• Last-ditch effort to gain specific promises at G20 • Leaked communique all but ignores green issues
Patrick Wintour and David Adam
The Guardian, Tuesday 31 March 2009
A last-ditch effort is being made to insert clearer green commitments into the global economic recovery package. The move comes amid fears amongst some British government officials that the G20 summit is in danger of missing a unique opportunity to prevent the world from being locked into irreversible and catastrophic climate change.
Gordon Brown yesterday promised that a commitment to tackle the environment will be one of the five tests of the communique due to be released following the summit on Thursday, adding "there were long hours of hard negotiations ahead".
Number 10 counselled caution insisting that the main climate change event of the year will be at Copenhagen in December, when the UN hopes to reach a global deal to replace the Kyoto agreement.
The draft G20 communique leaked at the weekend makes only the smallest reference to climate change, and appears to be vague on the subject of how green the $2tn (£1.4tn) stimulus package agreed by world leaders should be.
This provoked the eminent climatologist James Hansen, director of Nasa's Goddard Institute for Space Studies, to tell the Guardian: "If this is the best they can do, then their 'planet in peril' rhetoric is probably just that - empty rhetoric."
Professor Robert Watson, chief scientific adviser for the Department for Environment, Food and Rural Affairs, also voiced concern about the limited commitment to a low-carbon economy: "I think it [low-carbon recovery] deserves a higher profile. Everybody seems to be focusing on short-term recovery and getting long-term regulation of the banks right. I haven't heard anything that suggests the green recovery and climate change are a major part of the [G20] agenda."
He added: "It would be a missed opportunity while they're talking about the economy not to talk about how to transform it to low carbon."
Steve Howard, CEO of The Climate Group, which works with major businesses and governments to promote a low-carbon economy, said: "What is lacking from the statement as a whole is timetables, targets and amounts. It lacks specifics on anything."
Some senior British officials privately believe the framing of the G20 stimulus package to ensure it has a large green element will be as decisive in the battle against climate change as the outcome of the UN talks on climate change in Copenhagen.
British ministerial sources insisted last night that there will be no mention in the communique of what proportion of the new jobs stimulated by the economic recovery package will be low-carbon roles. They suggested that any mention of green jobs might be seen as a form of covert protectionism by some members of the G20.
British officials said yesterday they regard it as essential that during the summit China gets a clear message from countries such as South Africa, Mexico, France, Germany, Britain and the US that they are all committed to tackling climate change and that China will not be put at a disadvantage if it shapes a low-carbon recovery.
Lord Stern, the government's former climate change adviser, yesterday tried to increase the pressure on the G20 by arguing that the worst recession since the 1930s gave the world the opportunity to lay the foundations for growth over several decades, based on low-carbon technology and energy efficiency.
He said the argument that the first priority was to deal with the current economic crisis and postpone action on climate change was "wrong and should be confronted".
He called for the G20 leaders to send out a signal that the "difficult" work of getting the specifics of a deal in place needed to be done. "This is an opportunity to have a green recovery that lays the foundations of growth for the next two to three decades."
A report by HSBC found that the US, Europe, China and South Korea lead global "green" spending plans after committing $300bn-$500bn to boost low-carbon technologies under wider plans to boost the global economy.
Green spend accounts for about 15% of the total economic spending of $2tn-$3tn.
Tuesday, 31 March 2009
Carbon Trust launches new guide to overcoming board resistance
Step-by-step guide aims to help green executives pitch projects to the board. From BusinessGreen.com, part of Guardian Environment Network
James Murray
guardian.co.uk, Monday 30 March 2009 12.17 BST
Anyone who has spent any length of time working as a sustainability exec knows that if a green project is going to die a death it is most likely to do so on the altar of board resistance.
Now the Carbon Trust is seeking to aid executives struggling to convince senior management to support green investments with the launch of a new guide detailing how facilities managers, works engineers, and environmental managers should go about making an effective business case for low carbon investments.
Developed in response to repeated requests for support from managers who have found it difficult to convince the board to authorise green investments, the guide draws upon advice from senior board-level executives and offers step-by-step advice on how to properly research a project proposal, build the business case, and draft and present the final proposal.
"For any business there is a finite pool of resource, and the first priority for any investment will be to drive the business forward," said Hugh Jones, Director of Solutions at the Carbon Trust. "It is therefore vital for managers to be able to make a compelling and robust business case for their low-carbon project which stacks up against other business priorities and which clearly articulates the ROI [return on investment]."
The guide also sets out the common mistakes made by environmental professionals when asking for investment, including using inaccessible jargon, failing to identify projects risks, failing to use proper ROI and financial assessment calculations, and not giving a single clear recommendation.
It has been launched alongside a new online guide that also provides advice on each planning stage for a new project, including defining a projects needs, developing the business case, selecting a supplier and specifying project requirements.
• From BusinessGreen.com, part of Guardian Environment Network
James Murray
guardian.co.uk, Monday 30 March 2009 12.17 BST
Anyone who has spent any length of time working as a sustainability exec knows that if a green project is going to die a death it is most likely to do so on the altar of board resistance.
Now the Carbon Trust is seeking to aid executives struggling to convince senior management to support green investments with the launch of a new guide detailing how facilities managers, works engineers, and environmental managers should go about making an effective business case for low carbon investments.
Developed in response to repeated requests for support from managers who have found it difficult to convince the board to authorise green investments, the guide draws upon advice from senior board-level executives and offers step-by-step advice on how to properly research a project proposal, build the business case, and draft and present the final proposal.
"For any business there is a finite pool of resource, and the first priority for any investment will be to drive the business forward," said Hugh Jones, Director of Solutions at the Carbon Trust. "It is therefore vital for managers to be able to make a compelling and robust business case for their low-carbon project which stacks up against other business priorities and which clearly articulates the ROI [return on investment]."
The guide also sets out the common mistakes made by environmental professionals when asking for investment, including using inaccessible jargon, failing to identify projects risks, failing to use proper ROI and financial assessment calculations, and not giving a single clear recommendation.
It has been launched alongside a new online guide that also provides advice on each planning stage for a new project, including defining a projects needs, developing the business case, selecting a supplier and specifying project requirements.
• From BusinessGreen.com, part of Guardian Environment Network
Carbon blanket will soon be spread to cover emissions from mainstream industry
The Times
March 31, 2009
Robin Pagnamenta
Energy companies are already familiar with measuring and trading their carbon emissions, but now regular businesses and other organisations are poised to follow suit.
Under the Government's Carbon Reduction Commitment (CRC) scheme, announced last May, from next year every organisation that consumes more than 6,000 megawatt hours of electricity in 2008 — or about £500,000-worth — will need to buy carbon allowances.
The mandatory cap and trade scheme will affect 5,000 large companies and local authorities in Britain and is aimed at slashing the country's total carbon emissions by an extra 1.2 million tonnes a year by 2020.
The proceeds will be paid back later to participants based on their organisation's performance during that year, as ranked in a league table based on carbon reduction and early action.
For many chief executives, keeping on top of changing rules and regulations like this is a constant game of catch-up.
But, for those that manage to stay one step ahead by preparing for rules before their introduction, it can be an excellent way to gain advantages over their rivals, Harry Morrison, of the Carbon Trust, argues.
Curbing emissions by reducing energy waste can also deliver something even better, especially in these straitened times: cost savings.
That's why a growing number of organisations are turning to the Carbon Trust Standard, a voluntary and independent certification scheme designed to help them monitor their emissions using a respected, common methodology — and to demonstrate the cuts they achieve.
“We feel strongly that leading businesses that take action now can get a double benefit, both in preparing for the legislation and also in terms of their public reputation,” he said.
“These groups really need to be thinking now about how they are going to comply with the CRC scheme and achieving the Carbon Trust Standard will be a very good start.”
Sixty-five groups have already signed up to the standard, including some of the best-known names in British business such as B&Q, Morrisons and O2 and a string of public sector organisations like Woking Borough Council, the Crown Prosecution Service, London Fire Brigade and King's College London.
Adrian Swindells, general manager of Abbey Corrugated, the packaging group, said: “We now understand that having gained the standard we will have a higher ranking in the CRC league table. This will definitely reduce costs to the business. We are now much better on business housekeeping with controlled start-ups and shutdowns that help to reduce energy use.
“And the standard has aligned closely with other certifications that the company has, ensuring we have robust systems and procedures to continually reduce our carbon footprint and energy consumption.”
