By SHAI OSTER
BEIJING -- Environmental exchange BlueNext, Europe's largest spot market for carbon credits, is partnering with a Chinese exchange, as foreign companies bet that China will eventually allow some form of domestic or international emissions-trading scheme.
BlueNext said it will sign a memorandum of understanding with China Beijing Environmental Exchange to look at setting up a market for trading of carbon-emissions credits down the road.
"This is another step in our wish to expand our market into the great potential that is China, and the rest of Asia. But [it is] also another step in our long-held ambition to be the reference point for a single international price for carbon," said Serge Harry, chief executive of BlueNext.
Currently, foreign investors in pollution-reduction projects in China can create credits, called certified emissions reductions, that can then be applied against carbon caps in Europe or in other developed nations under the clean-development mechanism of the Kyoto Protocol on global warming.
But, under current regulation, those credits can't be traded domestically and have to be matched with a specific project abroad. They can be traded later in secondary markets overseas.
Mr. Harry said that under the agreement, BlueNext will have access to a database from China Beijing Environmental Exchange of potential projects that could generate carbon credits for investors.
In a statement, China Beijing Environmental Exchange said the alliance would open up access to more buyers for the projects.
So far China has relied on regulations rather than markets to curb pollution. But many are betting that China will loosen regulations and allow some forms of emissions trading. Last year, three cities -- Shanghai, Beijing and Tianjin -- launched emissions exchanges. One of China's biggest companies, state-owned China National Petroleum Corp., or CNPC, has joined with the Chicago Climate Exchange, owned by Climate Exchange PLC, to set up the Tianjin Climate Exchange.
With has no national emissions caps, China is the world's leading source of global-warming greenhouse gases and has been the source of more than 80% of the carbon credits traded globally. The process to create credits from Chinese projects, however, has come under criticism amid allegations that many of the projects don't meet the goals of the Kyoto agreement of reducing global warming gasses.
BlueNext is owned by NYSE Euronext and French state-owned Caisse des Dépóts et Consignations. China-Beijing Environmental Exchange was set up by the Beijing municipal government.
Write to Shai Oster at shai.oster@wsj.com
Thursday, 18 June 2009
Seoul’s ‘green growth’ initiative gets JPM boost
By Song Jung-a in Seoul
Published: June 17 2009 17:02
JP Morgan Asset Management plans to raise $1bn to invest in South Korea’s “green growth” industries such as renewable energy, becoming the first foreign group to invest in Seoul’s green initiative.
Lee Youn-ho, Seoul’s minister of Knowledge and Economy, signed a letter of intent in Washington with William Daley, vice chairman of JPMorgan Chase, the Korean government said.
JP Morgan plans to raise 60-70 per cent of the funds from local investors in Korea while the rest would come from international investors or the US asset manager itself.
The funds are expected to be invested in eco-friendly projects such as developing renewable energy including solar and wind power, carbon credit-trading, making hybrid cars and biofuels.
The deal came as Lee Myung-bak, South Korea’s President, visited Washington for a summit with Barack Obama. Mr Lee has been campaigning for the so-called Green New Deal to create future growth drivers and new jobs in an effort to ride out the economic slump.
Seoul plans to invest about Won12,000bn by 2013 in the development of “green” technology to reduce carbon emissions and boost energy efficiency. The bulk of the investment will be spent on developing environment-friendly products such as personal computers and television sets that use less power and emit less carbon dioxide.
The government expects more foreign investments in “green growth” projects as it plans to increase cash incentives for foreign investors in such industries as alternative energy, robot technology and heath-care services.
South Korea’s sales of green technologies are expected to increase from $43bn in 2007 to $150bn by 2012, according to government data.
LG Chem, a leading chemicals maker, has started building a plant to supply batteries for General Motors’s electric cars while LG Display plans to spend Won50bn on developing solar cells.
Copyright The Financial Times Limited 2009
Published: June 17 2009 17:02
JP Morgan Asset Management plans to raise $1bn to invest in South Korea’s “green growth” industries such as renewable energy, becoming the first foreign group to invest in Seoul’s green initiative.
Lee Youn-ho, Seoul’s minister of Knowledge and Economy, signed a letter of intent in Washington with William Daley, vice chairman of JPMorgan Chase, the Korean government said.
JP Morgan plans to raise 60-70 per cent of the funds from local investors in Korea while the rest would come from international investors or the US asset manager itself.
The funds are expected to be invested in eco-friendly projects such as developing renewable energy including solar and wind power, carbon credit-trading, making hybrid cars and biofuels.
The deal came as Lee Myung-bak, South Korea’s President, visited Washington for a summit with Barack Obama. Mr Lee has been campaigning for the so-called Green New Deal to create future growth drivers and new jobs in an effort to ride out the economic slump.
Seoul plans to invest about Won12,000bn by 2013 in the development of “green” technology to reduce carbon emissions and boost energy efficiency. The bulk of the investment will be spent on developing environment-friendly products such as personal computers and television sets that use less power and emit less carbon dioxide.
The government expects more foreign investments in “green growth” projects as it plans to increase cash incentives for foreign investors in such industries as alternative energy, robot technology and heath-care services.
South Korea’s sales of green technologies are expected to increase from $43bn in 2007 to $150bn by 2012, according to government data.
LG Chem, a leading chemicals maker, has started building a plant to supply batteries for General Motors’s electric cars while LG Display plans to spend Won50bn on developing solar cells.
Copyright The Financial Times Limited 2009
Miliband pushes subsidy for clean coal plants
By Ed Crooks, Energy Editor
Published: June 18 2009 02:51
“Clean coal” power stations will be paid a guaranteed price for the carbon dioxide that they store, funded by a levy on electricity users, under plans the government set out on Wednesday.
That levy, expected to rise to 2 per cent of electricity bills – about £8 ($13) per year – by 2020, was described by one industry executive as “instituting a carbon tax”.
In a consultation paper on Wednesday, the department of energy and climate change confirmed its plan to support up to four pilot coal-fired plants that can capture and store their carbon dioxide emissions.
It also published a study suggesting that clean coal technology could support 30,000-60,000 jobs in Britain by 2030, serving domestic and international markets.
Ed Miliband, the energy secretary, said it was “important to get on with it and move forward as quickly as possible on carbon capture and storage.”
He argued that pressing ahead with clean coal would secure energy supplies while cutting greenhouse gas emissions, create a “big industrial opportunity”, and show other countries, such as China, how their emissions could be cut.
The government wants the financial support in place next year, and the first plant running by 2014.
To encourage companies to invest in untried and uncommercial clean coal plants, Mr Miliband has promised a subsidy on top of the support provided by the European Union’s emissions trading scheme.
The price of emissions in the scheme has been volatile and industry has argued that it does not provide enough certainty to invest in expensive technology. The government’s favoured solution is to guarantee a price for all emissions that are prevented by the pilot clean coal plants.
The proposals were welcomed by the industry, which had been growing impatient over the lack of clarity in the government’s stance on coal.
However, The Association of Electricity Producers, the industry group, highlighted the risk that old coal-fired plants could be forced to shut down.
New coal-fired power stations will be given consent only if they include carbon capture on at least 300 megawatts of their output, and will be forced to fit carbon capture within five years of the technology being proven, which the government expects to be in 2020.
The consultation paper suggested that old coal plants could also be forced to retro-fit with carbon capture equipment.
Copyright The Financial Times Limited 2009
Published: June 18 2009 02:51
“Clean coal” power stations will be paid a guaranteed price for the carbon dioxide that they store, funded by a levy on electricity users, under plans the government set out on Wednesday.
That levy, expected to rise to 2 per cent of electricity bills – about £8 ($13) per year – by 2020, was described by one industry executive as “instituting a carbon tax”.
In a consultation paper on Wednesday, the department of energy and climate change confirmed its plan to support up to four pilot coal-fired plants that can capture and store their carbon dioxide emissions.
It also published a study suggesting that clean coal technology could support 30,000-60,000 jobs in Britain by 2030, serving domestic and international markets.
Ed Miliband, the energy secretary, said it was “important to get on with it and move forward as quickly as possible on carbon capture and storage.”
He argued that pressing ahead with clean coal would secure energy supplies while cutting greenhouse gas emissions, create a “big industrial opportunity”, and show other countries, such as China, how their emissions could be cut.
The government wants the financial support in place next year, and the first plant running by 2014.
