Monday, 2 March 2009

Hyundai to invest in greener cars

Published: March 1, 2009

SEOUL: Hyundai Motor Group said Sunday that it planned to invest nearly $6 billion this year, similar to 2008, and would focus on developing environmentally friendly automobiles as it eyes longer-term growth beyond the current crisis.
The global auto industry is reeling under an unprecedented demand slump that has resulted in production cuts, layoffs and government bailouts. General Motors posted a loss of nearly $31 billion for 2008 on Thursday.
Hyundai Motor Group, which comprises Hyundai Motor and Kia Motors, said it would invest about 9 trillion won, or $5.9 billion, this year, similar to its spending last year.
Of the planned investment in 2009, 6 trillion won would be spent on facilities, with the remaining 3 trillion won earmarked for research and development, Hyundai said.
Hyundai is considered better positioned than its Japanese and U.S. rivals to weather the global recession thanks to the weaker won, which makes Hyundai's cars less expensive in overseas markets, and a lineup of lower-priced cars.

Hyundai's total global vehicle sales fell 27 percent in January year-on-year, but its U.S. sales rose nearly 10 percent.
The group, which has taken steps to cut costs and trim executives' salaries, said its research efforts would focus on greener vehicles as demand for cars that are less polluting and more fuel efficient was expected to surge once the global economy improved.
Hyundai said it would spend 2.4 trillion won over the coming years on environmentally friendly cars. It aims to release a gasoline-electric hybrid car model in July in South Korea, its home base. The group also plans to develop a commercial fuel-cell car model by 2012.

Plug pulled on 'green' electricity for the Queen

The Times
March 2, 2009

The energy company npower has pulled out of a £1 million plan for a hydroelectric plant on the Thames to supply electricity for Windsor Castle, which would have boosted the Queen's green credentials.
The company has decided that the 300kW project is too expensive. Planning permission was granted last year with construction due to start next year. The plant on Romney Island, a few hundred yards from the castle, would have had four turbines. The project was being developed with the Environment Agency, which will now seek another partner.
A statement by npower said: “There are still significant challenges in making this project a viable asset within npower renewables' rapidly expanding portfolio. Following a significant amount of detailed consideration, npower renewables has taken the decision that it will no longer continue developing this hydro scheme.” Simon Holt, head of implementation, said that the company remained committed to hydroelectric power.

UN body provokes outrage with call for more fish farming

The Times
March 2, 2009
Frank Pope, Oceans Correspondent

Environmentalists reacted with fury last night after a UN body recommended a big increase in fish farming to meet rising global demand.
The UN Food and Agriculture Organisation (FAO) said that increasing global demand for fish should be met through intensive fish farming amid falling wild populations.
“If overall production is to keep pace with an expanding world population, and given the strong likelihood that capture fisheries will remain stagnant, future growth will have to come from aquaculture,” itsaid in a report.
World aquaculture has grown dramatically in the past 50 years. In the early 1950s less than a million tonnes was produced. By 2006 this had risen to 51.7million tonnes, with a value of $78.8billion (£55billion) — approaching half the total global fish consumption of 110.4 million tonnes.

Per capita, fish consumption has been increasing steadily from an average of 9.9kg in the 1960s: it reached 11.5kg in the 1970s, 12.5kg in the 1980s, 14.4kg in the 1990s, and 16.4kg in 2005.
China accounts for much of the rise, consuming 33.6 million tonnes in 2005, or 26.1kg per person. China has also had a boom in aquaculture: almost six out of ten farmed fish globally were reared in China, while just under nine out of ten come from the Asia-Pacific region.
Differences in feeding habits, though, could present a stumbling block to bringing Asian-style aquaculture to the West. Cod and salmon — two of the most popular fish in Britain — are both predators, unlike the herbivorous carp that is favoured in the East. Rather than feeding on aquatic plants, cod and salmon must be fed on other fish that are sourced from the wild. Between 1992 and 2006 the amount of fishmeal used to feed farmed fish grew by almost 300 per cent.
The FAO recommendations provoked a backlash from pressure groups. Willie Mackenzie, of Greenpeace, said: “We've totally trashed our wild fish populations so now we need to farm them. It just doesn't make sense to catch fish to feed to fish — you lose four to five times the weight and that's without all the problems of infestations, escapes and pollution from the farms.”
Around 520million people — 8 per cent of the world's population — depend on fisheries for their protein, income or family stability.
How lice spread into wild salmon Case study: The Broughton Archipelago
Farming salmon in the rivers of the Broughton Archipelago off the West Coast of Canada was turning into an ecological nightmare, the journal Science reported in 2007.
Many problems can arise from fish farming: algal blooms and deoxygenated water from the waste. But what did for Broughton's salmon was the lice. Adult fish can handle a few but juveniles are not so strong. The fish farms are near the spawning rivers, and the larval stage of the lice can travel up to 50 miles to infect the juveniles. Wild salmon mortality within range of the farms hit 80 per cent. If the outbreaks continued, scientists warned, the wild salmon populations would be extinct within eight years. Last year a study showed a 90 per cent drop in spawning in the Broughton River compared with 2006.

