-guzzling cars is therefore out of the question. Firms should show staff what the environmental policy means in reality.
Good Energy, the renewable-power supplier, which notched up top marks in both the overall employee survey and the My Boss questions, achieved a remarkable 98% green score for managers encouraging staff to think about energy saving and being open to suggestions for environmental improvements. Green scores of 96% were gained for bosses promoting recycling and making the environment a high priority.
This environmental awareness was equally evident in companies not directly involved in a green industry. Berkeley Homes Urban Renaissance, formerly Berkeley Homes (Central London), ranked second in the UK on the My Boss questions and fourth overall in the employee survey. It achieved its highest green score of 94% for leaders regularly communicating with staff about environmental issues and 93% for encouraging staff to think about energy saving.
These businesses recognise the importance of employing managers who fully embrace the company’s green objectives and live by them.
Sarah Davidson, technical director of Bureau Veritas, the environmental consultancy and partner in producing the Green List, said: “If you look at some of the ground-breaking innovative environmental projects, you often see a visionary project manager or leader who has driven his ideas home and taken the team along with him.”
Good Energy’s chief executive and founder, Juliet Davenport, drives a carbon-efficient car if she has to drive to meetings, but opts for the train whenever she can and even takes her bike to reach her destination at the other end. “I am passionate about doing something about climate change and leading by example,” said Davenport, who encourages staff to be innovators.
Simon Challen, sustainability manager with Berkeley Homes Urban Renaissance, said the actions of managing directors at the firm made a statement to the staff.
There is plenty of that at coffin maker JC Atkinson & Son, Britain’s best green company in 2008. The factory is the embodiment of the managing director’s approach to the environment. The building was constructed on a brownfield site, the roof has extra skylights to reduce the need for lighting and rainwater is collected and used for flushing lavatories and cleaning vans.
Julian Atkinson’s green actions earn him scores of 93% for leading by example and 96% for being committed to the environment.
“Our staff are very proactive because they are directly involved with the changes,” said Atkinson. “The key is communication. Every day we make hundreds of coffins and every day we are on the factory floor, talking to our staff. On numerous occasions they have suggested changes. If they are for the benefit of the company these are actioned immediately.”
While the correlation between the My Boss scores and the overall employee rankings is close in the vast majority of successful companies, the survey results occasionally show management to be way ahead of the rest of the company in corporate greenness.
Hammerson, which runs London’s Brent Cross shopping centre, ranked 29th overall in the employee survey, but responses to the My Boss questions put it 16 places higher. In this instance, staff recognised the impeccable green credentials of managers, giving them 86% and 87% green scores for commitment to environmental improvements and openness to ideas respectively.
The data suggest that it is more difficult for the boss to set the example in large firms, which means the environmental message has to be reinforced at every level of management, said Ullstein of Munro Global. Entry is now open for the 2009 Best Green Companies contest. For details on how to enter, visit timesonline.co.uk/ bestgreencompanies . Registrations close on February 18.
February 1, 2009
Managers who lead by example are most likely to make their firm an environmental star
Managers are the vital factor in the drive to make British business greener, according to The Sunday Times Best Green Companies survey.
Their pivotal role is revealed in a survey of employees conducted in all companies participating in the 2008 contest. They were asked 51 questions relating to their company’s environmental behaviour and practices, with 13 of the questions specifically looking at the role played by company bosses.
The survey showed a strong correlation between the behaviour and practices of bosses and their companies’ overall environmental performance in the eyes of employees. For the most part, the greenest companies had the greenest managers, with 37 of the top 50 companies achieving results for the 13 My Boss questions that lay within plus or minus three places of the ranking achieved by the companies overall in the employee survey.
“You can’t necessarily rely on policies and formal training to really drive key environmental messages home to staff – it needs to get personal,” said Will Ullstein, director of innovation at the market-research group Munro Global, the data analysts for The Sunday Times Best Green Companies.
“Bosses must lead by example and encourage employees to think about how their working practices may affect the environment.”
Asking staff to save the planet while bosses drive gas-guzzling cars is therefore out of the question. Firms should show staff what the environmental policy means in reality.
Good Energy, the renewable-power supplier, which notched up top marks in both the overall employee survey and the My Boss questions, achieved a remarkable 98% green score for managers encouraging staff to think about energy saving and being open to suggestions for environmental improvements. Green scores of 96% were gained for bosses promoting recycling and making the environment a high priority.
This environmental awareness was equally evident in companies not directly involved in a green industry. Berkeley Homes Urban Renaissance, formerly Berkeley Homes (Central London), ranked second in the UK on the My Boss questions and fourth overall in the employee survey. It achieved its highest green score of 94% for leaders regularly communicating with staff about environmental issues and 93% for encouraging staff to think about energy saving.