To encourage companies to invest in untried and uncommercial clean coal plants, Mr Miliband has promised a subsidy on top of the support provided by the European Union’s emissions trading scheme.
The price of emissions in the scheme has been volatile and industry has argued that it does not provide enough certainty to invest in expensive technology. The government’s favoured solution is to guarantee a price for all emissions that are prevented by the pilot clean coal plants.
The proposals were welcomed by the industry, which had been growing impatient over the lack of clarity in the government’s stance on coal.
However, The Association of Electricity Producers, the industry group, highlighted the risk that old coal-fired plants could be forced to shut down.
New coal-fired power stations will be given consent only if they include carbon capture on at least 300 megawatts of their output, and will be forced to fit carbon capture within five years of the technology being proven, which the government expects to be in 2020.
The consultation paper suggested that old coal plants could also be forced to retro-fit with carbon capture equipment.
Copyright The Financial Times Limited 2009
Carbon capture plans threaten shutdown of all UK coal-fired power stations
Radical proposals to require existing plants, including Drax, to fit the technology would force their closure, government admits
Tim Webb and Terry Macalister
guardian.co.uk, Wednesday 17 June 2009 18.54 BST
All of Britain's coal-fired power stations, including Drax, the country's largest emitter of carbon, could be forced to close down under radical plans unveiled by government today.
Ed Miliband, the energy secretary, is proposing to extend his plans to force companies to fit carbon capture and storage technology (CCS) onto new coal plants – as revealed by the Guardian – to cover a dozen existing coal plants.
The consultation published by his Department of Energy and Climate Change (DECC) conceded that if this happened "we could expect them to close".
A spokeswoman said that no decision had yet been made. The government could instead decide to allow coal plants still open in 2020 to operate for a limited period or to keep them in reserve to stop the lights going out.
A spokesman for a company operating several coal plants in the UK said that even if Miliband did not carry out his threat and force existing coal plants to fit expensive CCS equipment, any further restrictions on their operation would be likely to result in their closure. It will probably prove too difficult and expensive to fit CCS to plants nearing the end of their lifespan.
Drax is the UK's newest and biggest coal-fired station. The Yorkshire plant, which provides about 8 per cent of Britain's electricity, is technically able to continue to operate into the 2030s. But since it is 40 miles from the coast, transporting captured carbon for storage in the North Sea would be particularly difficult.
Dorothy Thompson, chief executive of Drax, accepted that the plant might eventually need to fit CCS but did not say when this would be feasible or economic.
David Porter, head of trade body the Association of Electricity Producers, said he welcomed CCS as a way of making coal plants environmentally acceptable, but said existing stations which could not fit the equipment should not be forced to close. "There are already quite enough coal-fired plants coming off the system. Security of supply should be taken seriously," he warned.
The Guardian has also learnt that E.ON's controversial plans to build a new coal-fired station in Kingsnorth – the first in the UK for more than 20 years – are likely to be delayed by several years at least. It would represent a temporary victory for environmental campaigners, who staged last summer's climate camp near the Kent site. The Kingsnorth plans could be scrapped altogether.
E.ON has entered the new station into a government competition to build the first commercial-scale CCS demonstration project. DECC has now admitted that the decision to pick a winner has been delayed and will not take place until the autumn of 2010 at the earliest. Miliband reiterated the government's ambition to have the winning project operational in 2014.
E.ON is becoming increasingly concerned about the tight schedule of four years to build its first highly efficient coal plant in the UK which is also equipped with experimental CCS technology. The delay in the competition could favour Scottish Power's entry at Longannet, which involves attaching CCS to an existing coal station.
Miliband told the Guardian that the short space of time for E.ON to build a new plant was "one of the factors" which would influence the decision but declined to comment further.
Paul Golby, E.ON's chief executive, has admitted the firm would not build Kingsnorth if it did not win the competition. Under Miliband's plans announced in April, all new coal plants must fit CCS to part of the operation. Golby said it would not be economic to do this without government subsidies and added that E.ON could build a gas plant instead.
John Sauven, executive director of Greenpeace UK, urged the government to make all existing coal plants fit CCS: "If we fail to act, Drax will remain one of the largest sources of carbon dioxide in the world for decades," he said. "The government's own advisors on climate change have stated that all emissions from coal must cease by the early 2020s.
"That's all coal, not just new coal, so it's vital that Ed Miliband's new policy doesn't ignore the inconvenient truth that we need to deal with the reality of Drax every bit as urgently as the threat of Kingsnorth."
Tim Webb and Terry Macalister
guardian.co.uk, Wednesday 17 June 2009 18.54 BST
All of Britain's coal-fired power stations, including Drax, the country's largest emitter of carbon, could be forced to close down under radical plans unveiled by government today.
Ed Miliband, the energy secretary, is proposing to extend his plans to force companies to fit carbon capture and storage technology (CCS) onto new coal plants – as revealed by the Guardian – to cover a dozen existing coal plants.
The consultation published by his Department of Energy and Climate Change (DECC) conceded that if this happened "we could expect them to close".
A spokeswoman said that no decision had yet been made. The government could instead decide to allow coal plants still open in 2020 to operate for a limited period or to keep them in reserve to stop the lights going out.
A spokesman for a company operating several coal plants in the UK said that even if Miliband did not carry out his threat and force existing coal plants to fit expensive CCS equipment, any further restrictions on their operation would be likely to result in their closure. It will probably prove too difficult and expensive to fit CCS to plants nearing the end of their lifespan.
Drax is the UK's newest and biggest coal-fired station. The Yorkshire plant, which provides about 8 per cent of Britain's electricity, is technically able to continue to operate into the 2030s. But since it is 40 miles from the coast, transporting captured carbon for storage in the North Sea would be particularly difficult.
Dorothy Thompson, chief executive of Drax, accepted that the plant might eventually need to fit CCS but did not say when this would be feasible or economic.
David Porter, head of trade body the Association of Electricity Producers, said he welcomed CCS as a way of making coal plants environmentally acceptable, but said existing stations which could not fit the equipment should not be forced to close. "There are already quite enough coal-fired plants coming off the system. Security of supply should be taken seriously," he warned.
The Guardian has also learnt that E.ON's controversial plans to build a new coal-fired station in Kingsnorth – the first in the UK for more than 20 years – are likely to be delayed by several years at least. It would represent a temporary victory for environmental campaigners, who staged last summer's climate camp near the Kent site. The Kingsnorth plans could be scrapped altogether.
E.ON has entered the new station into a government competition to build the first commercial-scale CCS demonstration project. DECC has now admitted that the decision to pick a winner has been delayed and will not take place until the autumn of 2010 at the earliest. Miliband reiterated the government's ambition to have the winning project operational in 2014.
E.ON is becoming increasingly concerned about the tight schedule of four years to build its first highly efficient coal plant in the UK which is also equipped with experimental CCS technology. The delay in the competition could favour Scottish Power's entry at Longannet, which involves attaching CCS to an existing coal station.
Miliband told the Guardian that the short space of time for E.ON to build a new plant was "one of the factors" which would influence the decision but declined to comment further.
Paul Golby, E.ON's chief executive, has admitted the firm would not build Kingsnorth if it did not win the competition. Under Miliband's plans announced in April, all new coal plants must fit CCS to part of the operation. Golby said it would not be economic to do this without government subsidies and added that E.ON could build a gas plant instead.
John Sauven, executive director of Greenpeace UK, urged the government to make all existing coal plants fit CCS: "If we fail to act, Drax will remain one of the largest sources of carbon dioxide in the world for decades," he said. "The government's own advisors on climate change have stated that all emissions from coal must cease by the early 2020s.
"That's all coal, not just new coal, so it's vital that Ed Miliband's new policy doesn't ignore the inconvenient truth that we need to deal with the reality of Drax every bit as urgently as the threat of Kingsnorth."
'60,000 new jobs' in cleaner coal power
Published Date: 18 June 2009
By Jenny Haworth
EFFORTS to make coal-fired power stations cleaner could support tens of thousands of jobs, Energy Secretary Ed Miliband said yesterday.
