Monday, 20 April 2009

Scottish Agenda:

The Sunday Times
April 19, 2009
Ian Fraser

Ed Miliband desperately wants to persuade Scotland’s first minister, Alex Salmond, to learn to stop worrying and love the . . . well, not the bomb but nuclear energy. Given Salmond’s well known antipathy for this sort of power — his government’s mantra is that nuclear energy is “dangerous and unnecessary” — that might be an uphill struggle.
The UK secretary of state for energy and climate change was last week on a visit to Scotland with his cabinet colleagues, who gathered for a near-unprecedented cabinet meeting in the SECC’s “Big Red Shed” on Thursday.
Speaking on Radio Scotland, Miliband lambasted the Scottish government for what he sees as its wrong-headed opposition to nuclear power.
He suggested that Salmond’s stance on the issue, driven by an overwhelming faith in renewables, is misplaced because without new nuclear power plants, Scotland might struggle to meet its base-load requirements on windless and less-windy days after the existing reactors at Torness and Hunterston are shut down after 2020.
He also suggested that the SNP’s “no new nukes” policy is politically inept, since each new nuclear power station would employ 9,000 people.
Miliband told Radio Scotland: “I think that’s a shame for Scotland in industrial terms and I don’t think it’s the right decision for the UK in energy terms, but it does remain a decision for Scotland.”
He appeared to be relaxed about the disposal of nuclear waste, even though burying it seems an inadequate long-term solution. And no mention was made of the fact that the world’s supplies of uranium are expected to run out within 60 years.
Salmond then came bounding into the studio to denounce Miliband for launching a “nuclear strike” on Scotland. The nub of Salmond’s argument was that to build nuclear power stations would divert investment and resources from the renewable energy and carbon-capture technologies.
Salmond has of late become a convincing champion of a green solution to Scotland’s looming energy gap.
The notion that we should focus on the potential of wave power and offshore wind — resources which are plentiful in Scotland and where we have a competitive and technological advantage — rather than buying in atomic technology from France and Canada, makes strategic sense.
Also, with a population of just 5m, Scotland has less need for nuclear power than more densely populated regions such as England.
Salmond argued that the jobs created by nuclear power are decades away, whereas those in the renewables industry are already in the pipeline.
But to put all the country’s energy eggs into the green basket may prove short-sighted. A recent report by the SCDI, produced by the energy consultants Wood Mackenzie, said that new nuclear power should at least be “considered as a potential part of the longer-term generation base in Scotland”.
Ways must be found to replace existing power plants with baseload, low-carbon alternatives after 2020.
Windy days ahead
Scotland may be behind the curve where wind energy is concerned. Delays to improving the nation’s transmission infrastructure have meant many onshore developments are on hold while, in offshore wind, we lag behind the field. There is only one active offshore farm in Scotland, the two-turbine Beatrice project in the Moray Firth.
However, it seems we could be generating 6GW of energy from offshore wind farms soon after 2011. Perth-based Scottish and Southern Energy is bidding for offshore sites all around the UK and Scottish coasts. Its Airtricity subsidiary has teamed up with Sea Energy Renewables to look at expanding the Beatrice site, and to develop two new wind array sites off the Scottish coast.
Per Hornung Pedersen, chief executive of German wind turbine manufacturer Repower Systems, last week told me that, if the political will is there, Scotland could generate more than 10 times its domestic energy needs through renewables alone.
Few signs of cheer
On a visit to Glasgow last week, Peter Mandelson, the business secretary, said it’s time we stopped being so “darned pessimistic” and “looked on the upside”.
Mandy was roundly mocked for his optimistic stance. But economic downturns can become self-perpetuating through excessive glumness among pundits, politicians and the public.
However, it is also true that, apart from vaguely positive signs of life from US banks, there are few reasons to be cheerful. And Alistair Darling is, of course, due to take a scythe to his growth forecasts on Wednesday.
Spare a thought, however, for the workers at Dundee-based Prisme Packaging. They have been staging a sit-in at their former employer’s offices since being made redundant six weeks ago. After requests for funding fell on deaf ears at RBS and Lloyds, they look set to be evicted tomorrow. No amount of quantitive easing will save their jobs.