Mark Willcox, development director at Branston, the foods group, said: “Branston has improved its carbon efficiency by 6 per cent in 2008. Gaining the Carbon Trust Standard also makes us eligible for a significant reduction under the CRC.”
Not only is the standard a good way for organisations to prepare for the introduction of the CRC and to bolster their reputation among consumers, it is also delivering real cash savings by identifying waste in their use of transport fuels, electricity, gas and oil.
“The 65 groups that have signed up have already achieved savings totalling £73 million,” said Mr Morrison, who describes the programme as an “holistic package that is designed to measure, manage and reduce their emissions”.
Organisations that sign up to the Carbon Trust Standard undergo a rigorous analysis of their energy use across all their buildings, plants and vehicles over a three-year period.
A comprehensive set of data on emissions is then produced which, assuming the right actions have been taken, can hopefully be shown to be heading down over time.
While membership of the standard does not in itself ensure compliance with the CRC scheme, it is one of the factors that counts towards performance in the league table, as part of an organisation's early action score.
It also perfectly positions companies for its introduction by ensuring they are measuring and reducing their emissions using the correct methodology and focusing management attention on the issue.
The financial impact of the CRC scheme is set to grow over time. An introductory phase is due to start in April 2010, under which all allowances will be sold at a fixed price. However, from April 2013, allowances will be allocated through auctions, with the number of credits available being reduced over time.
March 31, 2009
Robin Pagnamenta
Energy companies are already familiar with measuring and trading their carbon emissions, but now regular businesses and other organisations are poised to follow suit.
Under the Government's Carbon Reduction Commitment (CRC) scheme, announced last May, from next year every organisation that consumes more than 6,000 megawatt hours of electricity in 2008 — or about £500,000-worth — will need to buy carbon allowances.
The mandatory cap and trade scheme will affect 5,000 large companies and local authorities in Britain and is aimed at slashing the country's total carbon emissions by an extra 1.2 million tonnes a year by 2020.
The proceeds will be paid back later to participants based on their organisation's performance during that year, as ranked in a league table based on carbon reduction and early action.
For many chief executives, keeping on top of changing rules and regulations like this is a constant game of catch-up.
But, for those that manage to stay one step ahead by preparing for rules before their introduction, it can be an excellent way to gain advantages over their rivals, Harry Morrison, of the Carbon Trust, argues.
Curbing emissions by reducing energy waste can also deliver something even better, especially in these straitened times: cost savings.
That's why a growing number of organisations are turning to the Carbon Trust Standard, a voluntary and independent certification scheme designed to help them monitor their emissions using a respected, common methodology — and to demonstrate the cuts they achieve.
“We feel strongly that leading businesses that take action now can get a double benefit, both in preparing for the legislation and also in terms of their public reputation,” he said.
“These groups really need to be thinking now about how they are going to comply with the CRC scheme and achieving the Carbon Trust Standard will be a very good start.”
Sixty-five groups have already signed up to the standard, including some of the best-known names in British business such as B&Q, Morrisons and O2 and a string of public sector organisations like Woking Borough Council, the Crown Prosecution Service, London Fire Brigade and King's College London.
Adrian Swindells, general manager of Abbey Corrugated, the packaging group, said: “We now understand that having gained the standard we will have a higher ranking in the CRC league table. This will definitely reduce costs to the business. We are now much better on business housekeeping with controlled start-ups and shutdowns that help to reduce energy use.
“And the standard has aligned closely with other certifications that the company has, ensuring we have robust systems and procedures to continually reduce our carbon footprint and energy consumption.”
Mark Willcox, development director at Branston, the foods group, said: “Branston has improved its carbon efficiency by 6 per cent in 2008. Gaining the Carbon Trust Standard also makes us eligible for a significant reduction under the CRC.”
Not only is the standard a good way for organisations to prepare for the introduction of the CRC and to bolster their reputation among consumers, it is also delivering real cash savings by identifying waste in their use of transport fuels, electricity, gas and oil.
“The 65 groups that have signed up have already achieved savings totalling £73 million,” said Mr Morrison, who describes the programme as an “holistic package that is designed to measure, manage and reduce their emissions”.
Organisations that sign up to the Carbon Trust Standard undergo a rigorous analysis of their energy use across all their buildings, plants and vehicles over a three-year period.
A comprehensive set of data on emissions is then produced which, assuming the right actions have been taken, can hopefully be shown to be heading down over time.
While membership of the standard does not in itself ensure compliance with the CRC scheme, it is one of the factors that counts towards performance in the league table, as part of an organisation's early action score.
It also perfectly positions companies for its introduction by ensuring they are measuring and reducing their emissions using the correct methodology and focusing management attention on the issue.
The financial impact of the CRC scheme is set to grow over time. An introductory phase is due to start in April 2010, under which all allowances will be sold at a fixed price. However, from April 2013, allowances will be allocated through auctions, with the number of credits available being reduced over time.
180,000 tonnes of other people's waste dumped in Scotland
Published Date: 31 March 2009
By Jenny Haworth
Environment Correspondent
SCOTLAND disposed of more than 180,000 tonnes of rubbish from outside its borders in a single year, The Scotsman can reveal.
The waste sent to Scotland to be dealt with included contaminated soil, polluted dredging spoils, chemical waste, industrial sludge, scrap metal and asbestos. Almost 70,000 tonnes came from England and was either dumped in landfill, recycled or composted, according to new data from the Scottish Environment Protection Agency (Sepa).Some 35,364 tonnes was disposed of in Lothian and Borders, 12,466 tonnes was sent to Fife, 9,121 tonnes to Glasgow and the Clyde Valley, 3,610 tonnes to Tayside and 2,435 tonnes to the Forth Valley.Across Scotland, up to 94,000 tonnes of waste dumped in landfill came from outside this country, mainly from England and Northern Ireland. This was about 1 per cent of all the rubbish sent to landfill in Scotland.Friends of the Earth (FoE) Scotland said it was a "concern" and that rubbish should be dealt with as close to its site of origin as possible – known as the "proximity principle". Duncan McLaren, the chief executive of FoE Scotland, said: "It's a policy stance of ours and of the Scottish Government to use the proximity principle in terms of dealing with waste. Any amount that has been unnecessarily transported is of concern. "We have in the past commented pretty scathingly about mixed municipal waste coming from Northern Ireland. It shouldn't be transported across the Irish Sea."He said the severity of the problem would depend on how far the waste had been transported. "If it has literally come five miles over the Border, it may be obeying the proximity principle, but if it has come from London and gone to Fife, it is hard to see how it could be."The idea that something that comes from even the north of England needs to go as far as Fife raises questions as to whether the proximity principle is being adhered to."Sepa has published reviews that show the quantities of waste dealt with in each area of Scotland in 2006-7. It is the first time the data have been collected, so it is impossible to know whether the amount of waste from England dumped in Scotland has been increasing or decreasing.The reason rubbish is sent to Scotland could be because landfill companies charge cheaper prices, or because there are facilities to cater for specialist waste such as asbestos or electronics that do not exist near where it was produced.A spokeswoman for Sepa said on some occasions waste was transported so it could be dealt with in more suitable facilities."There are quite large electrical companies in Scotland that, instead of just dumping it, are recycling it and doing something with it," she said.She added some of the waste might not have travelled very far, despite coming from England.
By Jenny Haworth
Environment Correspondent
SCOTLAND disposed of more than 180,000 tonnes of rubbish from outside its borders in a single year, The Scotsman can reveal.