Research for the government suggests technology to reduce carbon emissions from coal-fired plants could sustain between 30,000 to 60,000 jobs and bring in up to £4 billion a year by 2030.Mr Miliband unveiled the research by AEA Group on the same day he launched a consultation into plans to develop technology to capture and store carbon dioxide emissions from power stations in the UK.The consultation spelt out proposals he first he first outlined in April, to develop the clean coal technology, known as carbon capture and storage (CCS). When fully operating, carbon-capture technology is expected to reduce emissions from power plants by up to 90 per cent.The plans would see up to four new coal-fired power plants part fitted with CCS.Only new coal stations that demonstrated the technology on a section of the plant from day one will be given the go-ahead, under the plansAnd the entire power station will have to be "retrofitted" with CCS technology within five years of it being proven. Mr Miliband said the need for CCS was "incredibly urgent" in order to tackle climate change
Tax on electricity to fund carbon capture plan
Capturing carbon emitted by coal power stations and storing it underground should be paid for through a tax on electricity prices, the Government has said.
By Rowena MasonPublished: 9:19PM BST 17 Jun 2009
Ed Miliband, the energy secretary, said four new "carbon capture and storage" trials would eventually add 2pc to bills through a levy on electricity suppliers – the day after the Government announced a tax on fixed telephone lines to fund high-speed broadband.
It is too early to estimate the total cost of the project, he added, but the Government hopes it could create 60,000 jobs and boost the economy by £4bn. Analysts predicted that the scheme might cost between £750m and £6bn, with some funding potentially from the European Union.
Four energy companies, BP Alternative, E.On, Peel Power and Scottish Power, are competing for contracts to build trial plants, using £90m allocated in the Budget to fund research.
Ian Parrett, an analyst at Inenco, said capturing carbon "had to be done" and could help lead a revival of the British coal industry.
"But we have concerns that no one knows whether carbon capture is commercially viable," he said. "And the Government isn't putting any money in at all. If all emissions reduction schemes add 2pc to bills, we are talking about electricity costs being hugely higher."
The Government is also forming a contingency plan for reducing emissions from coal-powered plants, since the technology behind transporting and burying carbon is not yet proven.
Simon Hughes, the Liberal Democrat shadow energy secretary, described the plans to build more coal power stations before it is known whether the technology works as "a huge gamble".
By Rowena MasonPublished: 9:19PM BST 17 Jun 2009
Ed Miliband, the energy secretary, said four new "carbon capture and storage" trials would eventually add 2pc to bills through a levy on electricity suppliers – the day after the Government announced a tax on fixed telephone lines to fund high-speed broadband.
It is too early to estimate the total cost of the project, he added, but the Government hopes it could create 60,000 jobs and boost the economy by £4bn. Analysts predicted that the scheme might cost between £750m and £6bn, with some funding potentially from the European Union.
Four energy companies, BP Alternative, E.On, Peel Power and Scottish Power, are competing for contracts to build trial plants, using £90m allocated in the Budget to fund research.
Ian Parrett, an analyst at Inenco, said capturing carbon "had to be done" and could help lead a revival of the British coal industry.
"But we have concerns that no one knows whether carbon capture is commercially viable," he said. "And the Government isn't putting any money in at all. If all emissions reduction schemes add 2pc to bills, we are talking about electricity costs being hugely higher."
The Government is also forming a contingency plan for reducing emissions from coal-powered plants, since the technology behind transporting and burying carbon is not yet proven.
Simon Hughes, the Liberal Democrat shadow energy secretary, described the plans to build more coal power stations before it is known whether the technology works as "a huge gamble".
Climate Fight Heads for New Round
The argument over whether climate change is a real problem is largely settled in Washington.
What to do about climate change? That debate is at a boil.
Under a bill being considered in the House of Representatives, companies that generate greenhouse gases -- and their customers -- could face steadily escalating costs for using fossil fuels. But businesses could keep those costs in check by investing in technology to change their carbon-dioxide-spewing ways. The legislation would require companies to obtain permits to emit polluting greenhouse gases, and the total number of permits available in the U.S. would be capped. If new technology or efficiencies lower their emissions, businesses could sell excess permits to other companies.
Europe has been using this approach, dubbed "cap and trade," for several years. But it is far from clear whether the system will win over U.S. lawmakers. One reason is that some political leaders are listening to the kind of doubts about the effectiveness of a cap-and-trade system put forward by a number of prominent thinkers on environmental issues.
Some of them assert that Europe's experience with cap and trade shows that the system on its own has a negligible impact on pollution. It would make more sense, they say, to spend money on developing clean-energy technology. Others say the focus on cap and trade has diverted attention from the need for better strategies to reduce energy use.
Bjorn Lomborg, a Danish business school professor and author, has won over many Republicans, and alienated many Democrats and environmentalists, by arguing that a cap-and-trade system rigorous enough to make a serious dent in fossil-fuel consumption isn't politically feasible.
No matter how high oil prices rise, businesses and consumers will use fuel at roughly the same rate they do now, he says, because they have little alternative.
For proof, he says, look at last summer's sharp run-up in oil prices. Demand for oil fell, but only by a little, he says, during a break from meetings with lawmakers -- mostly Republicans -- on Capitol Hill. "We are price-inelastic" when it comes to energy.
Mr. Lomborg's numerous critics challenge his grasp of climate science. They also take issue with his view that governments should invest heavily in research on alternative technology instead of spending heavily to slash greenhouse-gas output in the short term.
Mr. Lomborg says governments should commit to spending 0.05% of gross domestic product on clean-energy research, financed by a $7 a ton tax on carbon dioxide. That could address what he calls a "market failure" in the development of solar-power systems and wind turbines effective enough and cheap enough to compete with fossil fuels. Buying what he sees as today's premature renewable-energy technology "would be like putting an inefficient [computer] on everyone's desk in 1965."
The House measure, known as the Waxman-Markey bill, would provide a total of $20 billion for clean energy research and development through 2025, a spokeswoman for the Energy and Commerce Committee says.
David MacKay, a Cambridge University physics professor, shares Mr. Lomborg's skepticism of cap and trade, but says industrialized nations need to make massive investments in clean energy using technology already available, from wind power to nuclear plants.
In a 2008 book, Prof. MacKay dismisses what he calls the "codswallop" in the energy debate, such as government campaigns to get citizens to turn off their cellphone chargers. In face of the enormous challenges posed by global warming, he says, such small changes amount to "a feeble gesture, like bailing the Titanic with a teaspoon."
Instead, he says, industrial economies need to think big about energy alternatives. To wean the U.S. economy off oil or coal, he says, will require "a California's worth of wind farms, an Arizona's worth of solar" and a lot of nuclear plants, he says. Shifting the energy mix this way will require big investments, he says, and a price tag on carbon emissions of about $85 a ton. That is far more than currently contemplated under the proposed U.S. or existing European cap-and-trade systems.
"Cap and trade," he says, "is acceptable because it achieves so little."
Hal Harvey, chief executive of ClimateWorks Foundation, a network of environmental groups, supports the House climate bill, but says the first priority in Congress should be to emphasize efforts that scale back U.S. energy consumption.
"There are a small number of policies that make a huge difference," he says. Among them: Pushing for "best practices" -- tougher efficiency and conservation standards -- in areas like vehicle fuel efficiency and energy consumption in buildings.
"The lowly building code" can be used to cut energy consumption by as much as 75%, he says. The burst of effort to ratchet up energy efficiency in the U.S. after the oil shocks of the 1970s led to significant declines in energy consumption and tilted the balance of power away from oil and energy producers toward consumers -- lowering energy costs for individuals, Mr. Harvey says.
Mr. Harvey worries that proposed emissions limits and efficiency standards that are currently part of the House bill could be watered down. Without those requirements to motivate changes in the way businesses and households consume energy, he says, "you have labored mightily and produced a mouse."
Write to Joseph B. White at joseph.white@wsj.com
The House measure, known as the Waxman-Markey bill, would provide a total of $20 billion for clean energy research and development through 2025, a spokeswoman for the Energy and Commerce Committee says.
David MacKay, a Cambridge University physics professor, shares Mr. Lomborg's skepticism of cap and trade, but says industrialized nations need to make massive investments in clean energy using technology already available, from wind power to nuclear plants.
In a 2008 book, Prof. MacKay dismisses what he calls the "codswallop" in the energy debate, such as government campaigns to get citizens to turn off their cellphone chargers. In face of the enormous challenges posed by global warming, he says, such small changes amount to "a feeble gesture, like bailing the Titanic with a teaspoon."
Instead, he says, industrial economies need to think big about energy alternatives. To wean the U.S. economy off oil or coal, he says, will require "a California's worth of wind farms, an Arizona's worth of solar" and a lot of nuclear plants, he says. Shifting the energy mix this way will require big investments, he says, and a price tag on carbon emissions of about $85 a ton. That is far more than currently contemplated under the proposed U.S. or existing European cap-and-trade systems.