Ed Miliband to back power supply from clean coal

The Times
April 20, 2009
Carl Mortished

Mounting fears within government circles that Britain’s utilities are poised for a new dash for gas – increasing the country’s future power dependence on fuel imports from Russia – has persuaded Ed Miliband, the Energy and Climate Change Secretary, to back funding for a second clean coal demonstration power plant.
In an attempt to ensure that coal remains part of the UK energy mix, he will also set out licensing conditions for more coal power stations.
Mr Miliband’s renewed pitch for clean coal, which could be timed to coincide with the Budget on Wednesday, is to be pushed out quickly to counter scepticism in the power industry that the Government has a viable strategy to promote carbon capture and storage (CCS) technology.
Lack of a long-term government strategy to ensure the commercial viability of power plants that use CCS, a technology that has not been proven on a commercial scale, is creating anxiety in the power industry.

Mr Miliband is opposed to granting licences for new coal plants that are “carbon-capture ready”, arguing that this provides no commitment to reduce carbon dioxide. However, power companies argue that a new coal plant with CCS is not financially viable if it must compete against electricity supplied by other coal or gas plants that do not carry the cost of capturing CO2 .
According to E.ON, the extra cost of CCS for a large coal-fired power station would place it between on-shore and offshore wind generation in terms of its competitiveness. Without the benefit of a regime, such as the renewable obligation that forces power utilitites to buy wind power, CCS cannot compete with coal or gas-fired generators, the German utility says. It has applied to build a new coal power station at Kingsnorth, Kent, where it is committed to closing the existing two gigawatt coal-fired generator to comply with European Union rules on sulphur dioxide emissions. Five coal power stations, representing 10 per cent of Britain’s power capacity and owned by E.ON, RWE, npower, ScottishPower and Scottish & Southern, must close by the end of 2015 to comply with EU law. Without rapid investments in new power stations, the country could face blackouts within five years, experts say.
The chief executive of one company facing a big investment decision said that the Government’s inaction on a CCS regime was forcing his hand: “If I was to do the obvious thing, I would build a gas-fired plant. Without a carbon tax of some kind or a renewable obligation, there is no way you can build CCS.”
Officials at the Department of Energy and Climate Change are worried that the yawning electricity gap will prompt a late dash by utilities to build gas-fired power stations. Yet huge opposition to coal remains. Mr Miliband, therefore, will propose a funding mechanism to support a second CCS demonstration plant. He will also spell out licensing conditions for new coal-fired generators to ensure that there is a binding commitment to reduce carbon emissions.
The announcement is intended to send a signal that the Government is committed to keep coal in the energy mix, but it may fall short of providing a long-term strategy to ensure the viability of investments in CCS technology. E.ON estimates that a CCS plant large enough to capture 90 per cent of the carbon emitted from a new Kingsnorth coal plant would cost about £1 billion. Operating costs are also high as about a fifth of the electricity produced is lost in stripping out and capturing the CO2 emissions.
Tim Dyke, E.ON’s clean coal business development manager, said: “We need a financial mechanism enabling us to recover the additional costs. The carbon price is not high enough to support it.”
Britain had hoped that Europe’s Emissions Trading System would create financial incentives to build CCS power plants, but the price of allowances to emit carbon dioxide, known as EUAs, has collapsed. Idle factories and falling demand for power has cut Europe’s carbon emission, leaving industry with surplus EUAs that cash-strapped companies have dumped on the market. The carbon price is about €14 per tonne, but E.ON reckons that for CCS plants to compete on a large scale with ordinary coal and gas-fired generators, a price of €40 is needed. Without subsidy, a demonstration plant might need a price of €100 to compete.
Mr Dyke said: “If we cannot go the coal with CCS route, we will invest in gas-fired power stations.”

