Revenge on the Dragons

The Sunday Times
February 8, 2009

A green firm ridiculed on TV is having the last laugh - turning over £1.5m a year

The Dragons were scathing about Very-PC... but now it's a success

WHAT could be better than appearing on Dragons’ Den, being lauded by the judges and showered with cash? Well, how about appearing on the BBC show, being pilloried and humiliated, then seeing your business succeed anyway – thus thumbing your nose at the television’s experts?
That was the experience of Very-PC, a start-up that specialises in energy-efficient computers. It was formed five years ago by three idealistic graduates and today employs 20 people in a smart new factory. Last year the company made a profit of £321,000 on a turnover of £763,000 (profits were boosted by some outstanding consultancy payments).
For 2008-9, predicted turnover is £1.5m. The future may look bright for Peter Hopton, the managing director, but he said the sweetest part of his success was proving the Dragons wrong. “They really went for the jugular,” he said. “It’s very hard to be on the receiving end of that. I think I survived due to the resolve of the company’s founders and support from friends and family. After the programme was broadcast we got 100 letters and e-mails of support from customers and the public.”
Few would-be entrepreneurs appearing on the show experienced quite such a mauling as Hopton did last August. His valuation of the company at £5m and request for £250,000 investment drew scorn and anger from several of the entrepreneurs and he was sent packing without a penny.
Peter Jones, the Dragon who started out running a computer company and now owns Phones International Group, called Very-PC “an averagely crap business”, and when told that Hopton had been in talks with other investors asked: “Are they in this country, or do they live on another planet? Are they human?” James Caan, the fifth dragon (not pictured), was also scornful and said: “I’ll tell you the offer I’m going to make you – I’m out.”
Like all good business ideas, Very-PC is based on a relatively simple premise: saving some of the vast amount of energy wasted by computer systems from the big manufacturers.
“What we do is not that revolutionary, it’s just really good engineering,” said Hopton. Most of the wastage stems from power-supply equipment that generates excess heat and the big, inefficient fans needed to cool this equipment.
“The large IT companies are concerned with economies of scale and with fitting standard components into standard boxes – energy efficiency is a secondary consideration,” said Hopton. “What we do is to cherry-pick processors, fans and power-supply equipment from around the world. We buy in components from Germany, Ireland, Thailand and other countries, assemble them ourselves in tailor-made boxes and run them with our unique software that optimises power supply.”
The firm’s products tend to cost 10% to 15% more than the equivalent from the global manufacturers, but Very-PC says this is easily outweighed by reduced electricity bills. Saving power in a computer that is turned off may seem a tiny element in the battle against increasing CO2 emissions, but Hopton points out that most computers spend 90% of the time doing nothing, either in sleep mode, turned off or just waiting for the user to hit the next key.
“By tweaking the voltage of components and using our own modification of Windows drivers and power-management software, we can reduce the 100 watts used by a computer that is turned on and doing nothing to less than 30 watts.”
Hopton set up the company with his brother Andrew, who is sales director, and a friend, Simon Bown, in charge of technical support, after all three graduated in electrical engineering from Sheffield University. Very-PC’s new plant, built on an old landfill site in the city’s Parkwood Springs district, was opened last year by Hilary Benn, the environment secretary. Sheffield University and other educational institutions are now among the company’s largest customers.