"Cap and trade," he says, "is acceptable because it achieves so little."
Hal Harvey, chief executive of ClimateWorks Foundation, a network of environmental groups, supports the House climate bill, but says the first priority in Congress should be to emphasize efforts that scale back U.S. energy consumption.
"There are a small number of policies that make a huge difference," he says. Among them: Pushing for "best practices" -- tougher efficiency and conservation standards -- in areas like vehicle fuel efficiency and energy consumption in buildings.
"The lowly building code" can be used to cut energy consumption by as much as 75%, he says. The burst of effort to ratchet up energy efficiency in the U.S. after the oil shocks of the 1970s led to significant declines in energy consumption and tilted the balance of power away from oil and energy producers toward consumers -- lowering energy costs for individuals, Mr. Harvey says.
Mr. Harvey worries that proposed emissions limits and efficiency standards that are currently part of the House bill could be watered down. Without those requirements to motivate changes in the way businesses and households consume energy, he says, "you have labored mightily and produced a mouse."
Write to Joseph B. White at joseph.white@wsj.com
ADB to double clean energy funding
By Roel Landingin in Manila
Published: June 17 2009 11:21
The Asian Development Bank announced on Wednesday that it would double its target for clean energy investments to $2bn a year by 2013, as it warned that climate change could offset the gains from Asia’s rapid growth in the last few decades.
Rapid economic growth in China and other countries tripled the region’s share of energy-related greenhouse gases in the last three decades, and Asia now accounts for a third of global emissions. This is seen to climb to 40 per cent by 2030, making Asia “the main driver of climate change,” according to Haruhiko Kuroda, the ADB president.
The ADB estimates that the region needs $240bn in the next ten years for developing alternative sources of power such as solar and wind, as well as projects that maximise energy use to significantly cut the growth in carbon and greenhouse gas emissions.
It warned on Wednesday that without these investment, climate change could offset the gains from Asia’s rapid growth and development in the last few decades. An ADB study estimated that four of southeast Asia’s biggest nations – Indonesia, the Philippines, Thailand and Vietnam – would suffer annual losses equivalent to 6.7 per cent of their gross domestic product. This would be more than twice the global average of 2.6 per cent.
ADB’s target investment is just a tenth of what the region needs, underscoring the bigger role that private investments must play, according to Mr Kuroda. “We expect that this contribution will catalyse significant additional resources from the private sector, carbon markets and other sources,” he said at the end of a two-day conference on climate change.
But the added impact of ADB’s new target investments in clean energy could be more modest than it would appear because the bank already lends much more than the $1bn target set four years ago. Last year, the bank provided almost $1.7bn for projects with clean energy components.
ADB’s clean energy investments last year helped finance such projects as a 45-MW wind power plant in Inner Mongolia, technical assistance to improve the rapid mass transport system in Lahore and a loan that helped American investors acquire and rehabilitate a 600-MW coal-fired power plant that was privatised by the government in the Philippines.
The bank’s loans for coal-fired power plants have attracted criticisms from environmental groups who dismiss the ADB’s clean energy initiatives as mere “climate change rhetoric.”
Greenpeace activists dressed as aliens from outer space staged a picket in front of the ADB on Monday to protest the bank’s “continued support for energy intensive, dirty and destructive projects such as coal, large hydropower and road projects promoting the expansion of fossil fuel private transport.”
Copyright The Financial Times Limited 2009
Published: June 17 2009 11:21
The Asian Development Bank announced on Wednesday that it would double its target for clean energy investments to $2bn a year by 2013, as it warned that climate change could offset the gains from Asia’s rapid growth in the last few decades.
Rapid economic growth in China and other countries tripled the region’s share of energy-related greenhouse gases in the last three decades, and Asia now accounts for a third of global emissions. This is seen to climb to 40 per cent by 2030, making Asia “the main driver of climate change,” according to Haruhiko Kuroda, the ADB president.
The ADB estimates that the region needs $240bn in the next ten years for developing alternative sources of power such as solar and wind, as well as projects that maximise energy use to significantly cut the growth in carbon and greenhouse gas emissions.
It warned on Wednesday that without these investment, climate change could offset the gains from Asia’s rapid growth and development in the last few decades. An ADB study estimated that four of southeast Asia’s biggest nations – Indonesia, the Philippines, Thailand and Vietnam – would suffer annual losses equivalent to 6.7 per cent of their gross domestic product. This would be more than twice the global average of 2.6 per cent.
ADB’s target investment is just a tenth of what the region needs, underscoring the bigger role that private investments must play, according to Mr Kuroda. “We expect that this contribution will catalyse significant additional resources from the private sector, carbon markets and other sources,” he said at the end of a two-day conference on climate change.
But the added impact of ADB’s new target investments in clean energy could be more modest than it would appear because the bank already lends much more than the $1bn target set four years ago. Last year, the bank provided almost $1.7bn for projects with clean energy components.
ADB’s clean energy investments last year helped finance such projects as a 45-MW wind power plant in Inner Mongolia, technical assistance to improve the rapid mass transport system in Lahore and a loan that helped American investors acquire and rehabilitate a 600-MW coal-fired power plant that was privatised by the government in the Philippines.
The bank’s loans for coal-fired power plants have attracted criticisms from environmental groups who dismiss the ADB’s clean energy initiatives as mere “climate change rhetoric.”
Greenpeace activists dressed as aliens from outer space staged a picket in front of the ADB on Monday to protest the bank’s “continued support for energy intensive, dirty and destructive projects such as coal, large hydropower and road projects promoting the expansion of fossil fuel private transport.”
Copyright The Financial Times Limited 2009
Hot tub technology
New research suggests the simple immersion heater could be key to a renewable electricity solution
David Strahan
guardian.co.uk, Wednesday 17 June 2009 22.00 BST
Forget expensive high-tech silver bullets such as nuclear fusion and carbon capture and storage; the solution to climate change lies in the humble electric immersion heater that sits in the hot water tank under your stairs. That's the view of Dr Mark Barrett, senior researcher at the UCL Energy Institute, who will present his analysis at a meeting in the House of Commonson 18 June .
A tank with an immersion heater may be just an oversized kettle, but there are thought to be around 19m in Britain's homes, which collectively have the capacity to store huge amounts of energy as hot water. And this could be key to achieving an almost wholly renewable electricity supply.
Dr Barrett says the heaters could be switched on and off rapidly to compensate for the erratic output of wind turbines and solar panels, each heater controlled by a gadget that responds to signals sent through the electricity grid – a system used since the second world war. "Everybody is always looking for a shiny new silver-bullet solution" says Dr Barrett, "but this idea is cheap, safe, and based on technology that's been around for decades".
Tea-time troubles
Renewables are a problem for the grid, as currently configured, because supply has to match unfettered demand minute-by-minute. In Britain power consumption ranges between about 20GW and 60GW (gigawatts) depending on season and time of day. But unlike coal- and gas-fired power stations, wind turbines and solar panels are "non-dispatchable", meaning they cannot be cranked up at a moment's notice during half-time in the cup final if the nation is gasping for tea. This limits the proportion of renewables that can be absorbed into the grid – although the level of that ceiling is hotly debated.
But renewables are only a problem when demand is taken as the given. If demand could be actively managed as well, a far greater proportion of renewables could be absorbed, slashing carbon emissions and raising energy security. And that's where the immersion heaters come in.
Dr Barrett explains that 19m domestic tanks, each fitted with a standard 3kW (kilowatt) immersion heater, would provide over 55GW of potentially flexible demand, which could be adjusted to suit the output of renewable generators. The immersion controller would ensure the water temperature stays above a set minimum – so the house would never be without a hot shower – but within a range of 45C-65C the grid would be in control. Along with hot-water storage in commercial buildings, this would provide balancing capacity greater than peak consumption today, and is a key feature of the computer model Dr Barrett has devised to investigate how Britain could best achieve a high proportion of renewable power.
The model assumes a massive increase in wind and solar capacity; smaller amounts of wave, tidal and hydro; expanded interconnectors to France; and increased electricity storage such as the Dinorwig pumped storage facility in Wales. Existing fossil fuel stations are "mothballed" for use only as a last resort. Using a range of hourly demand forecasts and weather data, the model has shown Britain could on average generate 95% of its electricity consumption from renewables.