The waste sent to Scotland to be dealt with included contaminated soil, polluted dredging spoils, chemical waste, industrial sludge, scrap metal and asbestos. Almost 70,000 tonnes came from England and was either dumped in landfill, recycled or composted, according to new data from the Scottish Environment Protection Agency (Sepa).Some 35,364 tonnes was disposed of in Lothian and Borders, 12,466 tonnes was sent to Fife, 9,121 tonnes to Glasgow and the Clyde Valley, 3,610 tonnes to Tayside and 2,435 tonnes to the Forth Valley.Across Scotland, up to 94,000 tonnes of waste dumped in landfill came from outside this country, mainly from England and Northern Ireland. This was about 1 per cent of all the rubbish sent to landfill in Scotland.Friends of the Earth (FoE) Scotland said it was a "concern" and that rubbish should be dealt with as close to its site of origin as possible – known as the "proximity principle". Duncan McLaren, the chief executive of FoE Scotland, said: "It's a policy stance of ours and of the Scottish Government to use the proximity principle in terms of dealing with waste. Any amount that has been unnecessarily transported is of concern. "We have in the past commented pretty scathingly about mixed municipal waste coming from Northern Ireland. It shouldn't be transported across the Irish Sea."He said the severity of the problem would depend on how far the waste had been transported. "If it has literally come five miles over the Border, it may be obeying the proximity principle, but if it has come from London and gone to Fife, it is hard to see how it could be."The idea that something that comes from even the north of England needs to go as far as Fife raises questions as to whether the proximity principle is being adhered to."Sepa has published reviews that show the quantities of waste dealt with in each area of Scotland in 2006-7. It is the first time the data have been collected, so it is impossible to know whether the amount of waste from England dumped in Scotland has been increasing or decreasing.The reason rubbish is sent to Scotland could be because landfill companies charge cheaper prices, or because there are facilities to cater for specialist waste such as asbestos or electronics that do not exist near where it was produced.A spokeswoman for Sepa said on some occasions waste was transported so it could be dealt with in more suitable facilities."There are quite large electrical companies in Scotland that, instead of just dumping it, are recycling it and doing something with it," she said.She added some of the waste might not have travelled very far, despite coming from England.
'Super sized lions' roamed UK in ice age
'Super-sized lions' roamed the British Isles as recently as 13,000 years ago, according to an Oxford University study looking at the fossilised remains of the giant creatures.
By Louise Gray, Environment Correspondent Last Updated: 4:31PM BST 30 Mar 2009
Huge lions once roamed Britain alongside tigers and jaguars. By comparing their skulls, scientists revealed that British lions would have weighed up to 50 stone (317kg) ? the equivalent of a small car ? compared to African lions which weigh up to 39 ston
Previously, scientists had thought prehistoric big cats were more like jaguars or tigers.
However comparisons between the skulls of modern big cats and the fossilised remains of their ancestors revealed the animals found in the British Isles, Europe and North America as recently as 13,000 years ago were more like lions.
Dr Ross Barnett, who conducted the work at Oxford University's Department of Zoology, said the extinct species were "supersized lions" that hunted giant deer and woolly mammoth in a frozen landscape.
"These ancient lions were like a supersized version of today's lions, up to 25 per cent bigger than those we know today and, in the Americas, with longer legs adapted for endurance running.
"What our genetic evidence shows is that these ancient extinct lions and the lions of today were very closely related. Meanwhile, cave art suggests that they formed prides, although the males appear not to have had manes."
The researchers looked at remains of animals from the Pleistocene period (1.8 million years ago – 10,000 years ago). Fossils have been found in Germany, Siberia, Europe, Alaska and Wyoming in the USA.
Dr Barnett said the "Pleistocene lions" could be divided into two genetically distinct subgroups. One that inhabited northern Eurasia as well as Alaska and the Yukon and the other that lived in the southern half of North America.
He added: "This unusual distribution is explained by Ice Age geography when a land bridge linked Siberia and Alaska, enabling ancient lions to cross from Eurasia into North America. At some point the North American ice sheets would have interrupted this migration route – creating these two genetically distinct groups of animals."
The animals would have lived in a very different world from the African savannah, hunting for mammoth and giant deer in a landscape that represented the modern Russian Steppe. No one knows why they went extinct, but it has been suggested humans may have contributed to the decline.
By Louise Gray, Environment Correspondent Last Updated: 4:31PM BST 30 Mar 2009
Huge lions once roamed Britain alongside tigers and jaguars. By comparing their skulls, scientists revealed that British lions would have weighed up to 50 stone (317kg) ? the equivalent of a small car ? compared to African lions which weigh up to 39 ston
Previously, scientists had thought prehistoric big cats were more like jaguars or tigers.
However comparisons between the skulls of modern big cats and the fossilised remains of their ancestors revealed the animals found in the British Isles, Europe and North America as recently as 13,000 years ago were more like lions.
Dr Ross Barnett, who conducted the work at Oxford University's Department of Zoology, said the extinct species were "supersized lions" that hunted giant deer and woolly mammoth in a frozen landscape.
"These ancient lions were like a supersized version of today's lions, up to 25 per cent bigger than those we know today and, in the Americas, with longer legs adapted for endurance running.
"What our genetic evidence shows is that these ancient extinct lions and the lions of today were very closely related. Meanwhile, cave art suggests that they formed prides, although the males appear not to have had manes."
The researchers looked at remains of animals from the Pleistocene period (1.8 million years ago – 10,000 years ago). Fossils have been found in Germany, Siberia, Europe, Alaska and Wyoming in the USA.
Dr Barnett said the "Pleistocene lions" could be divided into two genetically distinct subgroups. One that inhabited northern Eurasia as well as Alaska and the Yukon and the other that lived in the southern half of North America.
He added: "This unusual distribution is explained by Ice Age geography when a land bridge linked Siberia and Alaska, enabling ancient lions to cross from Eurasia into North America. At some point the North American ice sheets would have interrupted this migration route – creating these two genetically distinct groups of animals."
The animals would have lived in a very different world from the African savannah, hunting for mammoth and giant deer in a landscape that represented the modern Russian Steppe. No one knows why they went extinct, but it has been suggested humans may have contributed to the decline.
Peter Mandelson puts UKAEA clean-up crew up for sale
The UK Atomic Energy Authority's decommissioning business will be the next piece of the nuclear industry to be privatised
Phillip Inman
guardian.co.uk, Monday 30 March 2009 20.46 BST
The break-up and privatisation of Britain's nuclear industry will complete its first phase by the summer after business secretary Peter Mandelson today agreed to sell the UK Atomic Energy Authority's decommissioning business unit.
The planned sale follows the privatisation of large swaths of formerly government-owned nuclear generation and decommissioning facilities, leaving the regulation of the industry, research and development and some consultancy businesses in public hands.
More than 200 staff at UKAEA who handle decommissioning, waste management and clean-up of Dounreay fast breeder reactors and ageing Magnox plants Harwell and Winfrith will be part of the sale.
In a written statement, Mandelson said the government would keep a minority stake in the business and hoped to complete a deal before the end of July.
The winning bidder is expected to be in prime position to pick up work undertaken by UKAEA and decommissioning work offered separately by the Nuclear Decommissioning Authority, though the government has pledged that rival bidders will enjoy a level playing field whichever firm succeeds in buying the unit.
Following the sale, the government is expected to offer contracts for decommissioning Dounreay, Harwell and Winfrith.
Mandelson said: "The sale is recognition of the work done by management in creating a commercially viable enterprise that has become an important repository of key nuclear skills that will help ensure that the UK will remain at the forefront of the nuclear services industry."
The Tories suggested the sale was motivated by a pressing need to boost the public finances. "The timing of this sale raises concerns," said the shadow energy secretary, Greg Clark. "This sale may be being made to help the government out of a short-term cash crisis at the expense of our long-term competitiveness.
"The government has awarded contracts worth millions of pounds to UKAEA Limited for decommissioning nuclear power stations and is reliant on the company to deliver them. The government must have cast-iron guarantees that any buyer will not hold the taxpayer to ransom for further payments for decommissioning Dounreay, Harwell and Winfrith."
UKAEA chairwoman Barbara Judge said more than 500 staff would remain at UKAEA to handle IT services for the industry, property development on nuclear sites and a fledgling consultancy business.
Bidders are expected to include several private equity firms and engineering firms such as Amec and Bechtel.
US energy firm Fluor has indicated it wants to enter the UK market after teaming up with Toshiba to develop a new generation of nuclear reactors in the US. Last year it lost out to Amec on a £1.3bn contract to clean up Sellafield. In January Mandelson welcomed Fluor's plans to expand its presence in the UK with a new headquarters in Farnborough, Surrey.
Phillip Inman
guardian.co.uk, Monday 30 March 2009 20.46 BST
The break-up and privatisation of Britain's nuclear industry will complete its first phase by the summer after business secretary Peter Mandelson today agreed to sell the UK Atomic Energy Authority's decommissioning business unit.
The planned sale follows the privatisation of large swaths of formerly government-owned nuclear generation and decommissioning facilities, leaving the regulation of the industry, research and development and some consultancy businesses in public hands.
More than 200 staff at UKAEA who handle decommissioning, waste management and clean-up of Dounreay fast breeder reactors and ageing Magnox plants Harwell and Winfrith will be part of the sale.