Obama's backing raises hopes for climate pact

By Elisabeth Rosenthal
Published: March 1, 2009

Until recently, the idea that the world's most powerful nations might come together to tackle global warming seemed an environmentalist's pipe dream.
The Kyoto Protocol, signed in 1997, was widely viewed as badly flawed. Many countries that signed the accord lagged far behind their targets in curbing carbon dioxide emissions. The United States refused even to ratify it. And the treaty gave a pass to major emitters in the developing world like China and India.
But within weeks of taking office, President Barack Obama has radically shifted the global equation, placing the United States at the forefront of the international climate effort and raising hopes that an effective international accord might be possible. Obama's chief climate negotiator, Todd Stern, said last week that the United States would be involved in the negotiation of a new treaty — to be signed in Copenhagen in December — "in a robust way."
That treaty, officials and climate experts involved in the negotiations say, will significantly differ from the agreement of a decade ago, reaching beyond reducing greenhouse gas emissions and including financial mechanisms and making good on longstanding promises to provide money and technical assistance to help developing countries cope with climate change.
The perception that the United States is now serious has set off a flurry of diplomacy around the globe. "The lesson of Kyoto is that if the U.S. isn't taking it seriously there is no reason for anyone else to," said Bill McKibben, who runs the environmental organization

This week the United Nation's top climate official, Yvo de Boer, will make the rounds in Washington to discuss climate issues. The United Nations secretary general, Ban Ki-moon, is organizing a high-level meeting on climate and energy. Teams from Britain and Denmark have visited the White House to discuss climate issues. In China, Secretary of State Hillary Rodham Clinton made climate a central focus of her visit and proposed a partnership between the United States and China. And a special envoy from China is coming soon.
But a global treaty still faces serious challenges in Washington and abroad, and the negotiations will be a test of how far the United States and other nations are prepared to go to address climate change at a moment when economies around the world are unspooling. The global recession itself is expected to result in a reduction of greenhouse gas emissions, as manufacturing and other polluting industries shrink, lessening the pressure on countries to take action.
"The No. 1 thing will be for everyone to see that the U.S. is on an urgent and transformational path to a low carbon economy — that would have a galvanizing effect," said John Ashton, the British foreign secretary's special representative for climate change.
The Obama administration has said that it will push through U.S. government legislation this year to curb carbon dioxide emissions in the United States — a promise that Obama reiterated Tuesday in his speech to Congress.
The Kyoto Protocol has been a touchstone of the environmental movement. Thirty-seven developed countries, including Japan, Australia and nations in the European Union, ratified the accord, agreeing to reduce or limit the growth of carbon dioxide emissions by specified amounts. President George W. Bush, pressed by the Senate, rejected the accord, because countries like China were not also subject to mandatory emission levels. China and India also refused to ratify the protocol.
At the tail end of his administration, Bush made tentative overtures toward China and other countries on climate matters. In 2007, he convened a meeting of countries that were major emitters of greenhouse gases. Later, in bilateral economic talks, China and the United States agreed that they would cooperate on clean technology development and some other climate issues.
But Kyoto was shaped largely by climate scientists and environment ministers, not the higher-level officials now laying the groundwork. And even many who participated in the earlier accord now say they see it as weak and naïve about political and economic realities. Of the countries that signed, more than half are not on track to meet their targets according to 2008 United Nations data, including Germany, Ireland and Canada.
"In Kyoto we made a lot of promises to each other, but we hadn't done the domestic politics," Ashton said, "and that is why Kyoto — though a valuable step forward — has ultimately been so fragile."
The talks on the new treaty, said Rajendra Pachauri, chairman of the United Nation's Intergovernmental Panel on Climate Change, "provides an opportunity to fill this gap that we've seen, and this time perform up to expectations."