The importance of energy efficiency in the IT sector is underlined by Tim Danton, editor of PC PRO, which gave Very-PC its award as Environmental Innovator of the Year in 2007 and a Highly Commended last year. “A lot of effort is now being made on energy efficiency by big vendors like Dell and HP. What Very-PC is doing is taking that concern and putting it into every area [of manufacture],” he said.
“You can call us eco-geeks if you like. When we set out we wanted to make something that would really make a difference to carbon emissions,” said Hopton. “Worldwide the amount of C02 pumped out by the IT industry is equivalent to that produced by aviation – it’s about 3% of total emissions.” So perhaps that brutal encounter with the Dragons was not such a bad thing after all. It has allowed Hopton and his team to maintain their idealism whereas taking an investment from the Den might have led to a takeover.
Show me the money: How to finance your eco start-up
Part 1: GETTING ADVICESo you have an eco-idea that can save the world from climate change and make a fortune at the same time? But how do you turn a fledgling “cleantech” business into a multi-million-pound global giant?
The first step, before even thinking about attracting investors, is to start networking, get the right advice and ready your business for the market.
Naturally, many of the steps you need to take are the same as for other small firms, green or otherwise.
The good news, though, is that there is a wealth of sources of advice as well as seed-funding that are specifically intended to help green businesses take root.
There are environment-focused “incubator” services where green entrepreneurs can hook up, swap experiences and share resources, either online or not.
Peterborough is rapidly becoming the UK centre for environmental industries and EnviroCluster (www. envirocluster.net)has low-cost office space at its Eco Innovation Centre( www. ecoinnovationcentre.co.uk). There are similar programmes in other regions, such as Envirolink Northwest www.envirolink northwest.co.uk). Your local Business Link (www.businesslink.gov.uk) will help to point you in the right direction.
“The first thing early-stage businesses need to do before they seek investment is develop their business plans, protect their intellectual property and generally assure potential investors that the concept has legs,” says Michael Sippitt of Environmental Investment Network (www. environmentalinvest.com), a joint venture between the Environmental Industries Commission and Clarkslegal, a specialist legal firm in the environmental sector. The Technology Strategy Board (www.innovateuk.org) has also set up several Knowledge Transfer Networks for various business sectors. The environmental one is at www.tinyurl.com/c3q9mc.
Patenting an invention is a tricky business. Although it can cost only a few thousand pounds initially, that can escalate to tens of thousands. Advice on best strategy is essential before diving into the market. The Carbon Trust (www.carbontrust. co.uk) Incubator Scheme offers up to £70,000 of advice to qualifying schemes and free access to legal and business services at Grant Thornton and Mills & Reeve. The advantage of getting advice from eco-sector specialists is that they have access to networks of like-minded businesses and investors and can give your concept credibility – a crucial factor for success.
That’s the easy bit: now you need to start raising the money.
- by Matthew Wall
Follow our three-week series Getting advice Part 1 this week on where to find help for your fledgling eco-business. Bag The Money Next week: part 2 tells you how to secure investment. Grant Aid Part 3 covers sources of public-sector funding.