In a written statement, Mandelson said the government would keep a minority stake in the business and hoped to complete a deal before the end of July.
The winning bidder is expected to be in prime position to pick up work undertaken by UKAEA and decommissioning work offered separately by the Nuclear Decommissioning Authority, though the government has pledged that rival bidders will enjoy a level playing field whichever firm succeeds in buying the unit.
Following the sale, the government is expected to offer contracts for decommissioning Dounreay, Harwell and Winfrith.
Mandelson said: "The sale is recognition of the work done by management in creating a commercially viable enterprise that has become an important repository of key nuclear skills that will help ensure that the UK will remain at the forefront of the nuclear services industry."
The Tories suggested the sale was motivated by a pressing need to boost the public finances. "The timing of this sale raises concerns," said the shadow energy secretary, Greg Clark. "This sale may be being made to help the government out of a short-term cash crisis at the expense of our long-term competitiveness.
"The government has awarded contracts worth millions of pounds to UKAEA Limited for decommissioning nuclear power stations and is reliant on the company to deliver them. The government must have cast-iron guarantees that any buyer will not hold the taxpayer to ransom for further payments for decommissioning Dounreay, Harwell and Winfrith."
UKAEA chairwoman Barbara Judge said more than 500 staff would remain at UKAEA to handle IT services for the industry, property development on nuclear sites and a fledgling consultancy business.
Bidders are expected to include several private equity firms and engineering firms such as Amec and Bechtel.
US energy firm Fluor has indicated it wants to enter the UK market after teaming up with Toshiba to develop a new generation of nuclear reactors in the US. Last year it lost out to Amec on a £1.3bn contract to clean up Sellafield. In January Mandelson welcomed Fluor's plans to expand its presence in the UK with a new headquarters in Farnborough, Surrey.
Tories attack plans to sell off UKAEA's clean-up business
By Ed Crooks and Jean Eaglesham
Published: March 31 2009 03:00
A sell-off of the UK Atomic Energy Authority's commercial nuclear clean-up business was announced by the government yesterday, prompting Conservative accusations of a "fire sale".
The privatisation of some or all of UKAEA Limited is expected to raise about £50m for the government, and represents one of the final sales from Britain's state-owned nuclear industry.
Last night, the Tories questioned whether selling the business in the "fire sale environment" of the financial crisis would reap the maximum return for the taxpayer. "Britain needs to be building up its nuclear capabilities," said Greg Clark, the shadow energy secretary.
He expressed concern that the sale could be designed "to help the government out of a short-term cash crisis, at the expense of our long-term competitiveness".
The criticism foreshadows a wider political debate over the timing of asset sales that will come to the fore with next month's Budget.
However, the company and the government said yesterday that the reason for the sale was not the need to raise funds for the hard-pressed public finances, but the ambition to free UKAEA Ltd to compete for nuclear decommissioning work in Britain and internationally.
The revival of the nuclear industry in many countries - prompted by recent high fossil fuel prices and concerns about climate change - is creating a huge market for companies with the necessary skills.
As well as the clean-up of old nuclear sites, companies seeking to build new reactors will need to make provision for the eventual decommissioning of the facilities, creating opportunities for UKAEA Ltd in consultancy and project management.
Lady Judge, who chairs the atomic energy authority, said: "UKAEA Ltd is a decommissioning business par excellence, and it has an awful lot of work to do. But to get into the new-build business, we need a stronger financial backer."
She rejected the suggestion that the government was being pushed into a quick sale, saying the privatisation had been in preparation since 2004.
Some British companies have already expressed an interest in the business, and potential international buyers are also likely to come forward. Lady Judge said the buyer was "at least as likely to be a British company as a foreign one".
Possible buyers include the UK businesses Amec and VT Group, both of which have nuclear engineering operations. Areva of France and CH2M and URS of the US are also likely to be interested. The sale was backed last night by Prospect, the union representing nuclear engineers. The chosen buyer will not simply be the highest bidder, but the company that offers the best combination of cash and development plans for the business.
UKAEA Ltd, with a current annual turnover of £31m, is working on Britain's fourth-largest decommissioning project at Dounreay, northern Scotland.
Under European Union rules, the government cannot give financial guarantees to help it win contracts.
Simon Hughes, the Liberal Democrats' energy spokesman, called government nuclear policy "costly, risky and unnecessary". He added: "Liberal Democrats believe that we should decommission our old nuclear power stations and not recommission new ones."
Meanwhile, potential privatisations expected to be highlighted in the Budget include the Royal Mint and the Queen Elizabeth II conference centre in London. Other state-owned assets that could be earmarked for sale include British Waterways's canal-side properties.
But last year's failure to sell the Tote highlighted the relative dearth of private sector buyers in current market conditions.
Alistair Darling, the chancellor, has asked Gerry Grimstone, the chairman of Standard Life, to review the state's portfolio of 29 businesses to find ways to maximise return to the taxpayer.
The UK and atomic energy
Nuclear businesses sold off: Westinghouse, the nuclear engineer: sold to Toshiba for £2.9bn, 2006
BNFL services: sold to VT Group for up to £75m, 2007
British Energy, the nuclear generator: 36 per cent stake sold to EDF for £4.4bn, 2008
Atomic Weapons Establishment at Aldermaston: one-third stake sold to Jacobs Engineering of the US for an estimated £100m, 2008
Nuclear assets still held UKAEA Limited: up for sale, price about £50m
Nuclear Decommissioning Authority sites: auction under way
Urenco, uranium enrichment company: sale of government's one-third stake delayed indefinitely
Copyright The Financial Times Limited 2009
Published: March 31 2009 03:00
A sell-off of the UK Atomic Energy Authority's commercial nuclear clean-up business was announced by the government yesterday, prompting Conservative accusations of a "fire sale".
The privatisation of some or all of UKAEA Limited is expected to raise about £50m for the government, and represents one of the final sales from Britain's state-owned nuclear industry.
Last night, the Tories questioned whether selling the business in the "fire sale environment" of the financial crisis would reap the maximum return for the taxpayer. "Britain needs to be building up its nuclear capabilities," said Greg Clark, the shadow energy secretary.
He expressed concern that the sale could be designed "to help the government out of a short-term cash crisis, at the expense of our long-term competitiveness".
The criticism foreshadows a wider political debate over the timing of asset sales that will come to the fore with next month's Budget.
However, the company and the government said yesterday that the reason for the sale was not the need to raise funds for the hard-pressed public finances, but the ambition to free UKAEA Ltd to compete for nuclear decommissioning work in Britain and internationally.
The revival of the nuclear industry in many countries - prompted by recent high fossil fuel prices and concerns about climate change - is creating a huge market for companies with the necessary skills.
As well as the clean-up of old nuclear sites, companies seeking to build new reactors will need to make provision for the eventual decommissioning of the facilities, creating opportunities for UKAEA Ltd in consultancy and project management.
Lady Judge, who chairs the atomic energy authority, said: "UKAEA Ltd is a decommissioning business par excellence, and it has an awful lot of work to do. But to get into the new-build business, we need a stronger financial backer."
She rejected the suggestion that the government was being pushed into a quick sale, saying the privatisation had been in preparation since 2004.
Some British companies have already expressed an interest in the business, and potential international buyers are also likely to come forward. Lady Judge said the buyer was "at least as likely to be a British company as a foreign one".
Possible buyers include the UK businesses Amec and VT Group, both of which have nuclear engineering operations. Areva of France and CH2M and URS of the US are also likely to be interested. The sale was backed last night by Prospect, the union representing nuclear engineers. The chosen buyer will not simply be the highest bidder, but the company that offers the best combination of cash and development plans for the business.
UKAEA Ltd, with a current annual turnover of £31m, is working on Britain's fourth-largest decommissioning project at Dounreay, northern Scotland.
Under European Union rules, the government cannot give financial guarantees to help it win contracts.
Simon Hughes, the Liberal Democrats' energy spokesman, called government nuclear policy "costly, risky and unnecessary". He added: "Liberal Democrats believe that we should decommission our old nuclear power stations and not recommission new ones."
Meanwhile, potential privatisations expected to be highlighted in the Budget include the Royal Mint and the Queen Elizabeth II conference centre in London. Other state-owned assets that could be earmarked for sale include British Waterways's canal-side properties.