The 1997 protocol was a narrow accord about the emissions of carbon dioxide and other heat-trapping gasses linked to global warming. The new agreement will need to address how those reductions can be achieved in a way that takes account of their effects on energy supplies and economies — especially at a time of global recession.
Negotiating the treaty when countries are under extreme economic stress presents challenges, de Boer acknowledged. Politicians in Italy and Canada have complained that it will be difficult to clean up industries to meet their Kyoto goals because of the economic downturn. But others say a global industrial recession, in which emissions tend to drop anyway and countries are poised to spend billions to stimulate economies, is the time to craft a global effort to combat global warming.
With developing countries like China and India emerging as major carbon dioxide emitters in the past few years, experts said that if the new treaty was to be effective, every nation would have to accept emissions limits. "If one part of the world acts and the other does not, that doesn't really generate a climate benefit," said de Boer, who is responsible for organizing the December meetings.
Developed countries would most likely get binding numerical targets, as some did in Kyoto. Developing countries, which were exempt under Kyoto, would probably be given less stringent goals, though it is not clear if these will be longer-term numerical targets or some other mechanism that ties allowable emissions to economic growth.
Obama has said the United States will lead the effort, but over the next months, he will have to show what exactly that means. A good first step, environmentalists say, would be to commit to trying to limit warming to two degrees centigrade above pre-industrial temperatures, an ambitious goal that the European Union has adopted but that the Bush administration steadfastly avoided. It could also pledge to reduce emissions by 50 or 80 percent by 2050.
The Intergovernmental Panel on Climate Change has said that humans could largely adapt to two degrees of warming, but that a greater temperature increase could cause far more serious consequences, from a dangerous rise in sea levels to mass extinctions.
Climate experts added that the United States did not need to have in place national legislation to limit greenhouse gasses, a process that could take months, to negotiate in Copenhagen. "It's not just about analyzing a piece of legislation," Ashton said. "It's about the feeling you get if you're a leader sitting in Beijing. It's like love; you know it when you feel it."
A more complex issue is whether negotiators will retain the system of trading carbon credits that is central to the Kyoto Protocol, a kind of global commodities market for carbon.
That system allows developed countries that produce more than their allotted share of emissions to balance their emissions budget by investing in projects that curtail emissions elsewhere. Such projects might include the cleaning up of a coal power plant in China, planting trees in Africa or converting pig manure to electricity in the Netherlands. The same cap and trade concept is now used in Europe's emissions.
But as the European Union and the countries that signed the Kyoto Protocol have tried such projects over the past few years, problems have emerged. Most notably, it is hard to determine the emissions-reducing value of carbon credit projects, making it easy to game the system. The new treaty, experts say, will also have to broaden Kyoto's focus beyond industrial emissions to activities like airline travel, one of the fastest-growing sources of carbon emissions. In the end, it will also have to include financial mechanisms and technical assistance to help developing countries cope with climate change.
"This is not just about emissions but about creating a massive investment in a new global energy economy" that includes forests, oceans and the transfer of technology, said Angela Anderson, director of the Pew Environment Group's Global Warming Campaign.
American negotiators were limited in Kyoto by a Senate resolution saying that the United States would not accept numerical caps unless China did as well. But Senator John Kerry, Democrat of Massachusetts, said, "There has been a sea change in the Senate," and he added that he believed that there were enough votes — Democratic and Republican — to ratify a strong treaty.
What is unclear is whether politicians will be willing to commit to large enough changes to have a significant effect on global warming. "The Bush administration set the bar very low," McKibben said.
Andrew Revkin contributed reporting.