These businesses recognise the importance of employing managers who fully embrace the company’s green objectives and live by them.
Sarah Davidson, technical director of Bureau Veritas, the environmental consultancy and partner in producing the Green List, said: “If you look at some of the ground-breaking innovative environmental projects, you often see a visionary project manager or leader who has driven his ideas home and taken the team along with him.”
Good Energy’s chief executive and founder, Juliet Davenport, drives a carbon-efficient car if she has to drive to meetings, but opts for the train whenever she can and even takes her bike to reach her destination at the other end. “I am passionate about doing something about climate change and leading by example,” said Davenport, who encourages staff to be innovators.
Simon Challen, sustainability manager with Berkeley Homes Urban Renaissance, said the actions of managing directors at the firm made a statement to the staff.
There is plenty of that at coffin maker JC Atkinson & Son, Britain’s best green company in 2008. The factory is the embodiment of the managing director’s approach to the environment. The building was constructed on a brownfield site, the roof has extra skylights to reduce the need for lighting and rainwater is collected and used for flushing lavatories and cleaning vans.
Julian Atkinson’s green actions earn him scores of 93% for leading by example and 96% for being committed to the environment.
“Our staff are very proactive because they are directly involved with the changes,” said Atkinson. “The key is communication. Every day we make hundreds of coffins and every day we are on the factory floor, talking to our staff. On numerous occasions they have suggested changes. If they are for the benefit of the company these are actioned immediately.”
While the correlation between the My Boss scores and the overall employee rankings is close in the vast majority of successful companies, the survey results occasionally show management to be way ahead of the rest of the company in corporate greenness.
Hammerson, which runs London’s Brent Cross shopping centre, ranked 29th overall in the employee survey, but responses to the My Boss questions put it 16 places higher. In this instance, staff recognised the impeccable green credentials of managers, giving them 86% and 87% green scores for commitment to environmental improvements and openness to ideas respectively.
The data suggest that it is more difficult for the boss to set the example in large firms, which means the environmental message has to be reinforced at every level of management, said Ullstein of Munro Global. Entry is now open for the 2009 Best Green Companies contest. For details on how to enter, visit timesonline.co.uk/ bestgreencompanies . Registrations close on February 18.
Go green and save money
The Sunday Times
February 1, 2009
Simple changes yield better results than splashing out on the latest technology
Andrew Stone
Going green and becoming more profitable have gone hand in hand for Lucho Zuidema and his wife, Christine, who have spent the past three years transforming their Brighton guesthouse into an energy-efficient eco B&B.
The Zuidemas have put a turf roof on a modern extension of their Regency-era building for better insulation and installed an advanced boiler and central-heating system so they can control the temperature on each floor and in each room.
They didn’t stop there. The guesthouse is run in ways that minimise waste and maximise recycling. The Zuidemas even compost their waste food to spread on an allotment where they grow produce for guests.
The couple have managed to cut their annual energy bill to only £7,000, which represents a tiny part of their £180,000 outgoings.
“Most of the big improvements, such as the grass roof, which cost us £1,000, have already paid off in energy savings,” said Lucho Zuidema. “It also sets us apart from other Brighton guesthouses. After we made the changes our bookings went up about 80%.”
Many businesses may think that cutting their carbon footprint in a recession is a luxury they can’t afford, but it can save money, said Hugh Jones of the Carbon Trust, which this week launches a campaign to help small firms find quick ways of cutting energy use.
“Cutting energy use does save a lot of money,” said Jones. “We have found that many firms can save up to 20% on their energy bill by using no-cost or low-cost measures.”
Measuring energy use is the first place to start, he said. “If you can measure, you can manage. Even looking at your old energy bills can give you most of the information you need, although many firms are turning to smart meters that give valuable energy-use information to analyse.”
The Carbon Trust offers free energy audits to small firms as well as online tools to help them measure their carbon footprint. These services may also help to identify energy-efficient equipment and secure interest-free loans of up to £200,000 from the Carbon Trust to help pay for it.
Once you have identified areas for improvement, don’t try to do everything at once, said Jones. “If you have more than one site, for example, focus on the one that is most likely to be wasting energy, the one with the most energy-intensive building.”
Changing the way employees think about energy use is another easy option. “Reminding people to turn lights off is boring but a lot of companies can make significant savings by encouraging changes in behaviour,” he said.
Such changes will also help your business maintain its new levels of energy efficiency, said Jones. “It’s something you need to constantly manage and improve. If you have just installed a new energy-saving LED lighting system, for example, you still need to ensure it is used responsibly.”