But last year's failure to sell the Tote highlighted the relative dearth of private sector buyers in current market conditions.
Alistair Darling, the chancellor, has asked Gerry Grimstone, the chairman of Standard Life, to review the state's portfolio of 29 businesses to find ways to maximise return to the taxpayer.
The UK and atomic energy
Nuclear businesses sold off: Westinghouse, the nuclear engineer: sold to Toshiba for £2.9bn, 2006
BNFL services: sold to VT Group for up to £75m, 2007
British Energy, the nuclear generator: 36 per cent stake sold to EDF for £4.4bn, 2008
Atomic Weapons Establishment at Aldermaston: one-third stake sold to Jacobs Engineering of the US for an estimated £100m, 2008
Nuclear assets still held UKAEA Limited: up for sale, price about £50m
Nuclear Decommissioning Authority sites: auction under way
Urenco, uranium enrichment company: sale of government's one-third stake delayed indefinitely
Copyright The Financial Times Limited 2009
GM firmly in slow lane with ten-year-old 'green' technology
Published Date: 31 March 2009
By ALASTAIR DALTON
JUST as General Motors is facing possible oblivion due to its over-reliance on 4x4s, its greener models are receiving plaudits.
Technology developed a decade ago for GM's EV-1, an innovative sports car, is being used for a new generation of hybrid electric-petrol engine vehicles, under the Volt banner, which are due on sale in the US next year.Dr Paul Nieuwenhuis, an industry expert from Cardiff University's business school, said GM scrapped the EV-1 after deciding it could make more money from 4x4-type vehicles. He said of the Volt: "Due next year, they say – they are good."Philip Gomm, a spokesman for the Royal Automobile Club Foundation, said: "It is ironic that GM's greener models have gained good reviews. "Perhaps GM should have used more of their profits during the good years to design and build cars for an age when oil is in ever shorter supply, when many of their customers are increasingly aware of the environmental impact of their decision making."Edmund King, the president of the Automobile Association, said: "The GM Volt is potentially a massive step forward in greener technology."
Comrie takes Quayle Munro down green route with Argyll plan
Published Date: 31 March 2009
By Hamish Rutherford
EDINBURGH investment bank Quayle Munro has signalled a new focus on green energy projects after being appointed to raise up to £70 million to build the Carraig Gheal Wind Farm in Argyll.
Quayle Munro's head of corporate finance Rob Cormie yesterday admitted that obtaining large debt facilities for new projects in the face of a recession continued to be difficult. But he struck a confident note over the Argyll scheme, maintaining he had a strong proposition to go to banks with.Speaking as his firm announced it had been chosen to raise the cash, Cormie added: "There is no reason why we can't get this done over the summer".Carraig Gheal is a joint venture between Alloa-based GreenPower and Statkraft, a Norwegian state owned electricity company. Granted planning permission last June, the 60 megawatt proposal could be completed next year. But it is dependent on debt finance and while many projects are being held up by funding issues, Cormie claimed there is still investor interest in projects with potential.He explained: "There are still six to eight banks in this market who have capital to invest, and its a very sensible, well-structured project in the right place."While some investment funds were mandated to invest in ethical businesses, Cormie said he would be pitching to banks for the funding on purely financial grounds. He added: "It won't get overt brownie points because it's green, it'll get brownie points because it's well-structured, and they (banks] can make money out of it."A former City investment banker and partner on KPMG's corporate finance team, Cormie was hired by Quayle Munro last autumn to "sort out corporate finance in Scotland".Yesterday he signalled a new focus on Scottish wind power for the Aim-listed bank, claiming good projects could be financially sound in a regulatory system which encouraged renewable energy projects. "For Scotland this is a core market that has, and will, survive."
Stern: 'Kingsnorth should be shelved'
There is no technology yet to make coal-fired station clean, says climate adviser
By Steve Connor, Science Editor
Tuesday, 31 March 2009
Reuters
Lord Stern said the climate crisis was so urgent that we must reduce carbon dioxide emissions as fast and as soon as we can
Britain's latest coal-fired power station should not be built, according to Lord Stern of Brentford, the economist who led the Government's review into the financial cost of climate change. Lord Stern called on the Government to halt the planning process and said that the new coal-fired power station proposed for Kingsnorth in Kent cannot be justified until the technology is developed to capture and store its huge carbon dioxide emissions.
It is the first time that the author of the landmark 2006 Stern Review has spoken out against coal power.
Coal is one of the dirtiest fossil fuels in terms of the amount of carbon dioxide release per megawatt of electricity generated. Lord Stern said it was important to send out a message to other countries, notably China, that Britain will not contemplate new coal-fired power stations until carbon capture and storage is proved to work.
"We shouldn't go ahead because coal is so polluting and we need very strong examples of how to move forward with our electricity supply in a way that doesn't use coal... without carbon capture and storage," Lord Stern said.
It could take 10 or 15 years to develop the technology, where carbon dioxide emissions are prevented from being released into the atmosphere to exacerbate global warming. "There are other ways we can handle the interim," he said. "The fastest way is to put up a gas-fired power station. That is emitting, but much less so than coal. We've got to build up solar and wind."
Last year, James Hansen, the leading Nasa climate scientist, said: "Kingsnorth is a terrible idea. One power plant with a lifetime of several decades will destroy the efforts of millions of citizens to reduce their emissions."
Lord Stern said the climate crisis was so urgent that we must reduce carbon dioxide emissions as fast and as soon as we can, otherwise the expected increase in global average temperatures could exceed 5C above pre-industrial levels.
"We haven't seen temperatures like that for 30 million years," Lord Stern said. "We've got to understand the magnitude of the risks we face. It will transform where we live. Some places will be deserts, others will be racked by storms. It will involve the likely movement of hundreds of millions, possibly billions of people, and extended conflict."
By Steve Connor, Science Editor
Tuesday, 31 March 2009
Reuters
Lord Stern said the climate crisis was so urgent that we must reduce carbon dioxide emissions as fast and as soon as we can
Britain's latest coal-fired power station should not be built, according to Lord Stern of Brentford, the economist who led the Government's review into the financial cost of climate change. Lord Stern called on the Government to halt the planning process and said that the new coal-fired power station proposed for Kingsnorth in Kent cannot be justified until the technology is developed to capture and store its huge carbon dioxide emissions.
It is the first time that the author of the landmark 2006 Stern Review has spoken out against coal power.
Coal is one of the dirtiest fossil fuels in terms of the amount of carbon dioxide release per megawatt of electricity generated. Lord Stern said it was important to send out a message to other countries, notably China, that Britain will not contemplate new coal-fired power stations until carbon capture and storage is proved to work.
"We shouldn't go ahead because coal is so polluting and we need very strong examples of how to move forward with our electricity supply in a way that doesn't use coal... without carbon capture and storage," Lord Stern said.
It could take 10 or 15 years to develop the technology, where carbon dioxide emissions are prevented from being released into the atmosphere to exacerbate global warming. "There are other ways we can handle the interim," he said. "The fastest way is to put up a gas-fired power station. That is emitting, but much less so than coal. We've got to build up solar and wind."
Last year, James Hansen, the leading Nasa climate scientist, said: "Kingsnorth is a terrible idea. One power plant with a lifetime of several decades will destroy the efforts of millions of citizens to reduce their emissions."
Lord Stern said the climate crisis was so urgent that we must reduce carbon dioxide emissions as fast and as soon as we can, otherwise the expected increase in global average temperatures could exceed 5C above pre-industrial levels.
"We haven't seen temperatures like that for 30 million years," Lord Stern said. "We've got to understand the magnitude of the risks we face. It will transform where we live. Some places will be deserts, others will be racked by storms. It will involve the likely movement of hundreds of millions, possibly billions of people, and extended conflict."
Living walls and green roofs pave way for biodiversity in new building
Otters could return to urban rivers, bats could roost under bridges, swifts could flock to office blocks and peregrine falcons soar above cathedrals under recommendations from the UK Green Building Council
Felicity Carus
guardian.co.uk, Monday 30 March 2009 18.26 BST
What do the Westfield shopping centre, Canary Wharf and a Victorian museum have in common? They are all at the vanguard of a move to encourage biodiversity in buildings that could take on an unprecedented scale if guidelines published today are adopted.