Small firms are looking to cash in big on green energy

Published Date: 02 March 2009


SMALL specialist companies are taking equity stakes in early-stage renewable energy projects, gambling that they will enjoy a windfall long before earth is turned.
The trend has been prompted by the high value placed on stakes in renewables projects, before construction has even begun.Last month, two small Scottish companies announced that they would take major equity stakes in projects in partnership with major utilities. Most recently, Aquamarine – which has developed devices to farm both wave and tidal power – said it will develop sites capable of producing a gigawatt of electricity with Scottish & Southern Energy (SEE) by 2020 as a joint venture.But Martin McAdam, chief executive of Aquamarine, 47 per cent of which is owned by SSE, said there was no chance the company would own the stake all the way through to the capital-intensive construction phase.Instead, Aquamarine will focus only on providing its devices; McAdam believes if it were to retain stakes in completed projects it would potentially put the Edinburgh-based in competition with potential customers.Instead, the exercise is an attempt to "create a market" for its technologies, selling the stake in the sites when they are consented, but retaining a contract to provide its devices in the plan.But the equity stake itself is a key element of Aquamarine's business plan. McAdam said a sale of the stake could provide significant amounts of revenue, with the cost of taking projects to consent estimated to be in the low millions.He said: "It's a very valuable part of our business model. If you look at offshore wind where equity partners have sold, the value placed on consented offshore wind is very substantial, anywhere up to £400,000 a consented megawatt. We see this as being, potentially, a very good source of revenue."A string of deals back McAdam's faith. In November, SSE sold a 50 per cent stake in the Greater Gabbard wind farm for £308 million, despite it being several years from completion.Aquamarine is not the only renewable technology minnow planning to use the development phase of projects as a key part of the business model.Earlier in February, SeaEnergy – a company based around the team that built the 5MW Beatrice demonstrator turbine for Talisman energy in the North Sea – won a 25 per cent stake in two projects with SSE and German firm RWE for major deep-water projects in the outer Tay estuary and the Moray Firth.Taking its stake in the projects to completion would require investment running into the hundreds of millions, and SeaEnergy chief executive Joel Staadecker admits the business he runs is being given "no value whatsoever" by the market. But Staadecker said the resources needed to take an offshore wind farm to development phase are "small beer" compared with the construction phase, but the returns on investment are high."The development phase of this business is very, very lucrative," the former oil and gas executive said. "The amount of money you spend, verses the value of the assets, is incredible, and there a lot of investors who understand that." Unlike Aquamarine, Sea-Energy, which is 80 per cent owned by Ramco – the Aberdeen firm previously focused on oil and gas – expects to take its wind farm project through to completion, believing that by the time it has consent for the project it will have an "enormously valuable asset".

Government opens bidding for nuclear sites

Tim Webb, Sunday 1 March 2009 15.27 GMT

The government will this week kick off an ebay-style auction of sites on which some of Europe's largest energy companies will build up to six new nuclear reactors.
The Nuclear Decommissioning Authority will invite eligible companies including Scottish and Southern Energy, French groups EDF and Suez, the German groups RWE and E.ON, Iberdrola of Spain and Swedish energy group Vattenfall to start bidding for the three parcels of land.
The companies will bid electronically as many times as they want and can track in real time the highest offer for each site, but not the identity of the bidder. The auction will close at the end of the month.
The model is similar to the government's two-month auction of third generation mobile phone licences in 2000, which raised £22.5bn, far more than expected.
The NDA's sale is likely to raise only a fraction of that amount. The NDA and bidders declined to indicate how much they thought the sites may fetch, but the sums are likely to run into the hundreds of millions, rather than billions.
The three parcels of land are all adjacent to soon to be closed or decommissioned nuclear reactors owned by the NDA at Wylfa in Anglesey, Bradwell in Essex and Oldbury near Bristol. The three sites all have access to existing grid connections but these would need to be upgraded for any larger new reactors built there. The sites also do not have planning permission for new reactors though they would have a good chance of getting the go-ahead because existing reactors are already nearby.
EDF is also selling the land it bought near the Wylfa site. The French group bought the land before it took over nuclear generator British Energy, whose sites it will use to build four new reactors. As part of the conditions of the deal, EDF must put the land up for sale to allow rivals to be involved in nuclear new build.
EDF has a big headstart over its rivals competing to be involved in Britain's new nuclear build programme as British Energy owns the most suitable sites. Clauses in the takeover also allow EDF to delay selling some of its land until the French company has secured planning permission to build new reactors on its preferred sites.
Last week, Sam Laidlaw, chief executive of Centrica, insisted that it was still possible for EDF to meet its aim of building Britain's first new nuclear reactor to be operational by December 2017, provided there were no planning or licensing delays. Centrica is continuing negotiations with EDF about buying a 25% stake in British Energy.