In this system, hot-water storage is crucial for balancing supply and demand: when renewable generation exceeds demand, the surplus is exported to the continent, and used to recharge electrical storage and hot water tanks; when demand exceeds renewable generation, the shortfall is made up by turning off water heaters, drawing on electricity storage and imports, and firing up old fossil fuel stations.
Dr Barrett claims the immersion heaters could be controlled using a system called ripple control, where high-frequency pulses are sent through the mains and received by a device on each water heater that turns power off and on as required. The system has been used for decades in New Zealand, where the grid company can now reduce peak demand by about 13%, and so defer expensive investments in new power stations. In Florida, where the local power company has struggled to cope with demand caused by a 50-year housing boom, 700,000 customers receive a monthly rebate for handing over control of their hot water heaters, and the utility has avoided building a 1GW power station as a result. In South Africa, ripple control is being introduced to prevent a repeat of the rolling blackouts that crippled the country last year.
Peak practice
Experts warn balancing the entire grid in real time is massively more complicated than occasionally reducing peak demand, and question whether ripple control could do the job. Dr Graeme Bathurst, technical director of the Manchester-based grid consultancy TNEI, says that different numbers of water heaters would need to be turned on and off every minute of the day, yet a traditional ripple-control system – which only transmits instructions, and cannot receive information from water tanks – would not know how much flexible capacity was available at any moment, nor how many heaters to control. "There is massive potential in heat storage, and this concept is eminently achievable," says Bathurst, "but I think it will need a more intelligent system to make it work".
Dr Barrett argues that the aggregate heat demand of 20m households would be fairly predictable, but concedes that a modern interactive system would be better. He says it is vital the new "smart meters" the government plans to install in every home by 2020 should be capable of controlling hot-water storage. "But this isn't rocket science," says Dr Barrett. "It is quite clear we can go hell for leather installing renewables because we can deal with intermittency using heat storage."• David Strahan is the author of The Last Oil Shock: A Survival Guide to the Imminent Extinction of Petroleum Man
David Strahan
guardian.co.uk, Wednesday 17 June 2009 22.00 BST
Forget expensive high-tech silver bullets such as nuclear fusion and carbon capture and storage; the solution to climate change lies in the humble electric immersion heater that sits in the hot water tank under your stairs. That's the view of Dr Mark Barrett, senior researcher at the UCL Energy Institute, who will present his analysis at a meeting in the House of Commonson 18 June .
A tank with an immersion heater may be just an oversized kettle, but there are thought to be around 19m in Britain's homes, which collectively have the capacity to store huge amounts of energy as hot water. And this could be key to achieving an almost wholly renewable electricity supply.
Dr Barrett says the heaters could be switched on and off rapidly to compensate for the erratic output of wind turbines and solar panels, each heater controlled by a gadget that responds to signals sent through the electricity grid – a system used since the second world war. "Everybody is always looking for a shiny new silver-bullet solution" says Dr Barrett, "but this idea is cheap, safe, and based on technology that's been around for decades".
Tea-time troubles
Renewables are a problem for the grid, as currently configured, because supply has to match unfettered demand minute-by-minute. In Britain power consumption ranges between about 20GW and 60GW (gigawatts) depending on season and time of day. But unlike coal- and gas-fired power stations, wind turbines and solar panels are "non-dispatchable", meaning they cannot be cranked up at a moment's notice during half-time in the cup final if the nation is gasping for tea. This limits the proportion of renewables that can be absorbed into the grid – although the level of that ceiling is hotly debated.
But renewables are only a problem when demand is taken as the given. If demand could be actively managed as well, a far greater proportion of renewables could be absorbed, slashing carbon emissions and raising energy security. And that's where the immersion heaters come in.
Dr Barrett explains that 19m domestic tanks, each fitted with a standard 3kW (kilowatt) immersion heater, would provide over 55GW of potentially flexible demand, which could be adjusted to suit the output of renewable generators. The immersion controller would ensure the water temperature stays above a set minimum – so the house would never be without a hot shower – but within a range of 45C-65C the grid would be in control. Along with hot-water storage in commercial buildings, this would provide balancing capacity greater than peak consumption today, and is a key feature of the computer model Dr Barrett has devised to investigate how Britain could best achieve a high proportion of renewable power.
The model assumes a massive increase in wind and solar capacity; smaller amounts of wave, tidal and hydro; expanded interconnectors to France; and increased electricity storage such as the Dinorwig pumped storage facility in Wales. Existing fossil fuel stations are "mothballed" for use only as a last resort. Using a range of hourly demand forecasts and weather data, the model has shown Britain could on average generate 95% of its electricity consumption from renewables.
In this system, hot-water storage is crucial for balancing supply and demand: when renewable generation exceeds demand, the surplus is exported to the continent, and used to recharge electrical storage and hot water tanks; when demand exceeds renewable generation, the shortfall is made up by turning off water heaters, drawing on electricity storage and imports, and firing up old fossil fuel stations.
Dr Barrett claims the immersion heaters could be controlled using a system called ripple control, where high-frequency pulses are sent through the mains and received by a device on each water heater that turns power off and on as required. The system has been used for decades in New Zealand, where the grid company can now reduce peak demand by about 13%, and so defer expensive investments in new power stations. In Florida, where the local power company has struggled to cope with demand caused by a 50-year housing boom, 700,000 customers receive a monthly rebate for handing over control of their hot water heaters, and the utility has avoided building a 1GW power station as a result. In South Africa, ripple control is being introduced to prevent a repeat of the rolling blackouts that crippled the country last year.
Peak practice
Experts warn balancing the entire grid in real time is massively more complicated than occasionally reducing peak demand, and question whether ripple control could do the job. Dr Graeme Bathurst, technical director of the Manchester-based grid consultancy TNEI, says that different numbers of water heaters would need to be turned on and off every minute of the day, yet a traditional ripple-control system – which only transmits instructions, and cannot receive information from water tanks – would not know how much flexible capacity was available at any moment, nor how many heaters to control. "There is massive potential in heat storage, and this concept is eminently achievable," says Bathurst, "but I think it will need a more intelligent system to make it work".
Dr Barrett argues that the aggregate heat demand of 20m households would be fairly predictable, but concedes that a modern interactive system would be better. He says it is vital the new "smart meters" the government plans to install in every home by 2020 should be capable of controlling hot-water storage. "But this isn't rocket science," says Dr Barrett. "It is quite clear we can go hell for leather installing renewables because we can deal with intermittency using heat storage."• David Strahan is the author of The Last Oil Shock: A Survival Guide to the Imminent Extinction of Petroleum Man
White issues 'unequivocal' warning on climate change in the US
America is already experiencing the harmful effects of global warming with hotter temperatures, retreating glaciers and rising sea levels, according to the first climate change report from the Barack Obama presidency.
By Tom Leonard in New York Published: 5:11PM BST 17 Jun 2009
The US Global Change Research Programme gave an "unequivocal" warning that climate change will intensify over the next century
In the strongest language ever to come out of the White House on the issue, the US Global Change Research Programme gave an "unequivocal" warning that climate change would intensify over the next century and "challenge the ability of society and natural systems to adapt".
The study's authors, who include the White House science adviser and other senior officials and academics, painted a far more ominous picture of the effects of global warming than has ever come from a US government.
The 200-page study, a climate status report required periodically by Congress, contains some no new research but is far more detailed than the updates put out in the Bush era.
After failing to put out a report since 2000, the Bush administration was forced by legal action from environmental groups to issue a first draft of the report last year which provided the basis for the new one.
Jane Lubchenco, the head of the National Oceanic and Atmospheric Administration, called the report a "game changer".
She said it addressed the historic US "foot-dragging" over an issue that many Americans believed only affected remote parts of the planet.
"This report demonstrates that climate change is happening now, in our own backyard, and it affects the things that people care about," she said.
The issue of water – generally a case of too much in the East and too little in the West – is a dominant theme in the study.
Global warming consequences detailed in the study included an increase in heavy downpours, shorter and warmer winters – more than seven degrees (F) warmer in the Midwest – and declining forest growth in the Southwest.
It concluded that heat-related deaths are likely to increase, with such fatalities in Chicago rising tenfold by the end of the century without a reduction in greenhouse gas emissions.
While warmer winters will benefit farmers by lengthening the growing season, it will also help insects and spreading diseases.
Meanwhile, warmer nights will spell trouble for America's famous maple syrup industry, pushing production north into colder Canada, said the study.