Under recommendations from the UK Green Building Council (UKGBC) for developers, planners and policy-makers, Otters could return to urban rivers, bats could roost under bridges, swifts could flock to office blocks and peregrine falcons soar above cathedrals. Existing examples of encouraging biodiversity in buildings include the Westfield shopping centre in west London and its "living wall" planted with wildflowers, Canary Wharf's assortment of biodiversity initiatives, and the south London Horniman Museum's green roof, one of the country's first.
Carol Williams, the chairwoman of the UKGBC task group of biodiversity and construction industry experts, said the government's target for all new homes to be zero carbon by 2016 is changing attitudes in the construction industry. "The construction and property sector has been pilloried in the past for its negative impact on green space, wildlife and habitat – but the industry can actually have a positive influence on ecological value. If we don't make provision for wildlife now, then we might not be able to attract it retrospectively quite so easily," she said.
The UKGBC task group - which included Natural England, the Association of Local Government Ecologists, Bovis Lend Lease, the Canary Wharf Group, Grimshaw Architects - recommended 10 ways to encourage and enhance biodiversity in the built environment.
Just some of the design features which would encourage biodiversity in cities are specially made nesting bricks built into cavity walls for birds such as swifts and starlings, or ledges that mimic cliff faces for peregrine falcons which are attracted to tall buildings. Cathedrals, office blocks in Canary Wharf and Battersea power station in south London are all known to have housed breeding birds of prey.
Green corridors will allow other mammals to "commute", said Williams, and careful lighting and roosting boxes under bridges will allow Daubenton's and pipistrelle bats to inhabit areas which are ususally too bright for them.
But according to Dave Wakelin of sustainability consultants Hilson Moran, "green roofs" have the biggest impact on biodiversity in cities, because patches of roofspace that mimic grassland or shale environments can create their own ecosystem. Black redstarts, he says, have been attracted back to Canary Wharf by the shrill carder bee, a ground nesting bee that burrows into the sediments in the shale in the roof garden at 20 Cabot Tower.
In the City of London, CCTV is trained on peregrine falcons nesting in an office block so that staff can watch the progess of a breeding pair, as chicks hatch. Wakelin said this is just one initiative to get office workers more interested in the "priority" species in their city.
"We see buildings as extensions of green space. They are like fingers of greenery spreading out between buildings and act as green stepping stones between bigger areas of green space mean that you haven't got so many barren spaces left in cities."
Paul King, chief executive of the UKGBC, said: "If done well, new developments can actually create habitats in which wild species thrive, and which we can all enjoy. Green roofs, living walls, and good old-fashioned parks and green spaces in our built environment can make us all feel happier and healthier, and give something back to nature."
Environment minister Huw Irranca-Davies welcomed the report. He said: "Our wildlife brings opportunities as well as challenges, and this report demonstrates how the construction industry can show leadership in recognising how protecting and enhancing the UK's wildlife can bring economic as well as environmental benefits."
Felicity Carus
guardian.co.uk, Monday 30 March 2009 18.26 BST
What do the Westfield shopping centre, Canary Wharf and a Victorian museum have in common? They are all at the vanguard of a move to encourage biodiversity in buildings that could take on an unprecedented scale if guidelines published today are adopted.
Under recommendations from the UK Green Building Council (UKGBC) for developers, planners and policy-makers, Otters could return to urban rivers, bats could roost under bridges, swifts could flock to office blocks and peregrine falcons soar above cathedrals. Existing examples of encouraging biodiversity in buildings include the Westfield shopping centre in west London and its "living wall" planted with wildflowers, Canary Wharf's assortment of biodiversity initiatives, and the south London Horniman Museum's green roof, one of the country's first.
Carol Williams, the chairwoman of the UKGBC task group of biodiversity and construction industry experts, said the government's target for all new homes to be zero carbon by 2016 is changing attitudes in the construction industry. "The construction and property sector has been pilloried in the past for its negative impact on green space, wildlife and habitat – but the industry can actually have a positive influence on ecological value. If we don't make provision for wildlife now, then we might not be able to attract it retrospectively quite so easily," she said.
The UKGBC task group - which included Natural England, the Association of Local Government Ecologists, Bovis Lend Lease, the Canary Wharf Group, Grimshaw Architects - recommended 10 ways to encourage and enhance biodiversity in the built environment.
Just some of the design features which would encourage biodiversity in cities are specially made nesting bricks built into cavity walls for birds such as swifts and starlings, or ledges that mimic cliff faces for peregrine falcons which are attracted to tall buildings. Cathedrals, office blocks in Canary Wharf and Battersea power station in south London are all known to have housed breeding birds of prey.
Green corridors will allow other mammals to "commute", said Williams, and careful lighting and roosting boxes under bridges will allow Daubenton's and pipistrelle bats to inhabit areas which are ususally too bright for them.
But according to Dave Wakelin of sustainability consultants Hilson Moran, "green roofs" have the biggest impact on biodiversity in cities, because patches of roofspace that mimic grassland or shale environments can create their own ecosystem. Black redstarts, he says, have been attracted back to Canary Wharf by the shrill carder bee, a ground nesting bee that burrows into the sediments in the shale in the roof garden at 20 Cabot Tower.
In the City of London, CCTV is trained on peregrine falcons nesting in an office block so that staff can watch the progess of a breeding pair, as chicks hatch. Wakelin said this is just one initiative to get office workers more interested in the "priority" species in their city.
"We see buildings as extensions of green space. They are like fingers of greenery spreading out between buildings and act as green stepping stones between bigger areas of green space mean that you haven't got so many barren spaces left in cities."
Paul King, chief executive of the UKGBC, said: "If done well, new developments can actually create habitats in which wild species thrive, and which we can all enjoy. Green roofs, living walls, and good old-fashioned parks and green spaces in our built environment can make us all feel happier and healthier, and give something back to nature."
Environment minister Huw Irranca-Davies welcomed the report. He said: "Our wildlife brings opportunities as well as challenges, and this report demonstrates how the construction industry can show leadership in recognising how protecting and enhancing the UK's wildlife can bring economic as well as environmental benefits."
Renewables desperate to feel breath of funds
By Sheila McNulty in Houston
Published: March 31 2009 02:34
Renewables groups squeezed by the economic crisis are going bankrupt in spite of the billions in new funding for the sector earmarked by the administration of Barack Obama.
It could take several months for the government to establish a regulatory framework to disburse the funds set aside in the administration’s stimulus package to build a “green” economy. In the meantime, some companies already are in an untenable position.
Investment in renewables has been delayed or even terminated as the credit crisis has dried up capital. The slowdown has also resulted in sluggish sales of clean technology while plunging oil and natural gas prices have made such projects less economically viable.
“That has put a lot of pressure on companies operating in the renewable area,’’ said Charles Swanson, the managing partner of Ernst & Young’s Houston office. “They are starting to struggle mightily.’’
Ethanol producers in particular have been under pressure as a result of volatile corn prices.
VeraSun, Greater Ohio Ethanol and Gateway Ethanol were among the first victims, filing for Chapter 11 bankruptcy protection last October. The trend has continued this year, with Renew Energy and Northeast Bio-fuels filing in January.
The latest victim, Aventine Renewable Energy, told investors on March 16: “We do not expect to have sufficient liquidity to meet anticipated working capital, debt service and other liquidity needs during the current year unless we experience a significant improvement in ethanol margins or obtain other sources of liquidity.’’
The company is seeking additional debt and equity financing, as well as a potential sale of all or part of the business but admits it might not be successful in the current environment.
“If we cannot obtain sufficient liquidity in the very near term, we may need to seek to restructure under Chapter 11,’’ Aventine said.
The Obama administration says renewables were not given enough attention under the previous administration of George W. Bush. It has uncovered a backlog of 200 solar power project applications and 20 wind project applications awaiting action.
Ken Salazar, interior secretary, quickly established a taskforce to spur the development of such projects. “For the last administration, renewable energy simply wasn’t a priority,” he said. “They focused their time and resources almost exclusively on permitting for oil and gas.”
The Obama administration’s stimulus package includes $56bn in grants and tax breaks for US clean energy projects over the next 10 years and a budget calling for $15bn annually for renewable energy programmes. Yet Mr Swanson said: “Few, if any, of the funds have actually been distributed.’’
Once they are, he says, the financial support will enable many distressed companies to survive. “It’s certainly going to be a lifeline to get through the next five years.’’
Yet for renewables to take off long term, they must be able to compete with fossil fuels economically without government assistance. Estimates of the potential contribution to US energy supply of renewables varies from 10 per cent to 20 per cent in 20 years.