Offer to offset carbon tax credited in deals

The Associated Press
Published: March 2, 2009

CLEVELAND, Tennessee: An unusual commitment by the state of Tennessee to cover the cost of any future carbon tax for green companies that make major investments is being credited for luring two big solar energy developments worth more than $2 billion.
The tax break, which Democratic Gov. Phil Bredesen's administration passed in the Legislature last year with little fanfare, promises that the state will offset increased costs from any future tax on carbon emissions for a select group of companies that make significant investments in the state.
The credit would apply to any green energy supply chain company spending at least $250 million in the state. That includes the $1 billion Wacker Chemie AG plant announced in Bradley County last week, and the $1.2 billion Hemlock Semiconductor Corp. plant to be built in Montgomery County.
Both plants will make polysilicon, a material used to make solar cells.
Rudolph Staudigl, president and CEO of Munich, Germany-based Wacker, said the credit showed that officials are serious about developing the green energy sector in Tennessee.

"It's just another demonstration of the fact that the state of Tennessee is really trying to attract the right businesses," Staudigl said.
Hemlock, based in Michigan, is a joint venture between the U.S. Dow Corning Corp., the majority owner, and two Japanese firms, Shin-Etsu Handotai Co. Ltd. and Mitsubishi Materials Corp.l
Not all new investments in the state will benefit, though. Traditional industrial investments, like the $1 billion Volkswagen AG plant under construction in Chattanooga, do not qualify.
State Revenue Commissioner Reagan Farr said the credit was enacted to help eliminate uncertainty among investors.
"They were worried that Congress or the state would enact a carbon tax that would have to be borne by the company," he said. "So what we did was create a green energy tax credit, which actually says the state will take that out of the equation."
President Barack Obama's budget presented to Congress this week moves to address climate change and shift the U.S. from reliance on foreign oil to green energy. The proposal would begin auctioning off carbon pollution permits in 2012, but Congress has yet to write a bill that would regulate heat-trapping gases and define how the money would be collected.
The Tennessee Valley Authority produces about 60 percent of its power from coal, so investors in the state worry that increased costs from a cap-and-trade system could be passed on to them.
Monique Hanis, spokeswoman for the Solar Energy Industries Association in Washington, said Tennessee is taking a unique approach to the carbon tax question.
"It's definitely a new twist, and an interesting hedge for states that are trying to attract manufacturing," she said.
Making polysilicon is an energy-intensive process, but solar panels soon offset the carbon emitted to create them, said Steve Smith, director of the Knoxville-based Southern Alliance for Clean Energy.
"This is a very innovative and thoughtful way to lure and set a green foundation for the state of Tennessee" he said of the tax credit. "We certainly applaud that and think it's appropriate."
Farr said he and Economic and Community Development Commissioner Matt Kisber came up with the tax credit after being charged by the state's governor with developing a strategy to spur alternative energy projects in the state.
"He did not want us to pursue the strategy that a lot of other states have been pursuing, like sales tax holidays for fluorescent light bulbs to encourage consumption," Farr said. "He looked at it as an economic development opportunity, and he told us to look for anchors in the clean energy field."