In fact, investment in technology such as new lighting or renewable-energy generation on its own seldom works, said Gary Parke, chief executive of Evolve Energy, a consultancy that helps businesses reduce their energy use.
Although much talked about, renewable-energy generation in particular often fails to live up to the hype, said Parke. “We see so many technologies being misapplied, such as costly solar projects that end up being switched off because they don’t work.
“There’s a lot of talk about renewable energy but energy reduction is far more cost-effective. There are some interesting technologies coming through, such as biomass boilers or ground-source heat pumps,” said Parke. “But they won’t offer you the silver bullet – they have to be part of an overall energy-management programme.
“It’s amazing how many people don’t know what their overall energy bill is, yet it is often the second-largest business cost after staff.
“Get out those old utility bills to see how much they have gone up both in terms of cost and energy usage. Have a walk round your premises. Look for the old, dusty lagging or the draughty windows – that’s where you should start.”
Patching up a building may seem boring compared with installing a wind turbine on top of it, but for those prepared to make the effort the payoffs of a considered energy-reduction plan can be numerous, said Zuidema.
“It does cost us in terms of things like effort and labour but it’s worth it. The more efficient you are as a user of energy, the more efficient your business will be. You might spend £10,000, but for us that kind of investment came back very quickly.
“We have also found that it’s a virtuous circle. By being more energy efficient we attract new customers, which improves our occupancy rates, which improves our energy use per person.
“It makes business sense but without being too preachy about it, I think there’s a moral responsibility to do it as well. Climate change is happening and we should all be a part of doing something about it.”
February 1, 2009
Simple changes yield better results than splashing out on the latest technology
Andrew Stone
Going green and becoming more profitable have gone hand in hand for Lucho Zuidema and his wife, Christine, who have spent the past three years transforming their Brighton guesthouse into an energy-efficient eco B&B.
The Zuidemas have put a turf roof on a modern extension of their Regency-era building for better insulation and installed an advanced boiler and central-heating system so they can control the temperature on each floor and in each room.
They didn’t stop there. The guesthouse is run in ways that minimise waste and maximise recycling. The Zuidemas even compost their waste food to spread on an allotment where they grow produce for guests.
The couple have managed to cut their annual energy bill to only £7,000, which represents a tiny part of their £180,000 outgoings.
“Most of the big improvements, such as the grass roof, which cost us £1,000, have already paid off in energy savings,” said Lucho Zuidema. “It also sets us apart from other Brighton guesthouses. After we made the changes our bookings went up about 80%.”
Many businesses may think that cutting their carbon footprint in a recession is a luxury they can’t afford, but it can save money, said Hugh Jones of the Carbon Trust, which this week launches a campaign to help small firms find quick ways of cutting energy use.
“Cutting energy use does save a lot of money,” said Jones. “We have found that many firms can save up to 20% on their energy bill by using no-cost or low-cost measures.”
Measuring energy use is the first place to start, he said. “If you can measure, you can manage. Even looking at your old energy bills can give you most of the information you need, although many firms are turning to smart meters that give valuable energy-use information to analyse.”
The Carbon Trust offers free energy audits to small firms as well as online tools to help them measure their carbon footprint. These services may also help to identify energy-efficient equipment and secure interest-free loans of up to £200,000 from the Carbon Trust to help pay for it.
Once you have identified areas for improvement, don’t try to do everything at once, said Jones. “If you have more than one site, for example, focus on the one that is most likely to be wasting energy, the one with the most energy-intensive building.”
Changing the way employees think about energy use is another easy option. “Reminding people to turn lights off is boring but a lot of companies can make significant savings by encouraging changes in behaviour,” he said.
Such changes will also help your business maintain its new levels of energy efficiency, said Jones. “It’s something you need to constantly manage and improve. If you have just installed a new energy-saving LED lighting system, for example, you still need to ensure it is used responsibly.”
In fact, investment in technology such as new lighting or renewable-energy generation on its own seldom works, said Gary Parke, chief executive of Evolve Energy, a consultancy that helps businesses reduce their energy use.
Although much talked about, renewable-energy generation in particular often fails to live up to the hype, said Parke. “We see so many technologies being misapplied, such as costly solar projects that end up being switched off because they don’t work.
“There’s a lot of talk about renewable energy but energy reduction is far more cost-effective. There are some interesting technologies coming through, such as biomass boilers or ground-source heat pumps,” said Parke. “But they won’t offer you the silver bullet – they have to be part of an overall energy-management programme.
“It’s amazing how many people don’t know what their overall energy bill is, yet it is often the second-largest business cost after staff.
“Get out those old utility bills to see how much they have gone up both in terms of cost and energy usage. Have a walk round your premises. Look for the old, dusty lagging or the draughty windows – that’s where you should start.”