River flows will change and rising sea levels will increase the frequency of airports, roads and tunnels flooding, it said.
The Gulf Coast, where most of the biggest US ports are concentrated, would be particularly at risk.
The report's authors stressed that the chances of preventing such problems would increase if action was taken to slow global warming. Climate-related proposals that would seek to reduce America's enormous carbon footprint are currently before the US Congress.
John Holdren, the White House science adviser, said the study "tells us why remedial action is needed sooner rather than later".
The report compiled years of scientific research from government experts and academics, updating with new data.
By Tom Leonard in New York Published: 5:11PM BST 17 Jun 2009
The US Global Change Research Programme gave an "unequivocal" warning that climate change will intensify over the next century
In the strongest language ever to come out of the White House on the issue, the US Global Change Research Programme gave an "unequivocal" warning that climate change would intensify over the next century and "challenge the ability of society and natural systems to adapt".
The study's authors, who include the White House science adviser and other senior officials and academics, painted a far more ominous picture of the effects of global warming than has ever come from a US government.
The 200-page study, a climate status report required periodically by Congress, contains some no new research but is far more detailed than the updates put out in the Bush era.
After failing to put out a report since 2000, the Bush administration was forced by legal action from environmental groups to issue a first draft of the report last year which provided the basis for the new one.
Jane Lubchenco, the head of the National Oceanic and Atmospheric Administration, called the report a "game changer".
She said it addressed the historic US "foot-dragging" over an issue that many Americans believed only affected remote parts of the planet.
"This report demonstrates that climate change is happening now, in our own backyard, and it affects the things that people care about," she said.
The issue of water – generally a case of too much in the East and too little in the West – is a dominant theme in the study.
Global warming consequences detailed in the study included an increase in heavy downpours, shorter and warmer winters – more than seven degrees (F) warmer in the Midwest – and declining forest growth in the Southwest.
It concluded that heat-related deaths are likely to increase, with such fatalities in Chicago rising tenfold by the end of the century without a reduction in greenhouse gas emissions.
While warmer winters will benefit farmers by lengthening the growing season, it will also help insects and spreading diseases.
Meanwhile, warmer nights will spell trouble for America's famous maple syrup industry, pushing production north into colder Canada, said the study.
River flows will change and rising sea levels will increase the frequency of airports, roads and tunnels flooding, it said.
The Gulf Coast, where most of the biggest US ports are concentrated, would be particularly at risk.
The report's authors stressed that the chances of preventing such problems would increase if action was taken to slow global warming. Climate-related proposals that would seek to reduce America's enormous carbon footprint are currently before the US Congress.
John Holdren, the White House science adviser, said the study "tells us why remedial action is needed sooner rather than later".
The report compiled years of scientific research from government experts and academics, updating with new data.
European Farmers Turn to Biogas Plants
By MATTHEW DALTON
BERGHAREN, the Netherlands -- European governments are quietly transforming the practice of turning manure into energy from a fringe technology into a tool for both slashing greenhouse gases from farms and boosting domestic energy supplies.
Plants that convert manure, corn, grass or organic waste into electricity were historically built by just a few environmentally conscious farmers. But the European Union now counts about 8,000 so-called biogas plants, and -- fueled by rising subsidies -- thousands more are expected to be built during the next decade. Farmers are building plants to make a profit, not to protect the environment.
Farm emissions account for 9% to 10% of the EU's total greenhouse gases -- more than all industrial processes, such as steelmaking and chemical manufacturing, combined, according to the European Environment Agency. Much of the emissions come from two gases produced from livestock manure: methane and nitrous oxide.
Farmers usually spread manure on their fields, where the methane escapes into the atmosphere and the nitrogen forms nitrous oxide. The EU has been able to change the behavior of some industrial and energy polluters through its emission-credit trading plan, but governments have largely avoided politically contentious laws that would force farmers to cut emissions by treating manure.
Experts say biogas plants offer a partial solution to this problem: Farmers can make money for capturing the methane from their manure, while governments get a renewable energy source that achieves substantial greenhouse-gas reductions and helps to reduce the EU's dependence on imported natural gas.
For Pieter Theunissen, the decision to build a biogas plant on his dairy farm in the Netherlands was strictly business. Dairy prices fell following EU farm-subsidy overhauls four years ago, sending him searching for another source of revenue.
Every day since his plant started up in December, Mr. Theunissen feeds 70 metric tons of dairy waste, corn and manure from cattle, chicken and pigs into a giant tank. The smelly mixture is stirred for several months to release as much methane as possible. The methane is captured and burned to power a turbine, producing enough electricity for 1,800 homes.
Promoting biogas is an appealing public-policy option, experts say. "We see these subsidies as worthwhile for society, because biogas is a secure supply, and it's utilizing resources that would have a negative impact on water quality and the climate," said Jens Bo Holm-Nielsen, head of the Center for Bioenergy and Green Engineering at Aalborg University in Denmark.
Write to Matthew Dalton at Matthew.Dalton@dowjones.com
BERGHAREN, the Netherlands -- European governments are quietly transforming the practice of turning manure into energy from a fringe technology into a tool for both slashing greenhouse gases from farms and boosting domestic energy supplies.
Plants that convert manure, corn, grass or organic waste into electricity were historically built by just a few environmentally conscious farmers. But the European Union now counts about 8,000 so-called biogas plants, and -- fueled by rising subsidies -- thousands more are expected to be built during the next decade. Farmers are building plants to make a profit, not to protect the environment.
Farm emissions account for 9% to 10% of the EU's total greenhouse gases -- more than all industrial processes, such as steelmaking and chemical manufacturing, combined, according to the European Environment Agency. Much of the emissions come from two gases produced from livestock manure: methane and nitrous oxide.
Farmers usually spread manure on their fields, where the methane escapes into the atmosphere and the nitrogen forms nitrous oxide. The EU has been able to change the behavior of some industrial and energy polluters through its emission-credit trading plan, but governments have largely avoided politically contentious laws that would force farmers to cut emissions by treating manure.
Experts say biogas plants offer a partial solution to this problem: Farmers can make money for capturing the methane from their manure, while governments get a renewable energy source that achieves substantial greenhouse-gas reductions and helps to reduce the EU's dependence on imported natural gas.
For Pieter Theunissen, the decision to build a biogas plant on his dairy farm in the Netherlands was strictly business. Dairy prices fell following EU farm-subsidy overhauls four years ago, sending him searching for another source of revenue.
Every day since his plant started up in December, Mr. Theunissen feeds 70 metric tons of dairy waste, corn and manure from cattle, chicken and pigs into a giant tank. The smelly mixture is stirred for several months to release as much methane as possible. The methane is captured and burned to power a turbine, producing enough electricity for 1,800 homes.
Promoting biogas is an appealing public-policy option, experts say. "We see these subsidies as worthwhile for society, because biogas is a secure supply, and it's utilizing resources that would have a negative impact on water quality and the climate," said Jens Bo Holm-Nielsen, head of the Center for Bioenergy and Green Engineering at Aalborg University in Denmark.
Write to Matthew Dalton at Matthew.Dalton@dowjones.com
Green groups see red as BP plans the closure of its alternative energy office
The Times
June 18, 2009
Robin Pagnamenta Energy and Environment Editor
BP is planning to shut the London base of its alternative energy business in a move that provoked fresh anger yesterday from environmental groups.
The oil group leased a 40,000 sq ft office in County Hall, Central London, less than two years ago to house BP Alternative Energy. That office is being wound down and about 80 staff are to move back to BP’s corporate head office in St James’s Square across the Thames.
A BP spokesman confirmed that the move was taking place and said that a restructuring drive had opened up extra space elsewhere.
The decision was criticised by environmental groups, which said that it was another sign that BP’s claim to be moving “Beyond Petroleum”, the initiative introduced in 2000 under Lord Browne of Madingley, the former chief executive, was being ignored.
Charlie Kronick, a spokesman for Greenpeace, said: “Since 2007 they have been selling off and downgrading their alternative energy businesses. It just shows what a con this idea of Beyond Petroleum really is. More and more, BP is showing that it is really only committed to its core business of oil and gas.”
BP insists that it has not wavered in its commitment to lower-carbon energy. In 2005, it set out plans to invest $8 billion in alternatives by 2015 and until recently had been running ahead of schedule. But the rate of investment has fallen: capital expenditure on alternative energy is expected to drop to as low as $500 million (£305 million) this year.