Low-carbon vehicles a stop-start business against background of recession

By Jonathan Guthrie
Published: March 2 2009 02:00

Weaning UK motorists off high-carbon vehicles and onto low-carbon alternatives is an aspiration of the UK government and of vehicle manufacturers. But the recession threatens to disrupt that shift, with the problem nowhere better illustrated than in the West Midlands, heartland of the British automotive industry.
LDV, the troubled van maker, and Jaguar Land Rover, the much larger luxury vehicles company, have been pursuing a future as green vehicle manufacturers. But they have been badly hit by falling sales, putting the future of their low-carbon programmes and their very survival in doubt.
Difficulties are most acute at LDV, a Birmingham business that has struggled to make profits for years and now faces closure. It announced plans to make its products environmentally friendly last spring. This has not stopped critics from accusing LDV and its Russian owner GAZ of applying a liberal coating of greenwash to its appeal for a £20m-£30m government bridging loan needed to keep the company in business while it seeks longer term assistance from the European Investment Bank.
LDV, which managers are seeking to buy out from GAZ, is participating in a £100m government programme to develop greener vehicles. The manufacturer is one of a group of manufacturers competing to develop new electric vans. The Department for Transport will shortly announce £20m in grants for this purpose, with a further £30m allocated over the next three years. The far more important prize will be substantial orders from the public sector for the best vehicles. Electric vans are seen as having an important role to play in reducing kerbside emissions in towns and cities, where diesel-powered delivery vehicles are ripe for replacement.
LDV has adapted eight of its Maxus vans, half of which are currently on trial with a large supermarket chain. London councils are also interested in testing the 3½-tonne vehicles. "We have what the market is screaming out for," says one LDV official.
But supposing that LDV can even survive, it is likely to find that profits can be as tough to generate from electric vans as from the conventional diesel-driven kind. Growth has been frustratingly slow for Modec, the pioneering green vans manufacturer based in Coventry. Jamie Borwick, former chairman of black cab manufacturer Manganese Bronze, set up the business in 2006 with the aim of making 2,000 vans a year. Modec sold just 100 vans in 2008, a figure it hopes to quadruple in 2009.
"The electric vans business is a lot tougher than people think," says Mr Borwick, who has invested £30m in the venture. He had expected the UK to be Modec's main market. Instead he exports most of his production to countries that give generous subsidies to green vehicles. Most UK customers have ordered a few vehicles for trial purposes, and that is all. Mr Borwick hopes that two small orders from distribution groups UPS and Fedex will pave the way to greater things.
Julia King, vice-chancellor of Aston University and an expert on green vehicles, believes that uptake of electric vans has been impeded by the suspicions of fleet drivers. "There is a hearts and minds campaign to win," she says, "Often the first drivers to arrive at a depot in the morning choose the diesel vans in preference to the electric ones."
The financial commitment made by Jaguar Land Rover to green research and development - £800m over five years - dwarfs the £100m that the government promised to the whole automotive industry last summer. Its problem has been a slump in sales that has threatened viability. This has triggered a request for state aid reckoned by pundits to exceed £500m.
In January, Lord Mandelson promised £2.5bn in emergency support to vehicle makers undertaking green research, over half of it from the European Investment Bank. While JLR would be eligible for grants from this pot, the manufacturer would still need targeted support to stay in business. But the government is wary of assisting a struggling manufacturer, particularly one with a big foreign parent, in the form of Tata of India.
JLR says that it was pursuing green research before Greenpeace protesters chained themselves to its production line in Solihull in 2005. However, the incident appeared to jolt the manufacturer into stepping up its programme. JLR wants to make its vehicles more attractive to environment-conscious consumers, as well as compliant with increasingly stringent emissions legislation.
This year, manual versions of the Freelander, a small 4x4, will feature "stop-start" technology, which switches the engine off and on quickly to cut the emissions of stationary vehicles.
Prof King believes that JLR could usefully speed up its green programme. In her view, climate change means that "the customer base is going to have to shift its priorities at an accelerating rate". In time, JLR hopes to sell hybrid vehicles whose rear axles are fitted with electric motors.
Flywheels are another technology with which the West Midlands manufacturer is experimenting, although it is hard to classify a familiar feature of steam engines as an "innovation". With hindsight, the real wonder may be the length of time it has taken modern carmakers to revive such a simple energy-storage device.
Copyright The Financial Times Limited 2009