Patching up a building may seem boring compared with installing a wind turbine on top of it, but for those prepared to make the effort the payoffs of a considered energy-reduction plan can be numerous, said Zuidema.
“It does cost us in terms of things like effort and labour but it’s worth it. The more efficient you are as a user of energy, the more efficient your business will be. You might spend £10,000, but for us that kind of investment came back very quickly.
“We have also found that it’s a virtuous circle. By being more energy efficient we attract new customers, which improves our occupancy rates, which improves our energy use per person.
“It makes business sense but without being too preachy about it, I think there’s a moral responsibility to do it as well. Climate change is happening and we should all be a part of doing something about it.”
Turning an oil state into a renewable-energy leader
The Sunday Times
February 1, 2009
With $15bn to spend, the chief of the project is being besieged by technology firms that want a piece of the action
As Sultan Al Jaber breezed into the room, wearing a flowing white dishdash and distractedly tapping on his iPhone, he looked every bit the harried chief executive. Any notion of a long chat was quickly extinguished.
“No, no,” he said to the suggestion of a quarter of an hour for an interview.
“Just 10 minutes, please.”
Al Jaber, the 35-year-old chief executive of Masdar, Abu Dhabi’s $15 billion alternative-energy company, had a lot of people to see. Or rather, there were a lot of people who wanted to see him. Outside, a horde of energy executives, politicians and hangers-on milled about, hoping to grab a few minutes as he flitted between meetings at Abu Dhabi’s annual alternative-energy summit.
Al Jaber was the host. And for a few days he just might have been the most popular man in the country. It is easy to see why. At a time when billions of dollars are being drawn back from every corner of the economy, Al Jaber has been given a $15 billion cheque by Abu Dhabi’s rulers. His task: to transform the emirate, holder of the world’s fifth-largest oil reserves, into the Silicon Valley of renewable energy.
Masdar is the engine for the ambition. “We want to be the Shell, the BP of renewable energy,” said Al Jaber.
In today’s financial crisis, his is a rare position — ambition that is not held back by a lack of resources. “The world is currently undergoing an economic downturn, but this does not affect us,” he said. “Our appetite is the same. We will be a world-leading, recognised brand by 2020. It’s ambitious, but everything in Masdar is ambitious.”
Since the crown prince Sheik Mohammed bin Zayed Al Nahyan created Masdar in April 2006, Al Jaber has been busy putting the emirate’s money to work. Last year he bought into the largest proposed offshore wind farm in the world, the London Array. He has invested millions in at least 17 renewable- technology companies in America and Europe. He recently signed a deal to help Nigeria reduce natural-gas flaring at its oil platforms, and is a founding member of Australia’s new Carbon Capture and Storage Institute.
In a land that glorifies ostentation — the United Arab Emirates is home to the indoor ski-slope, the half-mile-high skyscraper, man-made islands, and diamond-encrusted mobile phones —
Abu Dhabi’s approach to renewable energy is no different. For the conference’s closing speech, for example, Al Jaber lured Tony Blair for what was rumoured to be a six-figure fee.
To some the frenetic pace looks more scattershot than methodical, more about grabbing headlines than sound business sense. “It’s a feeding frenzy,” said one executive who was hoping to convince Masdar to invest in his company. “They are the only ones who have any money.”
Consider what Al Jaber has dubbed the “heart of the entire programme”, Masdar City. A $22 billion project of astounding, and some would say unrealistic, ambition, the aim is to build from the ground up the world’s first zero-emission city powered completely by renewable energy. Al Jaber has set aside nearly a third of his cash pile — $4.5 billion — to help get the city built. He hopes to find the rest elsewhere: energy companies, debt markets and universities.
The project sparks admiration and scepticism in equal measure. Al Jaber’s vision, however, is clear. “We don’t want to do this alone. We want to bring in partners, foreign direct investment, but smart money. Because this money will come with technology, it will come with talent; it will come with brains,” he said. “We need to position Abu Dhabi for the post fossil-fuel era, to diversify our economy away from oil and into a knowledge economy.”
Al Jaber doesn’t get back to southern California as much as he would like. He spent several years in Los Angeles, where he earned a degree in chemical engineering and a master’s in business. Between classes he fitted in the occasional game of basketball. At an imposing 6 ft 4in, he has the frame for the sport, but said he doesn’t get much time to play these days.
After earning a PhD in economics at Coventry University, he moved back to Abu Dhabi, where he began working for the state-oil company Adnoc. It wasn’t until he moved to Mubadala, the state investment vehicle, that he was handed the job that led to the creation of Masdar. “I was tasked with diversifying the Abu Dhabi economy. It was a very simple thing to do, coming from something we do best, which is energy,” he said. “We saw that the energy markets were evolving, with substantial growth in alternative energy. We could have viewed that as a threat to Abu Dhabi as an oil and gas producer. We saw it as an opportunity.”