Tata directors take environmental tour

By Richard Milne in London
Published: April 19 2009 17:11

Senior managers from Tata will visit Europe and some of the continent’s biggest companies this week as the Indian conglomerate seeks to catch up with western business on environmental protection moves.
Led by JJ Irani, a director of the Tata Sons holding company and a former head of Tata Steel, the group will visit companies such as Siemens and Ikea as well as a former chief executive of BP and ex-chairman of Royal Dutch Shell.

“Tata is new at this game,” Mr Irani told the Financial Times, explaining that the Indian group had not concentrated much on environmentally friendly products until now.
“What we wanted was the experience of other global conglomerates who have been on this journey before,” he said.
Scandinavian companies form the backbone of the trip with Mr Irani and other Tata executives also going to visit the chief executives of shipping company Wilh Wilhelmsen, telecommunications group Telenor and risk management company Det Norske Veritas, as well as senior managers at fertiliser group Yara and Statoil Hydro, the Norwegian oil company.
“We are not shy of learning,” said Mr Irani, who is a director of a number of Tata companies including its steel and automotive businesses. “We are behind as far as the world is concerned . . . There are many Scandinavian companies because they are more conscious of this than the rest of us.”
Tata has come in for heavy criticism from some environmentalists about the Nano, the world’s cheapest car, but the Indian company retorts that it is more fuel-efficient than a motorbike.
Tata sees a big opportunity because it operates in some of the biggest polluting sectors such as power generation, steel manufacturing and chemicals and carmaking. It has set up a group dedicated to exploring ways of becoming more environmentally friendly and has about 100 people working on it across all its companies.
The Tata managers will also meet some grandees of the oil industry including Lord Browne, the former BP chief executive, and Lord Oxburgh, ex-chairman of Shell.
They will also visit executives at banks Standard Chartered and Deutsche Bank as well as Siemens, Europe’s largest engineering group.
All this has been arranged through the Global Leadership & Technology Exchange (GLTE), a grouping of companies looking to see how they can grow together in what they describe as “a low-carbon world”.
The grouping has led to co-operation between companies including General Motors and Gazprom on future car and fuel infrastructure in Russia and Wilh Wilhelmsen and Yara on nitrogen oxides. The GLTE held its last big meeting in Mumbai, India.
Mr Irani said he was taking managers from Tata companies to see how other groups behaved. “We want to see what sort of problems they face and how they deal with it so we can catch up faster.”
Copyright The Financial Times Limited 2009


Paul Brown
The Guardian, Monday 20 April 2009

Local authorities and homeowners cut trees down far too readily in urban areas. This is partly because they fear branches might fall on someone and also that insurance companies say tree roots can cause subsidence if they are too close to buildings.
However, the benefits of urban trees far outweigh disadvantages, particularly as climate change makes urban areas too hot for comfort in the summer. Increasing tree cover by 10% in an urban area reduces the summer temperature between 3C and 4C. Green corridors of trees and grass create oases of cool air.
Trees are also vital in reducing urban flash flooding. More intense rainfall is leading some authorities to consider new systems of storm drains although trees can be more effective. They absorb around 30% of rain through their leaf system before it hits the ground and about the same again through the roots. More than half the rain is transpired back into the air so avoiding the need for extra drains.
Trees have direct health benefits by soaking up pollution. They turn carbon dioxide back into oxygen along busy streets and deal with a large part of the deadliest form of pollution, the tiny particulates from vehicle exhausts. These kill thousands of people in UK cities each year, and trigger asthma attacks. In tree-lined streets levels of pollution are far lower because the particulates stick to leaves and twigs. When it rains the particulates are washed harmlessly away.