High hopes of the eco visionaries

The Sunday Times
February 8, 2009
Former City workers are getting a new lease of life with ideas that help the planet
David Smith and Emma Smith

IS a new crop of eco-entrepreneurs emerging from the wreckage of the financial crisis? That may not be what Shriti Vadera, the business minister, meant when she claimed to see the green shoots of recovery last month, but in an increasingly bleak economic climate they may represent one of the few areas of new growth.
For many, going green is also a smart business move: Gordon Brown has spoken of 25m jobs worldwide by 2050 in the low-carbon energy sector and of the government’s aim to grab a significant slice of them for the UK. Before he was replaced as business secretary by Lord Mandelson, John Hutton forecast 1m “green” jobs over the next two decades. He has moved on to the Ministry of Defence, but the official target remains.
Kresse Wesling is something of a poster girl for the new movement. She started out working as an analyst for a Hong Kong-based venture-capital firm. Deciding that the outlook for financial services was bleak, she branched out and set up her own company, recycling unwanted materials into consumer products.
Today, aged 32, she has already started up three successful companies and collected a hatful of awards, including Entrepreneur of the Year at the Shell Women of the Future Awards 2007.
Since last April Wesling has given guidance to other budding eco-entrepreneurs at the British Library’s Business and Intellectual Property Centre on how to combine going green with making real money.
She says her time in Hong Kong primed her for the challenges in the cutthroat world of commerce. Her first business, started when she was 24, was Bio-Supplies, which sold environmental packaging. It was followed by Babaloo, which sells ethical products for parents and babies. Her latest venture – Bournemouth-based Eako – was started two years ago. Already profitable, it bucked the trend and experienced a bumper 2008 Christmas.
Eako’s products range from belts, bags and wallets to garden benches and chairs that are all made from recycled materials. For example, its Fire-Hose range of products are made from condemned fire hoses that are collected from fire brigades across the UK. As a thank you to the fire brigades for supplying the material, 50% of profits from the range are donated to The Fire Fighters Charity.
Eako’s latest innovation is the recycled coffee-bean bag that is now being sold in Sains-bury’s supermarkets. Wesling said thousands of tonnes of sacks are used to import coffee beans into the UK every year, and there’s value in the discarded jute that would otherwise find its way into landfill.
“I don’t see how nonsustainable business models will survive during the next 20 years,” she said. “Time is running out for exploiters and polluters.”
Wesling may be young and idealistic with lessons still to learn from the hard-knocks school of business, but there are veterans of the City who have turned over a new, green leaf. Andrew Hamilton worked for 20 years in the Square Mile, including a lengthy stint as corporate-finance director at SG Hambros.
While other City workers are facing shrinking bonuses and the threat of redundancy, he is now behind a ground-breaking method of burning household waste to create clean, renewable energy, as well as a company on the verge of huge expansion.
“I could see that with the political pressure to promote environmentally friendly solutions, this was going to be a very exciting growth area,” said Hamilton. “That was evident four or five years ago.”
Perhaps sensing the impending doom, Hamilton, 49, set up Advanced Plasma Power (APP) in 2005, and has spent the past three years investigating more efficient ways to make energy from rubbish that would otherwise end up in landfill.
The system his team has devised produces less than 1% waste (the ash is converted into a harmless building material), compared with about 25% for conventional incineration. He now hopes to set up the first of several APP power plants by 2011, which will provide enough renewable energy to power 12,000 homes for a year and “at a very competitive price”.
The thing that Wesling and Hamilton have in common is that they are pushing at an open door. Already, Britain has an environmental goods and services sector officially estimated to have annual revenues of £25 billion, and to be a net exporter. A third of all Europe’s venture-capital investment in clean technology since 2001 has been in the UK.
A study by Ernst & Young, Comparative Advantage and Green Business, suggested that there were green opportunities in most sectors of the economy.
Ernst & Young identified opportunities in computer software, electronics, pharmaceuticals and chemicals, as well as aircraft manufacture and electricity generation.
Ministers and officials are also trying to plan so there are “British jobs for British workers” in the expansion of nuclear power. Seven new stations, ata cost of at least £3 billion each, will be needed just to replace existing stations as they are decommissioned. Worldwide, 60 new stations are expected to be built over the next 10 years.
The government intends to learn from the experience of the 1970s, when North Sea oil first came on stream, by ensuring there is a UK skills base. There will be the equivalent of an Offshore Supplies Office which, according to the Department of Business, Enterprise and Regulatory Reform, “led to the birth of a globally competitive, offshore-supplies industry which is still a global leader and export earner for the UK”. A £100 billion investment programme in renewable energy over the next 12 years will be a significant generator of jobs.
Some experts believe the recession offers an opportunity to step up the pace of creating green jobs in Britain.
“With the sharp downturn in the housing market and the construction industry in crisis with widespread job losses, a golden opportunity has opened up for a substantial investment programme that largely decar-bonises existing UK homes by 2020 through the retro-fitting of energy-efficiency measures and technologies,” said Sudhir Junankar, associate director of Cambridge Econometrics, a con-sultancy specialising in energy, environmental and climate-change issues.
“Such a programme, if it is rolled out over the next decade, will create green jobs, cut carbon emissions from UK homes by 80% by 2020 and help to meet the UK’s ambitious target of a 80% reduction in all greenhouse gases by 2050,” he said.
For green pioneers, it’s a challenge waiting to be met.