After leading a delegation from the emirate on a four-month, round-the-world fact-finding mission to “get to know” the renewables sector, the idea for Masdar was born.
There are several legs to its approach. The flagship is, of course, the city, which Al Jaber hopes will make Abu Dhabi the world’s first true “eco-cluster”, a place where companies and academics can come to develop and test innovations and technologies for the post-oil world. It also has a $250m “clean technology” fund that acts as the emirate’s venture-capital arm, investing in small, promising companies in the alternative-energy industry.
And then there are the larger direct investments in big projects or companies. Masdar recently signed an alliance to develop renewable projects with Eon, Europe’s largest quoted utility. This summer it broke ground in Germany on what will be one of the largest solar-panel plants in Europe.
There will, of course, be missteps. The first big one may have already been made in Britain. Last summer Royal Dutch Shell told its partners in the London Array, a proposed £3 billion offshore wind farm, that it wanted to get out of the project because the economics were looking increasingly stretched.
For Britain’s aspirations of a clean-energy future, it is a flagship project. Without Shell to shoulder up to £1 billion of the building costs, not to mention the risk of bringing the scheme to fruition, the London Array was on the verge of collapse.
Enter Masdar. Two months after Eon and Dong bought out Shell, Masdar took a one-third stake in the project. It looked as if the project was saved. Yet today, only three months after its dramatic intervention, there are fresh rumours that the project could be scrapped.
Ziad Tassabehji, head of utilities and asset management at Masdar, said: “We are doing our best for it to happen but there are a lot of variables that need to be fixed. A feasibility study was done, but many of the assumptions in it no longer apply.” Eon has expressed similar misgivings.
Whatever the outcome, Abu Dhabi has won universal plaudits for diving so wholeheartedly into alternative energy.
As one of the world’s biggest oil producers and highest per-capita polluters, this is an inspiring initiative.
It is up to Al Jaber to make certain that the vision of a desert ecotopia is no mirage. “The reason we are so confident is simply because we have a leadership that has committed itself and its resources to making this a reality,” he said. “When a decision is made here, things happen fast.”
February 1, 2009
With $15bn to spend, the chief of the project is being besieged by technology firms that want a piece of the action
As Sultan Al Jaber breezed into the room, wearing a flowing white dishdash and distractedly tapping on his iPhone, he looked every bit the harried chief executive. Any notion of a long chat was quickly extinguished.
“No, no,” he said to the suggestion of a quarter of an hour for an interview.
“Just 10 minutes, please.”
Al Jaber, the 35-year-old chief executive of Masdar, Abu Dhabi’s $15 billion alternative-energy company, had a lot of people to see. Or rather, there were a lot of people who wanted to see him. Outside, a horde of energy executives, politicians and hangers-on milled about, hoping to grab a few minutes as he flitted between meetings at Abu Dhabi’s annual alternative-energy summit.
Al Jaber was the host. And for a few days he just might have been the most popular man in the country. It is easy to see why. At a time when billions of dollars are being drawn back from every corner of the economy, Al Jaber has been given a $15 billion cheque by Abu Dhabi’s rulers. His task: to transform the emirate, holder of the world’s fifth-largest oil reserves, into the Silicon Valley of renewable energy.
Masdar is the engine for the ambition. “We want to be the Shell, the BP of renewable energy,” said Al Jaber.
In today’s financial crisis, his is a rare position — ambition that is not held back by a lack of resources. “The world is currently undergoing an economic downturn, but this does not affect us,” he said. “Our appetite is the same. We will be a world-leading, recognised brand by 2020. It’s ambitious, but everything in Masdar is ambitious.”
Since the crown prince Sheik Mohammed bin Zayed Al Nahyan created Masdar in April 2006, Al Jaber has been busy putting the emirate’s money to work. Last year he bought into the largest proposed offshore wind farm in the world, the London Array. He has invested millions in at least 17 renewable- technology companies in America and Europe. He recently signed a deal to help Nigeria reduce natural-gas flaring at its oil platforms, and is a founding member of Australia’s new Carbon Capture and Storage Institute.
In a land that glorifies ostentation — the United Arab Emirates is home to the indoor ski-slope, the half-mile-high skyscraper, man-made islands, and diamond-encrusted mobile phones —
Abu Dhabi’s approach to renewable energy is no different. For the conference’s closing speech, for example, Al Jaber lured Tony Blair for what was rumoured to be a six-figure fee.
To some the frenetic pace looks more scattershot than methodical, more about grabbing headlines than sound business sense. “It’s a feeding frenzy,” said one executive who was hoping to convince Masdar to invest in his company. “They are the only ones who have any money.”