Carbon emissions fuelled by high rates of obesity

Alok Jha
The Guardian, Monday 20 April 2009

High rates of obesity in richer countries cause up to 1bn extra tonnes of greenhouse gas emissions every year, compared with countries with leaner populations, according to a study that assesses the additional food and fuel requirements of the overweight. The finding is particularly worrying, scientists say, because obesity is on the rise in many rich nations.
"Population fatness has an environmental impact," said Phil Edwards, from the London School of Hygiene and Tropical Medicine. "We're all being told to stay fit and keep our weight down because it's good for our health. The important thing is that staying slim is good for your health and for the health of the planet."
The study, carried out by Edwards and Ian Roberts, is published today in the International Journal of Epidemiology.
In their model, the researchers compared a population of 1 billion lean people, with weight distributions equivalent to a country such as Vietnam, with 1 billion people from richer countries, such as the US, where about 40% of the population is classified obese.
The fatter population needed 19% more food energy for its energy requirements, they found. They also factored in greater car use by the overweight. "The heavier our bodies become the harder it is to move about in them and the more dependent we become on cars," they wrote.
The greenhouse gas emissions from food production and car travel for the fatter billion people were estimated at between 0.4bn and 1bn extra tonnes a year. That is a significant amount in comparison with the world's total emissions of 27bn tonnes in 2004.
Last September the world's leading authority on climate change suggested the people should eat less meat, because meat production causes 20% of global emissions. Rajendra Pachauri, chairman of the UN Intergovernmental Panel on Climate Change, said consumers should begin with one meat-free day a week.

Electric cars and more efficient ways of cutting carbon emissions

The Guardian, Monday 20 April 2009

Dr Rob McMinn and Peter Evennett question the effect on energy efficiency of moving to electric cars (Letters, 17 April). One way of quantifying this is by calculating the distance covered per unit energy content for each of the respective fuels (electricity and petrol). To get a comparison over the full "well-to-wheel" cycle, overall efficiencies can be established by taking into account the efficiencies of extraction, generation, transmission, distribution and motor/engine performance for each fuel type. One set of published figures indicates that a high-performance electric car reaches more than twice the well-to-wheel efficiency of the most efficient of current petrol-driven models. In kilometres per megajoule of energy (km/MJ), the figures are 1.14 (electric), compared to 0.52 (petrol). These equate to CO2 emissions of roughly 13 grams per kilometre and 39g/km respectively. The analysis assumes electricity generation from high-efficiency combined-cycle natural gas plants, so for existing coal-fired plants the difference would be less. But we should anticipate that the transfer to electric cars on any substantial scale would be likely to take a decade or more, by which time electricity generation should depend on a far greater proportion of cleaner sources. Philip CoghlanRomford, Essex
A simpler, cheaper, more effective strategy for reducing carbon emissions (Labour's £5,000 sweetener to launch electric car revolution, 16 April) would be to encourage home-based work. Travel to and from work accounts for 30% of UK surface emissions and people, in general, don't enjoy commuting. Home-based work is a popular, family-friendly, environmentally sustainable working practice. For goodness sake, don't encourage everyone to buy a new car.Dr Frances HollissResearch fellow, Cities Institute, London Metropolitan University
With scientists issuing ever more frantic warnings about climate change, the government's proposed £250m fund to provide grants of up to £5,000 to encourage the purchase of electric cars has to be worth considering. However, I cannot help thinking that the government could spend the money on creating cycle-friendly streets. Cycling is far greener than any electric car will ever be. What is more, it helps reduce congestion, tackle obesity and improve road safety as well.Roger GeffenCTC, the national cyclists' organisation