The move from County Hall comes after the departure of Vivienne Cox, BP’s head of alternative energy.
BP Alternative Energy operates a range of businesses, including American wind farms, solar power, biofuels, hydrogen energy and carbon-capture and storage projects. Last year BP invested in Brazilian sugar-cane ethanol, purchasing a 50 per cent stake in Tropical Bioenergia. The two companies will invest $1 billion in two new biofuel plants in Brazil.
Tony Hayward, BP’s chief executive, has questioned the economics of solar energy, claiming that the technology was unlikely ever to be as competitive as fossil fuels.
* The nuclear decommissioning agency finally announced the name of its new chief executive, ending a year-long search for a candidate. Tony Fountain, a former executive from BP, will take up his position overseeing the clean-up of some of the most radioactive sites in Europe, including Sellafield, in October.
June 18, 2009
Robin Pagnamenta Energy and Environment Editor
BP is planning to shut the London base of its alternative energy business in a move that provoked fresh anger yesterday from environmental groups.
The oil group leased a 40,000 sq ft office in County Hall, Central London, less than two years ago to house BP Alternative Energy. That office is being wound down and about 80 staff are to move back to BP’s corporate head office in St James’s Square across the Thames.
A BP spokesman confirmed that the move was taking place and said that a restructuring drive had opened up extra space elsewhere.
The decision was criticised by environmental groups, which said that it was another sign that BP’s claim to be moving “Beyond Petroleum”, the initiative introduced in 2000 under Lord Browne of Madingley, the former chief executive, was being ignored.
Charlie Kronick, a spokesman for Greenpeace, said: “Since 2007 they have been selling off and downgrading their alternative energy businesses. It just shows what a con this idea of Beyond Petroleum really is. More and more, BP is showing that it is really only committed to its core business of oil and gas.”
BP insists that it has not wavered in its commitment to lower-carbon energy. In 2005, it set out plans to invest $8 billion in alternatives by 2015 and until recently had been running ahead of schedule. But the rate of investment has fallen: capital expenditure on alternative energy is expected to drop to as low as $500 million (£305 million) this year.
The move from County Hall comes after the departure of Vivienne Cox, BP’s head of alternative energy.
BP Alternative Energy operates a range of businesses, including American wind farms, solar power, biofuels, hydrogen energy and carbon-capture and storage projects. Last year BP invested in Brazilian sugar-cane ethanol, purchasing a 50 per cent stake in Tropical Bioenergia. The two companies will invest $1 billion in two new biofuel plants in Brazil.
Tony Hayward, BP’s chief executive, has questioned the economics of solar energy, claiming that the technology was unlikely ever to be as competitive as fossil fuels.
* The nuclear decommissioning agency finally announced the name of its new chief executive, ending a year-long search for a candidate. Tony Fountain, a former executive from BP, will take up his position overseeing the clean-up of some of the most radioactive sites in Europe, including Sellafield, in October.
Multinationals eye up lithium reserves beneath Bolivia's salt flats
Metal deposits may be key to green car revolution but government in La Paz yet to agree deal
Rory Carroll and Andres Schipani in Salar de Uyuni
guardian.co.uk, Wednesday 17 June 2009 19.26 BST
Stand in the middle of Salar de Uyuni, the world's greatest salt desert, and the first word that springs to mind is nothing. As far as the eye can see, nothing. Not a shrub or tree, not a hill or valley, just an endless expanse of white.
This salt flat in Bolivia, the landlocked heart of South America, is a harsh and eerie landscape, perhaps the closest thing nature has to a void. From the Incas to the present day, humanity has made little impression here.
But that may be about to change. Dig down and you find brine – water saturated with salt – rich in deposits of lithium, the lightest metal.
As the invention of the pneumatic tyre turned rubber into a precious commodity in the 19th century, the world's tilt towards greener energy is expected to do the same for lithium in the 21st. For years, tiny amounts have been used in laptops, BlackBerrys and other devices, but now its main use is expected to be in batteries for electric cars, which campaigners, manufacturers and governments say will – or should – replace petrol and diesel vehicles.
For Bolivia, this is good news. It is thought to possess 5.4m tonnes of lithium, half the world's supply. "Lithium is very important for us and the world," Bolivia's mining and metallurgy minister, Luis Alberto Echazú, said. "We hope to extract 1,200 tonnes next year and that's just the beginning. When we're up and running we'll be producing 10, 15 times that."
Four wells have been dug in Salar de Uyuni and a state-run pilot plant is being built near the village of Rio Grande on the fringe of the desert.
But there is a problem. Bolivia's socialist government has a habit of clashing with foreign multinationals in other sectors and has not clinched a deal – and, according to some, may never seal one – with the investors needed to extract significant quantities of lithium.
Foreign companies are afraid to deal with a government that confiscates assets and rips up contracts, said Carlos Alberto López, a former energy minister and consultant with Cambridge Energy Research Associates. "Bolivia's ideological face does not square with business and commercial realities. I doubt lithium's potential will be realised in the short or medium term." Pessimists fear a fiasco: carmakers lacking batteries to power electric vehicles and Bolivia, one of the continent's poorest countries, losing an opportunity to develop. President Evo Morales, a former llama herder and trade union leader, has a different fear: that western multinationals will suck the wealth of Salar de Uyuni like capitalist vampires. Morales swept to power in 2005 promising to end 500 years of plunder. Lithium is a test case. "The government of Bolivia will never give away control of this natural resource," he said. He acknowledges, however, that a foreign partner is needed.
The government is talking to France's Bollore Group, South Korea's LG Group and Japan's Sumitomo and Mitsubishi. Bollore has been asked to join the government's scientific commission on lithium, suggesting it has the edge.
The government said it would choose as a partner the company which will help Bolivian industry and not just mining. The idea is to process and add value to the lithium after it is extracted, for instance by making batteries or even fleets of electric cars in the impoverished country. The $6m (£3.6m) state-run pilot plant near Rio Grande is the first step. At the end of a dirt track dozens of workers are building barracks to house technicians and miners. Over a generator's hum Marcelo Castro, 48, the site manager, exuded patriotic pride. "We are building everything from scratch. This is a historic moment. We are working for ourselves." Rich countries would no longer plunder Bolivia's resources. "There is a new dialectic."
Sceptics say that is delirium. Work at the pilot plant has proved slow, talks with multinationals remain inconclusive and there is no production timetable.
The 2006 nationalisation of the oil and gas industry is a troubling precedent. Foreign investment evaporated, production fell and the state-owned energy company, YPFB, became mired in corruption. "The trustworthiness of the Bolivian state has come into question," said López, "and I don't think investors will expose themselves to being hammered on the head."
Time will tell. With a lithium shortage forecast for 2015, Bolivia may also have the upper hand. "We have had bad experiences in the past," said Paulino Colque, leader of an indigenous workers' group Uyuni. "If there are any investors that want to come, they can come – but as partners, not patrons."
Running on lithium
Lithium ion batteries, first proposed in the 1970s but not commercialised until 20 years later, are the technology most likely in the short-term to make the clean electricity dream viable. Several times lighter than current rechargeable batteries (usually made from nickel compounds) and with a better performance and longer lifetime, Li-ion cells have already been developed for laptops and mobile phones. Now they face their biggest challenge. For cars, they will have to be more powerful, more reliable and – a big sticking point – far cheaper. Most experimental electric vehicles today use some form of Li-ion batteries and many experts agree the technology is ready for the first generation of electric vehicles. The other big hurdle is size: the batteries are still too big. Alok Jha
Rory Carroll and Andres Schipani in Salar de Uyuni
guardian.co.uk, Wednesday 17 June 2009 19.26 BST
Stand in the middle of Salar de Uyuni, the world's greatest salt desert, and the first word that springs to mind is nothing. As far as the eye can see, nothing. Not a shrub or tree, not a hill or valley, just an endless expanse of white.
This salt flat in Bolivia, the landlocked heart of South America, is a harsh and eerie landscape, perhaps the closest thing nature has to a void. From the Incas to the present day, humanity has made little impression here.
But that may be about to change. Dig down and you find brine – water saturated with salt – rich in deposits of lithium, the lightest metal.
As the invention of the pneumatic tyre turned rubber into a precious commodity in the 19th century, the world's tilt towards greener energy is expected to do the same for lithium in the 21st. For years, tiny amounts have been used in laptops, BlackBerrys and other devices, but now its main use is expected to be in batteries for electric cars, which campaigners, manufacturers and governments say will – or should – replace petrol and diesel vehicles.