Consider what Al Jaber has dubbed the “heart of the entire programme”, Masdar City. A $22 billion project of astounding, and some would say unrealistic, ambition, the aim is to build from the ground up the world’s first zero-emission city powered completely by renewable energy. Al Jaber has set aside nearly a third of his cash pile — $4.5 billion — to help get the city built. He hopes to find the rest elsewhere: energy companies, debt markets and universities.
The project sparks admiration and scepticism in equal measure. Al Jaber’s vision, however, is clear. “We don’t want to do this alone. We want to bring in partners, foreign direct investment, but smart money. Because this money will come with technology, it will come with talent; it will come with brains,” he said. “We need to position Abu Dhabi for the post fossil-fuel era, to diversify our economy away from oil and into a knowledge economy.”
Al Jaber doesn’t get back to southern California as much as he would like. He spent several years in Los Angeles, where he earned a degree in chemical engineering and a master’s in business. Between classes he fitted in the occasional game of basketball. At an imposing 6 ft 4in, he has the frame for the sport, but said he doesn’t get much time to play these days.
After earning a PhD in economics at Coventry University, he moved back to Abu Dhabi, where he began working for the state-oil company Adnoc. It wasn’t until he moved to Mubadala, the state investment vehicle, that he was handed the job that led to the creation of Masdar. “I was tasked with diversifying the Abu Dhabi economy. It was a very simple thing to do, coming from something we do best, which is energy,” he said. “We saw that the energy markets were evolving, with substantial growth in alternative energy. We could have viewed that as a threat to Abu Dhabi as an oil and gas producer. We saw it as an opportunity.”
After leading a delegation from the emirate on a four-month, round-the-world fact-finding mission to “get to know” the renewables sector, the idea for Masdar was born.
There are several legs to its approach. The flagship is, of course, the city, which Al Jaber hopes will make Abu Dhabi the world’s first true “eco-cluster”, a place where companies and academics can come to develop and test innovations and technologies for the post-oil world. It also has a $250m “clean technology” fund that acts as the emirate’s venture-capital arm, investing in small, promising companies in the alternative-energy industry.
And then there are the larger direct investments in big projects or companies. Masdar recently signed an alliance to develop renewable projects with Eon, Europe’s largest quoted utility. This summer it broke ground in Germany on what will be one of the largest solar-panel plants in Europe.
There will, of course, be missteps. The first big one may have already been made in Britain. Last summer Royal Dutch Shell told its partners in the London Array, a proposed £3 billion offshore wind farm, that it wanted to get out of the project because the economics were looking increasingly stretched.
For Britain’s aspirations of a clean-energy future, it is a flagship project. Without Shell to shoulder up to £1 billion of the building costs, not to mention the risk of bringing the scheme to fruition, the London Array was on the verge of collapse.
Enter Masdar. Two months after Eon and Dong bought out Shell, Masdar took a one-third stake in the project. It looked as if the project was saved. Yet today, only three months after its dramatic intervention, there are fresh rumours that the project could be scrapped.
Ziad Tassabehji, head of utilities and asset management at Masdar, said: “We are doing our best for it to happen but there are a lot of variables that need to be fixed. A feasibility study was done, but many of the assumptions in it no longer apply.” Eon has expressed similar misgivings.
Whatever the outcome, Abu Dhabi has won universal plaudits for diving so wholeheartedly into alternative energy.
As one of the world’s biggest oil producers and highest per-capita polluters, this is an inspiring initiative.
It is up to Al Jaber to make certain that the vision of a desert ecotopia is no mirage. “The reason we are so confident is simply because we have a leadership that has committed itself and its resources to making this a reality,” he said. “When a decision is made here, things happen fast.”
Green city rises from desert
The Sunday Times
February 1, 2009
Danny Fortson
About 10 miles along the motorway out of Abu Dhabi, Khaled Awad was trying his best to get visitors excited about a patch of scrubland. “This will be the city of the future,” he said, gesturing toward the shrubs and dirt. “Zero-carbon and run on totally renewable energy, it will be one of the first and biggest eco-clusters in the world.”
It takes some imagination. But Awad, head of development at Masdar City, insists that in a few years this plot of desert will be transformed into the most technologically advanced, environmentally friendly city in the world. Designed by the famed British architect Lord Foster, the 6.5 square kilometre “city of the future” will be suspended on stilts 20 ft above the ground, increasing air circulation and reducing the heat transferred from the hot desert floor.
It will be split into three decks that separate transport from residential and public spaces and cars won’t be allowed anywhere. “With the design, we wanted to shock the public, to get them thinking about the possibilities of what a city can be,” said Awad.