Rex Tillerson, chief executive of ExxonMobil, the world’s biggest publicly listed oil and gas company, said this month that the US needed to be realistic about how much renewables could add to the energy mix and within what timeframe. Exxon is not, at present, making any renewable investments, but Mr Tillerson said it had plenty of time. “We just think the timeline is very, very long, so we’re not going to miss anything.”’
Karl Miller, an energy expert and institutional investor with experience in utilities and energy trading, intends to hold off investing in renewables.
“Investors like me will be waiting on the sidelines during the short-term boom period and will look to step in and buy assets for pennies on the dollar when the renewable bust comes in a few years,’’ Mr Miller said.
By then, he said, the market would be littered with uneconomical renewable projects. As an investment model, he suggests, one need only look at the ethanol boom and bust of the past three years. “It was a clear demonstration that government handouts simply do not work.’’
Copyright The Financial Times Limited 2009
Published: March 31 2009 02:34
Renewables groups squeezed by the economic crisis are going bankrupt in spite of the billions in new funding for the sector earmarked by the administration of Barack Obama.
It could take several months for the government to establish a regulatory framework to disburse the funds set aside in the administration’s stimulus package to build a “green” economy. In the meantime, some companies already are in an untenable position.
Investment in renewables has been delayed or even terminated as the credit crisis has dried up capital. The slowdown has also resulted in sluggish sales of clean technology while plunging oil and natural gas prices have made such projects less economically viable.
“That has put a lot of pressure on companies operating in the renewable area,’’ said Charles Swanson, the managing partner of Ernst & Young’s Houston office. “They are starting to struggle mightily.’’
Ethanol producers in particular have been under pressure as a result of volatile corn prices.
VeraSun, Greater Ohio Ethanol and Gateway Ethanol were among the first victims, filing for Chapter 11 bankruptcy protection last October. The trend has continued this year, with Renew Energy and Northeast Bio-fuels filing in January.
The latest victim, Aventine Renewable Energy, told investors on March 16: “We do not expect to have sufficient liquidity to meet anticipated working capital, debt service and other liquidity needs during the current year unless we experience a significant improvement in ethanol margins or obtain other sources of liquidity.’’
The company is seeking additional debt and equity financing, as well as a potential sale of all or part of the business but admits it might not be successful in the current environment.
“If we cannot obtain sufficient liquidity in the very near term, we may need to seek to restructure under Chapter 11,’’ Aventine said.
The Obama administration says renewables were not given enough attention under the previous administration of George W. Bush. It has uncovered a backlog of 200 solar power project applications and 20 wind project applications awaiting action.
Ken Salazar, interior secretary, quickly established a taskforce to spur the development of such projects. “For the last administration, renewable energy simply wasn’t a priority,” he said. “They focused their time and resources almost exclusively on permitting for oil and gas.”
The Obama administration’s stimulus package includes $56bn in grants and tax breaks for US clean energy projects over the next 10 years and a budget calling for $15bn annually for renewable energy programmes. Yet Mr Swanson said: “Few, if any, of the funds have actually been distributed.’’
Once they are, he says, the financial support will enable many distressed companies to survive. “It’s certainly going to be a lifeline to get through the next five years.’’
Yet for renewables to take off long term, they must be able to compete with fossil fuels economically without government assistance. Estimates of the potential contribution to US energy supply of renewables varies from 10 per cent to 20 per cent in 20 years.
Rex Tillerson, chief executive of ExxonMobil, the world’s biggest publicly listed oil and gas company, said this month that the US needed to be realistic about how much renewables could add to the energy mix and within what timeframe. Exxon is not, at present, making any renewable investments, but Mr Tillerson said it had plenty of time. “We just think the timeline is very, very long, so we’re not going to miss anything.”’
Karl Miller, an energy expert and institutional investor with experience in utilities and energy trading, intends to hold off investing in renewables.
“Investors like me will be waiting on the sidelines during the short-term boom period and will look to step in and buy assets for pennies on the dollar when the renewable bust comes in a few years,’’ Mr Miller said.
By then, he said, the market would be littered with uneconomical renewable projects. As an investment model, he suggests, one need only look at the ethanol boom and bust of the past three years. “It was a clear demonstration that government handouts simply do not work.’’
Copyright The Financial Times Limited 2009
Cleaning It Won't Be Dirt Cheap
The Technology to Scrub Out Carbon Dioxide Is Within Reach, but It Costs Too Much Money and Consumes Too Much Energy
By JEFFREY BALL
Pleasant Prairie, Wis.
Big industry calls it the future. Al Gore suggests it's a fantasy. Whatever the truth about "clean coal," consumers will be paying for it one way or another.
Coal, more than any other fuel, powers the planet. It is the primary source of electricity in dominant economies from the U.S. to China to Germany. In all those places, coal is cheap and, unlike oil, domestically plentiful. Its use is rising, particularly in developing countries that soon will consume more energy than the industrialized world.
Coal's problem is that it is dirty. When burned, it spews out more carbon dioxide than any other fossil fuel. Globally, burning coal to make electricity is the biggest single source of man-made CO2 -- bigger than gasoline-powered cars and trucks. Governments world-wide are advocating massive cuts in greenhouse-gas emissions. It is hard to see how those cuts could materialize without clean coal.
Clean coal refers to the idea of harnessing the black rock's energy while safely disposing of the resulting CO2 rather than sending it skyward. In dueling television commercials, the power industry portrays it as a silver bullet nearly ready to be deployed, while environmental groups allied with Mr. Gore imply it's a smokescreen from a fossil-fuel industry under fire.
Right now, clean coal seems both possible and improbable. The basic elements of clean coal are already in use in small corners of industry. But whether it is broadly and quickly adopted around the world will depend less on science than on economics. Cleaning coal is very expensive.
Home to one of the world's most advanced clean-coal tests, the Pleasant Prairie power plant exposes the hyperbole on both sides of the debate. Fired up three decades ago, the plant has run full-bore ever since, adapting time and again to new environmental rules and still churning out some of the cheapest energy in the nation. It burns some 13,000 tons of coal daily to produce 13% of the electricity consumed by all of Wisconsin.
New rooms of machinery have been added to scrub a swirl of pollutants from the plant's exhaust before it is released into the air. Today, half as much space at the plant is devoted to preventing pollution as to producing power. That has slashed the plant's output of chemicals that cause respiratory disease and acid rain. But it has done nothing to trim the plant's emissions of CO2. This coal-fired power plant is cleaner than it once was, but it still isn't "clean." This plant pours out some 8.6 million tons of CO2 annually -- about as much as 1.7 million U.S. cars.
Is clean coal a real solution to Americas energy problems? WSJ's Jeff Ball goes to Pleasant Prairie, Wisconsin to examine a clean coal plant.
The first step in making coal more climate-friendly is for a power plant to capture most of its CO2. A handful of plants today capture small amounts of the gas for reasons unrelated to climate change. One in Maryland, for example, sells it for making soft drinks and beer, and for freezing food. One byproduct of power generation is steam, and the federal government offers incentives to plants that make more-efficient use of it. Steam is also used to capture CO2.
A year ago, the Pleasant Prairie plant entered this first phase with an experiment to capture its CO2. The machinery for extracting the gas here is three stories tall. But at the 425-acre plant, it seems tiny. Its pipes pull a bit of exhaust from the power plant and then remove the CO2 in a process that involves mixing the gas with ammonia.
So far, the test is grabbing only about 1% of the greenhouse gas the plant coughs out. The method still consumes too much energy, says Sean Black, a manager at Alstom SA, the French company managing the test. "We're just in the beginning of this process," he says.
The second step -- one not yet attempted here at the Wisconsin plant -- is to take the captured CO2 and dispose of it safely, perhaps by burying it. CO2 has been shot underground for decades in places like Texas, where it is injected into aging oil and gas fields to force the remaining fossil fuel up through wells. Some 30 million tons of CO2 are injected into oil and gas wells annually in the U.S., according to federal statistics. That is tiny -- less than 1% of the roughly six billion tons of CO2 the country annually exhales.
Howard Herzog, a leading clean-coal specialist at Massachusetts Institute of Technology, is a technological optimist and a political realist. He believes scientists can find ways to slash power plants' CO2 output just like they figured out how to slash those plants' output of pollutants that foul air and streams. But it will take a lot of money: MIT recommended in a recent study that the U.S. nearly quadruple its clean-coal spending, to $1 billion a year. And that is just for research.