Price floor needed to justify cost of CO2 capture

The Times
April 20, 2009

Analysis: Carl Mortished

What could persuade you to pay billions of dollars to build a refinery twice as big as Wembley Stadium to extract a gas of value to no one and then have it put it in a hole below the North Sea? This is what the Government is asking Britain's utilities to do. Unsurprisingly, they are shuffling their feet. The technology to extract CO2 from power station flues and from the original fuel (coal, coke or natural gas) is proven, but no one has done it on a scale to decarbonise a 2,000 megawatt electricity generator. Costs spin out of control in first attempts, but the problem is greater because we are asking power companies to add cost for no return. Carbon capture and storage (CCS) is commercial nonsense, but government has decreed that CO2 has a value - not a positive one (it is a mainly useless gas) but negative. Power companies fear that if they build fossil-fuel power plants without CCS, they will soon be punished. Businesses can work with negative value, but must know the potential harm. They want to see the carbon price that must be paid. Otherwise, carbon is another wild variable, like oil prices, and even worse because it is political. A carbon price floor, a tax or a mandate to buy CCS-abated electricity, is the answer and it is interesting that companies are now seeking competitive advantage; National Grid wants to ship CO2; BP is pitching itself as a hydrogen supplier and CO2 storer. The ball is in the Government's court.

Barack Obama's America poised to take lead over carbon

The Times
April 20, 2009
Carl Mortished

America will overtake Europe in developing technology to reduce carbon, reckons Lewis Gillies, chief executive of Hydrogen Energy. The Obama Administration will “photocopy” Calfornia’s cutting-edge environmental legislation and make it the standard across the country — and “that will push Europe to move its ETS forward”, Mr Gillies said.
Hydrogen Energy, a joint venture between BP and Rio Tinto, is investing in two $2 billion (£1.3 billion) power schemes to capture carbon dioxide and inject it into old oilfields. One project is in Abu Dhabi, backed by the Emirates Government. The other is in Bakersfield, California. This will extract CO2 from petroleum coke (the residue from a local BP refinery) and inject it into an old Californian oilfield, a process that will enhance oil recovery and offset some of the additional cost of the plant. The extraction of CO2 creates a pure hydrogen fuel that powers a 400 megawatt electricity generator.
BP abandoned efforts to build a carbon capture and storage (CCS) plant in Britain more than a year ago when it became clear that the Government was not ready to give a long-term commitment to back CCS technology. The Government also preferred to back a specific form of CCS, favouring so-called post-combustion technology, whereas BP is putting its weight behind pre-combustion technology. In post-combustion CCS, the emissions from the power generator are chemically treated to capture carbon dioxide, much as sulphur dioxide is removed from the flues of many coal-fired generators. Pre-combustion extracts CO2 from the feedstock coal by transforming it into synthetic gas.
The Government is taking the wrong approach to CCS, argues Ian Temperton, managing director of Climate Change Capital. “The Government is trying to buy a power station; there is a procurement process. Our view is they should instead establish an incentive process to help to repay the capital cost and operating cost over time.”

The Government has done a partial U-turn, having decided to back more than one demonstration plant and different technologies, but it is still in the procurement game. Hydrogen Energy wants to build CCS plants in Europe, taking advantage of BP’s position in the North Sea, where it has interests in hundreds of oilfields that have potential as carbon dioxide storage reservoirs.
For Hydrogen Energy, CCS is a fuel business, not a power-station clean-up business. “This technology is beyond the industry’s capability. We will take a fossil fuel, convert it into hydrogen, store the carbon dioxide and sell hydrogen to the power industry. We will sell carbon-free fuel at the door of the power plant,” Mr Gillies said.
National Grid, owner of Britain’s gas pipeline and power grid, is investigating the feasibility of using old gas pipelines to create a carbon dioxide transport network that would move CO2 from clusters of power stations in the Thames Estuary and the Humber to North Sea oil and gasfields.