On the lower deck residents will be ferried round the city by thousands of Personal Rapid Transport Pods, which look like space-age buggies for four people. They are controlled by touch screens and guided by sensors in the ground.
About 20 ft above will be the main pedestrianised street level, where businesses, shops and homes will be located. It will be vehicle-free except for Segway personal transporters and bicycles. Overhead, a light railway will run through the heart of the town and connect to Abu Dhabi City.
Transport will be one of the biggest differences between this city and traditional ones. Gerard Evenden, senior partner at Foster + Partners, said: “The difficulty with driverless vehicles is the interface with humans. You can’t control humans. By layering the city, we can make the transport system super-efficient and the street level a much better experience. There will be no car pollution, it will be safer and have more open spaces. Nobody has attempted anything like this.”
Water will be drawn from dew and a solar-powered desalination plant. Most of the electricity for the 50,000 residents will be generated by solar panels on every roof and hung over the narrow alleys where they will double as sun shades to keep the temperature low and reduce the need for air conditioning.
Non-organic waste will be recycled. Organic waste will be converted into fuel for power plants. Dirty water will be processed and used to irrigate green spaces. Overall, Masdar City will need about a quarter of the energy of a normal city of comparable size. It will produce no waste, emit no carbon dioxide, and the project will be completed by 2016.
That’s the plan anyway. Today, all that can be seen from the viewing platform are a few tractors and a pair of cranes in the distance, working on the first component of the city, the Masdar Institute of Science and Technology, a university that will specialise in renewable-energy technology.
In total, the city will cost $22 billion. Sultan Al Jaber, chief executive of Masdar, Abu Dhabi’s renewable-energy company, has called it the “heart” of the initiative he is leading to convert the emirate, one of the world’s most profligate energy-using petro states, into a model of green technology.
Of the $15 billion that Masdar, the company, has to invest, $4.5 billion has been set aside to get the city off the ground. Awad hopes to raise the rest from partners and future tenants of what he says will be a “living laboratory” for a non-fossil-fuel-based existence.
“The problem with the renewable-energy industry is that it is too fragmented,” said Al Jaber. “This is where the idea for Masdar City came from. We said, Let’s bring it all together within the same boundaries, like the Silicon Valley model.”
Making this a reality will be difficult. In the best of times coming up with the extra $18 billion for a science project of such monumental scale would not be easy. Trying to do it in the middle of the worst financial crisis since the Great Depression and a precipitous devaluation of Abu Dhabi’s primary resource will be even more challenging. The oil price has dropped about 70% since its peak last summer.
Al Jaber brushed off such concerns. “We are looking beyond the downturn,” he said. “Nothing has been delayed, nothing has been postponed. We are in this for the long term.”
Part of the city’s running costs will by covered by the UN’s Clean Development Mechanism, the controversial scheme under which companies can earn carbon credits by funding low-carbon schemes in the developing world. Awad expects collect up to 1m credits each year that he could sell on the open market. At today’s prices, that would mean an extra $15m a year.
The “eco-city” idea isn’t new. China has begun work on one in Tianjin. In Britain, up to 10 “eco-towns” have been proposed, but these are a universe away from the ambitions of Masdar. Al Jaber told a US congressional hearing last summer that, “the city will be the blueprint for the cities of the future”.
It is a central part of the pledge the emirate made last month to increase the energy it generates from renewable resources from virtually nothing today to 7% by 2020. Some big names have already taken the plunge. GE has signed up as the first tenant, and MIT is a sponsor of the university.
It won’t be as green as it seems. Food will have to be imported. The rail system to Abu Dhabi City will not be enough for the expected traffic, so Masdar City will be ringed by large car parks for those who want to drive there.
Development experts also point out that cities simply don’t appear but grow organically. What seems to work on the drawing board may fare less well in the real world. Indeed, not far from Abu Dhabi’s future is its present: a jumble of half-built skyscrapers, traffic jams and pollution.
Would it not be better to plough $22 billion into improving a city where people are already living and working?
“Cities over the past 50 years have been models for abusing technology. We want to change that,” said Awad. “If we make a success of the city, it won’t any longer be, ‘Why Masdar City?’. It will be: ‘Look at what Masdar City has done, now why not China? Why not India?”
February 1, 2009
Danny Fortson
About 10 miles along the motorway out of Abu Dhabi, Khaled Awad was trying his best to get visitors excited about a patch of scrubland. “This will be the city of the future,” he said, gesturing toward the shrubs and dirt. “Zero-carbon and run on totally renewable energy, it will be one of the first and biggest eco-clusters in the world.”