Aircraft engine makers flying into a brighter future

The Sunday Times
February 8, 2009
Quieter planes with lower emissions are set for take-off
Dominic O’Connell

VISITORS to the Farnborough air show are used to loud noise, but this was different. A high-pitched buzz throbbed across the Hampshire airfield, prompting spectators to put down their Pimms and crane their necks at the aircraft soaring above them.
It looked like an ordinary commercial airliner – but there was something odd about its engines. One was conventional, while the other had two rows of curved propellers protruding hedgehog-like from the rear. This was the source of the unnerving howl.
The unducted fan, as the banshee powerplant was called, flew at Farnborough 21 years ago. It was a prototype from General Electric, the US aero-engines group, which claimed it would use much less fuel than standard designs. It never made it into production, and was pushed into the footnotes of aviation history by falling fuel prices and noise worries.
Until now, that is. Last year the National Aeronautics and Space Administration asked GE to resurrect and update the design. Trials start in Cleveland, Ohio, next month with the same test rig used 20 years ago. Nasa had kept it, just in case.
GE’s leap back to the future is indicative of the scramble for greater fuel economy and lower emissions that is gripping the industry. The big players – Rolls-Royce, GE, Pratt & Whitney and France’s Snecma – are spending hundreds of millions of pounds a year on research and development, driven by the long-term prospect of high oil prices and harsh scrutiny of aviation’s contribution to green-house-gas emissions.
It is a costly, high-stakes game. The group that places its technology bets wrongly risks being marginalised. The prize, on the other hand, is considerable, with industry leaders forecasting a new generation of planes that use 50% less fuel and are quieter than the best aircraft flying today.
All the big players are constantly tweaking their current products to squeeze out more efficiency. Mark King, president of commercial aero-space at Rolls-Royce, points out that the new version of its Trent engine is 15% more efficient than the 1995 original.
The next big leap, however, will come with the replacement of the workhorses of commercial aviation, the Airbus A320 and Boeing 737. New planes were expected around 2013, but are not now likely until around 2020, by which time some radical new engines should be ready to fly.
Undeterred by the delay, Pratt & Whitney, part of the American industrial conglomerate United Technologies Corporation (UTC) is pressing ahead with its “geared turbofan” (GTF). The new engine was shown in public for the first time last week in Toulouse, France, where it has been undertaking flight trials with Airbus. Pratt has spent over $1 billion (£684m) and two decades on the engine, which will go into service in 2013 on planes built not by Airbus or Boeing, but by Bombardier of Canada and Japan’s Mitsubishi.
The secret of the GTF is a gear-box that slows down the fan at the front of the engine. This lets the high-temperature gas turbine at its heart run faster and more efficiently than on a conventional turbofan. Pratt claims the GTF will cut fuel burn by up to 15%, with a corresponding reduction in carbon-dioxide emissions. It makes even greater claims on noise, claiming a 50% decrease, which translates into more than 70% in noise-affected areas around airports. Pratt said airlines using the engines could save over $1.5m a year per plane.
Bob Saia, the executive in charge of the programme, is not fazed by the postponement of the new Airbus and Boeing planes, saying: “It gives us time to work on a second generation of engines.”
GE and Rolls-Royce have turned their backs on the GTF, claiming they can get similar savings from improved standard turbofans. They are both working on new versions of the unducted fan that howled over Farnborough – now called the “open rotor” engine.
King said tests with a one-sixth scale model indicated the noise problem could be fixed and he expected open rotor to bring fuel savings of about 30%.
Rick Kennedy of GE said its new powerplant would be ready by 2020.
Pratt doesn’t dispute the greater fuel savings offered by the design, but says noise and other practicalities led it to pursue the geared fan instead.
King said Rolls-Royce was encouraging aircraft makers to take a broad approach to cut carbon and fuel use. “We are taking a fundamental look at the problem by talking to plane makers about what their next products will look like. We want to lead thinking in the sector.”