Congress Inclined to Act First on Health


WASHINGTON -- Shortly after Congress returns from recess Monday, lawmakers will have to choose which Obama promise to make a higher priority -- overhauling the health-care system or addressing climate change.
A growing number of Democratic lawmakers prefer health care, saying that has a far greater chance of producing consensus than climate change, inside the party and across party lines. And they argue that it would be a more tangible accomplishment to present to financially stressed voters heading into the 2010 midterm elections.
"Moving forward on health-care reform should be first among equals," Rep. Chris Van Hollen (D., Md.) said in an interview. Mr. Van Hollen, a member of the House leadership team, said the House will also "make substantial progress" on climate change, including consideration of a cap-and-trade plan to control harmful emissions. But he stressed health care has the best prospect for enactment. "That is in a position to move through the entire process first," he said.
Health care "is a way of delivering major good news to voters," added Rep. Jim Cooper (D., Tenn.), a top leader in the Blue Dogs, a group of moderate Democrats.
The White House and Democratic congressional leaders say both issues remain at the top of their agenda. Mr. Obama looks "forward to working with [the] leadership on Capitol Hill in the months to come on both issues," said White House spokesman Jen Psaki.
The push to address climate change was given new urgency Friday, when the Obama administration ruled that greenhouse gases "endanger public health" and said that unless Congress acts, new regulations would be forthcoming. In response, business groups said they would push for a new law from Capitol Hill, preferring that to potentially more costly emissions rules from the Environmental Protection Agency.
Both issues are complex and politically difficult, and Capitol Hill has rarely completed landmark legislation on two fronts in one year. With four months gone in 2009 and the 2010 election looming, the window for substantive legislative action will narrow sharply.
Beyond those measures, Democrats have a long to-do list. They still have to conclude action on the fiscal 2010 budget. They face fights over the next round of funding for the U.S.-led wars abroad as well as congressional demands to set benchmarks for progress in Afghanistan. Complex legislation is also moving that would overhaul regulation of financial markets.
Mr. Cooper said health care is ripe for action in part because Congress has already had extensive debates on the issue, going back to the failed Clinton effort in 1994. "You don't have to start from scratch," he said, suggesting that climate change is relatively new to voters and would have a big impact on the economy -- and consumers -- while not producing an immediate benefit for voters. "Climate change doesn't have a lot of great news in it," he said.
House Energy and Commerce Chairman Henry Waxman (D., Calif.) is vowing to have a climate-change bill ready for floor action by Memorial Day. He has unveiled a draft that would control greenhouse gases by capping harmful emissions and creating a trading system that helps corporations comply with the limits. His panel will convene several hearings on the issue this week, and a key subcommittee will take up the bill in the last week of the month.
Republicans are attacking the initiative as a tax on consumers, who would face greater energy costs. More problematic, Democrats are divided, especially in the Senate, with manufacturing and coal-state lawmakers resisting aggressive action.
Sen. Charles Schumer (D., N.Y.) said climate change and health care remain "high priorities." But he looks at the political landscape and sees stronger interest in health care. "If you had to rank them, health care is probably a little bit higher," he said.
While health care may have a smoother path than climate change, even that won't be easy, with many details remaining to be worked out. Among them: how to pay for expanded coverage, which is estimated to cost more than $1 trillion over 10 years.
Write to Greg Hitt at

U.K. Budget to Include Funds for Low-Carbon Industries

U.K. Treasury Chief Alistair Darling is set to announce around £500 million in spending aimed at promoting low-carbon industries in his budget on Wednesday, a person familiar with the matter said.
This investment will match a similar amount of money announced in Mr. Darling's so-called pre-budget report in November.
The so-called "green" investment will be used to promote energy efficiency in homes and businesses as well as support for low-carbon technologies that are being developed in the U.K and are close to being marketed. The government has singled out green technologies as being an industry it wants to focus on. It estimates that by 2015 the sector can grow by £45 billion to £150 billion and employ 1.3 million people.
Mr. Darling faces a tricky balancing act in this year's spending plan. He has to come up with measures that will help prop up the U.K.'s ailing economy and deal with the consequences, such as unemployment, while not adding to an already large debt burden.
The government has said, for instance, that it will announce measures to help those who have lost their job. In an interview with the Observer newspaper on Sunday, Mr. Darling also said that a long mooted scheme to help kick off the country's mortgage market by guaranteeing bonds that bundle up these securities will be worth £50 billion.
Write to Alistair MacDonald at