It takes some imagination. But Awad, head of development at Masdar City, insists that in a few years this plot of desert will be transformed into the most technologically advanced, environmentally friendly city in the world. Designed by the famed British architect Lord Foster, the 6.5 square kilometre “city of the future” will be suspended on stilts 20 ft above the ground, increasing air circulation and reducing the heat transferred from the hot desert floor.
It will be split into three decks that separate transport from residential and public spaces and cars won’t be allowed anywhere. “With the design, we wanted to shock the public, to get them thinking about the possibilities of what a city can be,” said Awad.
On the lower deck residents will be ferried round the city by thousands of Personal Rapid Transport Pods, which look like space-age buggies for four people. They are controlled by touch screens and guided by sensors in the ground.
About 20 ft above will be the main pedestrianised street level, where businesses, shops and homes will be located. It will be vehicle-free except for Segway personal transporters and bicycles. Overhead, a light railway will run through the heart of the town and connect to Abu Dhabi City.
Transport will be one of the biggest differences between this city and traditional ones. Gerard Evenden, senior partner at Foster + Partners, said: “The difficulty with driverless vehicles is the interface with humans. You can’t control humans. By layering the city, we can make the transport system super-efficient and the street level a much better experience. There will be no car pollution, it will be safer and have more open spaces. Nobody has attempted anything like this.”
Water will be drawn from dew and a solar-powered desalination plant. Most of the electricity for the 50,000 residents will be generated by solar panels on every roof and hung over the narrow alleys where they will double as sun shades to keep the temperature low and reduce the need for air conditioning.
Non-organic waste will be recycled. Organic waste will be converted into fuel for power plants. Dirty water will be processed and used to irrigate green spaces. Overall, Masdar City will need about a quarter of the energy of a normal city of comparable size. It will produce no waste, emit no carbon dioxide, and the project will be completed by 2016.
That’s the plan anyway. Today, all that can be seen from the viewing platform are a few tractors and a pair of cranes in the distance, working on the first component of the city, the Masdar Institute of Science and Technology, a university that will specialise in renewable-energy technology.
In total, the city will cost $22 billion. Sultan Al Jaber, chief executive of Masdar, Abu Dhabi’s renewable-energy company, has called it the “heart” of the initiative he is leading to convert the emirate, one of the world’s most profligate energy-using petro states, into a model of green technology.
Of the $15 billion that Masdar, the company, has to invest, $4.5 billion has been set aside to get the city off the ground. Awad hopes to raise the rest from partners and future tenants of what he says will be a “living laboratory” for a non-fossil-fuel-based existence.
“The problem with the renewable-energy industry is that it is too fragmented,” said Al Jaber. “This is where the idea for Masdar City came from. We said, Let’s bring it all together within the same boundaries, like the Silicon Valley model.”
Making this a reality will be difficult. In the best of times coming up with the extra $18 billion for a science project of such monumental scale would not be easy. Trying to do it in the middle of the worst financial crisis since the Great Depression and a precipitous devaluation of Abu Dhabi’s primary resource will be even more challenging. The oil price has dropped about 70% since its peak last summer.
Al Jaber brushed off such concerns. “We are looking beyond the downturn,” he said. “Nothing has been delayed, nothing has been postponed. We are in this for the long term.”
Part of the city’s running costs will by covered by the UN’s Clean Development Mechanism, the controversial scheme under which companies can earn carbon credits by funding low-carbon schemes in the developing world. Awad expects collect up to 1m credits each year that he could sell on the open market. At today’s prices, that would mean an extra $15m a year.
The “eco-city” idea isn’t new. China has begun work on one in Tianjin. In Britain, up to 10 “eco-towns” have been proposed, but these are a universe away from the ambitions of Masdar. Al Jaber told a US congressional hearing last summer that, “the city will be the blueprint for the cities of the future”.
It is a central part of the pledge the emirate made last month to increase the energy it generates from renewable resources from virtually nothing today to 7% by 2020. Some big names have already taken the plunge. GE has signed up as the first tenant, and MIT is a sponsor of the university.
It won’t be as green as it seems. Food will have to be imported. The rail system to Abu Dhabi City will not be enough for the expected traffic, so Masdar City will be ringed by large car parks for those who want to drive there.
Development experts also point out that cities simply don’t appear but grow organically. What seems to work on the drawing board may fare less well in the real world. Indeed, not far from Abu Dhabi’s future is its present: a jumble of half-built skyscrapers, traffic jams and pollution.
Would it not be better to plough $22 billion into improving a city where people are already living and working?
“Cities over the past 50 years have been models for abusing technology. We want to change that,” said Awad. “If we make a success of the city, it won’t any longer be, ‘Why Masdar City?’. It will be: ‘Look at what Masdar City has done, now why not China? Why not India?”
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