Energy questions

Published Date: 08 February 2009

THE big six UK power companies, Centrica, EDF Energy, E.ON, RWE npower, Scottish & Southern Energy and ScottishPower, are being called to give evidence to the select committee on energy and climate change on Wednesday.
The firms will be quizzed on energy prices and future investment in the light of criticism they have been slow to pass price cuts on to retail customers following a drop in wholesale costs. Last week SSE announced it was cutting prices, but the move has been described by David Hunter of energy consultancy McKinnon & Clarke as "insignificant". He said the 4% discount in gas and 9% discount in electricity being offered by SSE from the end of next month "in no way reflects the fall in the market".

United on climate change: Obama's Chinese revolution

US President wants the world's two biggest polluters to form a partnership in the battle against global warming. Geoffrey Lean reports
Sunday, 8 February 2009

Barack Obama is to invite China to join the United States in an effort by the world's two biggest polluters to stop global warming running out of control.
Hillary Clinton, his Secretary of State, is to raise the prospect of a "strong, constructive partnership" to combat climate change on a visit to Beijing next week, and the President is seriously considering a proposal from many of his most senior advisers to hold a summit with the Chinese leadership to launch the plan.
Last week, China's ambassador to the US, Zhou Wenzhong, made it clear that his government would welcome "co-operation on energy and climate change" with the US. Such unprecedented teamwork would transform the world's prospects for agreeing radical measures to combat global warming, and – senior Obama administration officials believe – lay the foundation of a new relationship between the two most powerful countries in the world.

For years, progress towards negotiating a new international climate change treaty has been bedevilled by the two superpowers, each refusing to commit itself to action unless the other goes first, and mutual suspicion has been growing. Between them, the US and China produce over 40 per cent of the world's emissions of carbon dioxide. About two years ago, China overtook the world's largest economy as the planet's biggest polluter. But Americans still emit more than four times as much of the gas per person as their Chinese counterparts.
Neither country has to reduce its emissions under the Kyoto Protocol. China, like other developing countries, is excused the reduction targets placed on industrialised nations. Former president George Bush rejected the treaty partly because of China's exemption.
The stand-off has dogged negotiations on a new, much tougher treaty as the US has been unwilling to agree to any targets until China commits itself to act on its emissions. China, for its part, has insisted the US act first as it has made a far greater contribution to the crisis, spewing out more than three times as much carbon dioxide over the past two centuries.
The arrival of President Obama – and increasing concern about climate change within the Chinese leadership – has provided an unprecedented opportunity to break the deadlock.
Both the President and Mrs Clinton have made it clear that combating climate change is among their highest priorities, and top Chinese officials are now indicating that their government is ready to work with them. Both countries have included "Green New Deal" measures, amounting to scores of billions of dollars, in their stimulus packages.
Mrs Clinton will visit Beijing for two days on 20 February, on her first overseas tour as Secretary of State, with the climate and financial crises at the top of her agenda.
Todd Stern, her special envoy for climate change, said last week; "Secretary Clinton is keenly aware that the United States, as the largest historic emitter of greenhouse gases, and China, as the largest emitter going forward, need to develop a strong, constructive partnership to build the kind of clean energy economies that will allow us to put the brakes on global climate change. We need to put finger-pointing aside and focus on how our two leading nations can work together productively to solve the problem."
The Chinese ambassador to the US sounded much the same note and appealed to American commercial self-interest in helping his country tackle global warming. "Co-operation between our two countries on energy and environmental issues will enable China to respond to energy and climate change issues more effectively, while at the same time offering enormous business opportunities and considerable return to American investors," he said.
He was speaking at the Brookings Institution launch of one of two important reports on the prospects of a US-China partnership on climate and clean energy – published on Thursday by experts with enormous influence in the new White House – which both called on Mr Obama to hold a summit with the Chinese leadership on the issue.
The Brookings report is written by two of its fellows, David Sandalow and Professor Kenneth Lieberthal, who both worked in the Clinton White House and have been tipped for senior posts in the new administration.
The second report, published by the Asia Society and the Pew Foundation, has an even more impressive pedigree. It was produced by a committee chaired by Steven Chu, the new US Energy Secretary, and John Thornton, tipped as the new ambassador to China, and carries a forward by Richard Holbrooke, appointed as the President's special envoy to Afghanistan and Pakistan. It has contributions from Mr Stern and Professor John Holdren, President Obama's science adviser.