It also will take patience. An anticoal backlash is gathering steam in the U.S., and Mr. Herzog worries it will block all new coal-fired power plants in the country, which could boost electricity prices. A rational compromise, he believes, would be to allow new coal-fired plants to keep their CO2 emissions at the same level as natural-gas-fired plants through the use of cleaning technology. That would amount to an emissions cut of about 50% below the level of a conventional coal-fired plant, while raising the cost of generation by 50%, Mr. Herzog figures. Consumers probably wouldn't see rate boosts that high, he says, because generating costs are only one factor in determining retail electricity rates.
Still, clean coal has proven too expensive before. Earlier this decade, the federal government launched a multibillion-dollar research program intended to build a carbon-free, coal-fired power plant. Last year, when the cost of that program nearly doubled to $1.8 billion, the government effectively shut it down.
The Pleasant Prairie power plant is a monument to the fickleness of the nation's energy priorities -- and to the stubborness of coal. Designed in the wake of sweeping 1970s federal environmental laws, the power plant was the first built by Wisconsin Energy Corp. to burn coal from Wyoming's Powder River Basin rather than from nearby Illinois or Appalachia. One reason is that Western coal is lower than the Eastern variety in sulfur, which forms a pollutant the laws capped.
At the time, Wisconsin Energy intended to build new nuclear plants, too. But Wisconsin effectively banned new nuclear-plant construction in the state. Without an alternative, Wisconsin Energy has run the Pleasant Prairie plant to crank out more power than originally planned. As the federal government has further toughened clean-air standards, the company kept adding pollution-scrubbing equipment to keep the plant alive.
The crackdown on CO2 is just the latest -- and biggest -- regulatory shift prodding more changes to the plant. On a recent frigid morning, in a scene that brought to mind an old whiskey still, one of the shiny pipes for capturing CO2 was shaking and clanging, and steam was pouring out the top. Alstom's Mr. Black said the contraption looked so jury-rigged because engineers had to modify it to resolve problems that cropped up.
That burst of steam could be the industry's last gasp. It also could be a fresh breath from an industry with plenty of life left.
Write to Jeffrey Ball at jeffrey.ball@wsj.com
By JEFFREY BALL
Pleasant Prairie, Wis.
Big industry calls it the future. Al Gore suggests it's a fantasy. Whatever the truth about "clean coal," consumers will be paying for it one way or another.
Coal, more than any other fuel, powers the planet. It is the primary source of electricity in dominant economies from the U.S. to China to Germany. In all those places, coal is cheap and, unlike oil, domestically plentiful. Its use is rising, particularly in developing countries that soon will consume more energy than the industrialized world.
Coal's problem is that it is dirty. When burned, it spews out more carbon dioxide than any other fossil fuel. Globally, burning coal to make electricity is the biggest single source of man-made CO2 -- bigger than gasoline-powered cars and trucks. Governments world-wide are advocating massive cuts in greenhouse-gas emissions. It is hard to see how those cuts could materialize without clean coal.
Clean coal refers to the idea of harnessing the black rock's energy while safely disposing of the resulting CO2 rather than sending it skyward. In dueling television commercials, the power industry portrays it as a silver bullet nearly ready to be deployed, while environmental groups allied with Mr. Gore imply it's a smokescreen from a fossil-fuel industry under fire.
Right now, clean coal seems both possible and improbable. The basic elements of clean coal are already in use in small corners of industry. But whether it is broadly and quickly adopted around the world will depend less on science than on economics. Cleaning coal is very expensive.
Home to one of the world's most advanced clean-coal tests, the Pleasant Prairie power plant exposes the hyperbole on both sides of the debate. Fired up three decades ago, the plant has run full-bore ever since, adapting time and again to new environmental rules and still churning out some of the cheapest energy in the nation. It burns some 13,000 tons of coal daily to produce 13% of the electricity consumed by all of Wisconsin.
New rooms of machinery have been added to scrub a swirl of pollutants from the plant's exhaust before it is released into the air. Today, half as much space at the plant is devoted to preventing pollution as to producing power. That has slashed the plant's output of chemicals that cause respiratory disease and acid rain. But it has done nothing to trim the plant's emissions of CO2. This coal-fired power plant is cleaner than it once was, but it still isn't "clean." This plant pours out some 8.6 million tons of CO2 annually -- about as much as 1.7 million U.S. cars.
Is clean coal a real solution to Americas energy problems? WSJ's Jeff Ball goes to Pleasant Prairie, Wisconsin to examine a clean coal plant.
The first step in making coal more climate-friendly is for a power plant to capture most of its CO2. A handful of plants today capture small amounts of the gas for reasons unrelated to climate change. One in Maryland, for example, sells it for making soft drinks and beer, and for freezing food. One byproduct of power generation is steam, and the federal government offers incentives to plants that make more-efficient use of it. Steam is also used to capture CO2.
A year ago, the Pleasant Prairie plant entered this first phase with an experiment to capture its CO2. The machinery for extracting the gas here is three stories tall. But at the 425-acre plant, it seems tiny. Its pipes pull a bit of exhaust from the power plant and then remove the CO2 in a process that involves mixing the gas with ammonia.
So far, the test is grabbing only about 1% of the greenhouse gas the plant coughs out. The method still consumes too much energy, says Sean Black, a manager at Alstom SA, the French company managing the test. "We're just in the beginning of this process," he says.
The second step -- one not yet attempted here at the Wisconsin plant -- is to take the captured CO2 and dispose of it safely, perhaps by burying it. CO2 has been shot underground for decades in places like Texas, where it is injected into aging oil and gas fields to force the remaining fossil fuel up through wells. Some 30 million tons of CO2 are injected into oil and gas wells annually in the U.S., according to federal statistics. That is tiny -- less than 1% of the roughly six billion tons of CO2 the country annually exhales.
Howard Herzog, a leading clean-coal specialist at Massachusetts Institute of Technology, is a technological optimist and a political realist. He believes scientists can find ways to slash power plants' CO2 output just like they figured out how to slash those plants' output of pollutants that foul air and streams. But it will take a lot of money: MIT recommended in a recent study that the U.S. nearly quadruple its clean-coal spending, to $1 billion a year. And that is just for research.
It also will take patience. An anticoal backlash is gathering steam in the U.S., and Mr. Herzog worries it will block all new coal-fired power plants in the country, which could boost electricity prices. A rational compromise, he believes, would be to allow new coal-fired plants to keep their CO2 emissions at the same level as natural-gas-fired plants through the use of cleaning technology. That would amount to an emissions cut of about 50% below the level of a conventional coal-fired plant, while raising the cost of generation by 50%, Mr. Herzog figures. Consumers probably wouldn't see rate boosts that high, he says, because generating costs are only one factor in determining retail electricity rates.
Still, clean coal has proven too expensive before. Earlier this decade, the federal government launched a multibillion-dollar research program intended to build a carbon-free, coal-fired power plant. Last year, when the cost of that program nearly doubled to $1.8 billion, the government effectively shut it down.
The Pleasant Prairie power plant is a monument to the fickleness of the nation's energy priorities -- and to the stubborness of coal. Designed in the wake of sweeping 1970s federal environmental laws, the power plant was the first built by Wisconsin Energy Corp. to burn coal from Wyoming's Powder River Basin rather than from nearby Illinois or Appalachia. One reason is that Western coal is lower than the Eastern variety in sulfur, which forms a pollutant the laws capped.
At the time, Wisconsin Energy intended to build new nuclear plants, too. But Wisconsin effectively banned new nuclear-plant construction in the state. Without an alternative, Wisconsin Energy has run the Pleasant Prairie plant to crank out more power than originally planned. As the federal government has further toughened clean-air standards, the company kept adding pollution-scrubbing equipment to keep the plant alive.
The crackdown on CO2 is just the latest -- and biggest -- regulatory shift prodding more changes to the plant. On a recent frigid morning, in a scene that brought to mind an old whiskey still, one of the shiny pipes for capturing CO2 was shaking and clanging, and steam was pouring out the top. Alstom's Mr. Black said the contraption looked so jury-rigged because engineers had to modify it to resolve problems that cropped up.
That burst of steam could be the industry's last gasp. It also could be a fresh breath from an industry with plenty of life left.
Write to Jeffrey Ball at jeffrey.ball@wsj.com
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