Chance for a green alliance that could still save the world

By Geoffrey Lean, Environment Editor
Sunday, 8 February 2009

Maybe we are on the brink of one of those rare moments that transform the world for the better. For the Obama administration's moves to forge a climate partnership with China offer much the best chance yet of averting the most serious crisis civilisation has faced.

Hillary Clinton's visit to Beijing next week could prove far more important than President Nixon's "China initiative", which opened up the giant country to the world almost 40 years ago.
There is absolutely no hope of even beginning to get to grips with global warming without the United States and China, which between them account for nearly half of the world's emissions of carbon dioxide. Yet – even as science shows that time to avoid catastrophic climate change is running out – international negotiations on a new treaty have been paralysed by a deadly game of "after you, Claude", where both countries have refused to budge unless the other acts first.
If the partnership comes off, the relationship could be transformed, so that – as David Sandalow, a member of the Obama transition team who has just co-authored a new report, puts it – "instead of each country pointing to the other as a reason to do less, they spur each other on to do more". At the least, it would revolutionise the hitherto fragile prospects of international agreement at a vital meeting in Copenhagen in December, billed as the last chance to avoid disaster.
There are reasons to hope. Both countries are increasingly worried about the effects of global warming, whether droughts in California and northern China, or floods in southern China or New Orleans. More important, both have been doing a surprising amount while officially remaining obdurate.
Despite former President Bush's oil-soaked obstinacy, more than half of US states have acted to cut emissions, and more than 800 towns and cities have promised to meet or beat Kyoto Protocol targets. In a neat mirror image, the Chinese government has been admirably active – sparking a renewable energy boom and promising to cut the amount of carbon dioxide emitted for each unit of GDP by a fifth by 2010 – while finding it hard to get local governments to co-operate. With President Obama promising big emissions cuts, a deal seems possible.
Huge obstacles remain. Each country fears the other will use climate measures to obtain competitive advantage. And each is struggling with financial turmoil. So the best approach will be to emphasise the economic advantages in adopting a green new deal as the way to stimulate future growth.
Clean energy is central to this, and is rapidly expanding in both countries. So the place to start may be to focus on the opportunities to increase prosperity and reduce pollution through jointly developing things such as electric cars, boosting energy efficiency and renewable energy, and finding ways to clean up coal.

Polar ice caps melting faster

The Sunday Times
February 8, 2009
Jonathan Leake, Environment Editor

THE ice caps are melting so fast that the world’s oceans are rising more than twice as fast as they were in the 1970s, scientists have found.
They have used satellites to track how the oceans are responding as billions of gallons of water reach them from melting ice sheets and glaciers.
The effect is compounded by thermal expansion, in which water expands as it warms, according to the study by Anny Cazenave of the National Centre for Space Studies in France.
These findings come at the same time as a warning from an American academic whose research suggests Labour’s policies to cut carbon emissions 80% by 2050 are doomed.

Cazenave’s data show that in the past 15 years sea levels have been rising at 3.4mm a year, much faster than the average 1.7mm recorded by tidal gauges over the past 50 years.
Cazenave said: “This rate, observed since the early 1990s, could reflect an acceleration linked to global warming.”
Met Office figures suggest sea levels in the Thames could rise 8in-35in by 2100 and possibly by as much as 6ft 6in.
Cazenave’s work, just published, will be presented at this week’s American Association for the Advancement of Science conference in Chicago.
Its release will coincide with a lecture in Britain by Professor Roger Pielke, of the University of Colorado, in which he implies that the UK’s emission target is unachievable for population and economic reasons.