For Bolivia, this is good news. It is thought to possess 5.4m tonnes of lithium, half the world's supply. "Lithium is very important for us and the world," Bolivia's mining and metallurgy minister, Luis Alberto Echazú, said. "We hope to extract 1,200 tonnes next year and that's just the beginning. When we're up and running we'll be producing 10, 15 times that."
Four wells have been dug in Salar de Uyuni and a state-run pilot plant is being built near the village of Rio Grande on the fringe of the desert.
But there is a problem. Bolivia's socialist government has a habit of clashing with foreign multinationals in other sectors and has not clinched a deal – and, according to some, may never seal one – with the investors needed to extract significant quantities of lithium.
Foreign companies are afraid to deal with a government that confiscates assets and rips up contracts, said Carlos Alberto López, a former energy minister and consultant with Cambridge Energy Research Associates. "Bolivia's ideological face does not square with business and commercial realities. I doubt lithium's potential will be realised in the short or medium term." Pessimists fear a fiasco: carmakers lacking batteries to power electric vehicles and Bolivia, one of the continent's poorest countries, losing an opportunity to develop. President Evo Morales, a former llama herder and trade union leader, has a different fear: that western multinationals will suck the wealth of Salar de Uyuni like capitalist vampires. Morales swept to power in 2005 promising to end 500 years of plunder. Lithium is a test case. "The government of Bolivia will never give away control of this natural resource," he said. He acknowledges, however, that a foreign partner is needed.
The government is talking to France's Bollore Group, South Korea's LG Group and Japan's Sumitomo and Mitsubishi. Bollore has been asked to join the government's scientific commission on lithium, suggesting it has the edge.
The government said it would choose as a partner the company which will help Bolivian industry and not just mining. The idea is to process and add value to the lithium after it is extracted, for instance by making batteries or even fleets of electric cars in the impoverished country. The $6m (£3.6m) state-run pilot plant near Rio Grande is the first step. At the end of a dirt track dozens of workers are building barracks to house technicians and miners. Over a generator's hum Marcelo Castro, 48, the site manager, exuded patriotic pride. "We are building everything from scratch. This is a historic moment. We are working for ourselves." Rich countries would no longer plunder Bolivia's resources. "There is a new dialectic."
Sceptics say that is delirium. Work at the pilot plant has proved slow, talks with multinationals remain inconclusive and there is no production timetable.
The 2006 nationalisation of the oil and gas industry is a troubling precedent. Foreign investment evaporated, production fell and the state-owned energy company, YPFB, became mired in corruption. "The trustworthiness of the Bolivian state has come into question," said López, "and I don't think investors will expose themselves to being hammered on the head."
Time will tell. With a lithium shortage forecast for 2015, Bolivia may also have the upper hand. "We have had bad experiences in the past," said Paulino Colque, leader of an indigenous workers' group Uyuni. "If there are any investors that want to come, they can come – but as partners, not patrons."
Running on lithium
Lithium ion batteries, first proposed in the 1970s but not commercialised until 20 years later, are the technology most likely in the short-term to make the clean electricity dream viable. Several times lighter than current rechargeable batteries (usually made from nickel compounds) and with a better performance and longer lifetime, Li-ion cells have already been developed for laptops and mobile phones. Now they face their biggest challenge. For cars, they will have to be more powerful, more reliable and – a big sticking point – far cheaper. Most experimental electric vehicles today use some form of Li-ion batteries and many experts agree the technology is ready for the first generation of electric vehicles. The other big hurdle is size: the batteries are still too big. Alok Jha
Talk of 'kinetic energy plates' is a total waste of energy
The emissions saved by driving over plates in a car park amount to just one four-thousandth of the energy used by the trip to the supermarket, writes David MacKay
David MacKay
guardian.co.uk, Wednesday 17 June 2009 11.59 BST
I'd like to suggest a 1% rule for news articles about energy-saving gadgets or renewable energy systems. The rule says: "A gizmo may be discussed only if it could lead to energy savings of at least 1%." I suggest this rule not because minnow-sized savings are worthless, but because the public conversation about energy surely deserves to be focussed on bigger fish.
The latest piece of green twaddle that's wasting people's attention is the story about a supermarket car park that has "kinetic road plates" creating "green energy" from the motion of customers' cars.
I'm not saying that these systems don't actually work; perhaps they do save a little bit of energy that would otherwise be wasted in the brakes of the cars arriving in the car park. But my suggestion is that these systems save so little energy, we shouldn't waste newspaper space on such stories. There must be more important things to discuss (assuming we are serious about getting off fossil fuels).
To prove my point, let's compare the energy that might be saved by the "kinetic road plates" with the total energy used by a typical trip to the supermarket. Let's guess that the kinetic road plates extract one fifth of the kinetic energy of the arriving car. For a car weighing one tonne travelling at 20mph when it hits the road plates, the extracted energy comes to 0.002 kilowatt-hours (kWh). Now, the energy used by the car, assuming it is driven three miles to and three miles from the supermarket with a fuel efficiency of 33 miles per gallon, is about 8 kWh. The savings from parking at the green car park thus amount to one four-thousandth of the energy used by the trip to the supermarket.
That's much less than 1%. So this "green energy system" is just eco-bling, creating a delusion of happy progress while distracting people from serious change.
What are some ideas that satisfy the 1% rule? Well, there's lots of examples: a domestic solar hot-water panel will generate roughly 4 kWh a day of hot water, which is roughly 50% of a typical family's hot water consumption, and a bit more than 1% of their total energy footprint. Example two: wind power – a ten-fold increase in Britain's wind turbines would produce on average 4 kWh a day for each person, which is about 4% of our total energy footprint.
So solar panels and wind turbines deserve to be on the public's radar. Of course, solar panels and wind turbines are old news. So let me suggest a new topic of conversation that also satisfies the 1% rule.
When we are planning wind farms, it makes sense to put them up first in the windiest spots, where the hardware will give the biggest return. So let's talk about wind farms in the Falklands.
Mean wind speeds in the British overseas territory of the Falkland Islands are 9-11 metres per second, compared with 6-9 metres per second around the British Isles. 1,250 3MW turbines in the Falklands would probably produce an average power of 2.5GW (or 1kWh a day for every one of the Queen's 60 million subjects). That's roughly 1% of the total energy footprint of the UK.
Are there any problems with this idea? Well, first, as usual, the wind farms "would spoil the view". There's no free lunch. Serious renewable power requires industrial facilities in the countryside; the point of proposing wind farms in the Falklands is to reduce the area of countryside "spoiled". The total area of the Falklands is 4,700 square miles; the area occupied by 1,250 windmills would be about one-twelfth of the Falklands. Sheep could, of course, still safely graze among the turbines.
Second, the average power produced by these windmills would probably exceed the electricity demand of the 3,000 inhabitants of the Falklands, so we'd need to find other ways of using the power. A traditional way of handling the problem of excess electricity is to produce aluminium. Iceland and Norway, for example, produce 1% and 4% of the world's aluminium respectively. The Falklands wind farm sketched above could produce 1.5m tonnes of aluminium a year – 5% of the world's aluminium production. Aluminium is just one example of a storable product; the electricity could be used to make other energy-intensive materials such as magnesium and cement.
A crazy idea? Perhaps. But we do need a plan that adds up.
• David MacKay FRS is a professor in the department of physics at the University of Cambridge. His book, Sustainable Energy - Without the Hot Air, was published in December 2009, and is available free online from withouthotair.com.
David MacKay
guardian.co.uk, Wednesday 17 June 2009 11.59 BST
I'd like to suggest a 1% rule for news articles about energy-saving gadgets or renewable energy systems. The rule says: "A gizmo may be discussed only if it could lead to energy savings of at least 1%." I suggest this rule not because minnow-sized savings are worthless, but because the public conversation about energy surely deserves to be focussed on bigger fish.
The latest piece of green twaddle that's wasting people's attention is the story about a supermarket car park that has "kinetic road plates" creating "green energy" from the motion of customers' cars.
I'm not saying that these systems don't actually work; perhaps they do save a little bit of energy that would otherwise be wasted in the brakes of the cars arriving in the car park. But my suggestion is that these systems save so little energy, we shouldn't waste newspaper space on such stories. There must be more important things to discuss (assuming we are serious about getting off fossil fuels).
To prove my point, let's compare the energy that might be saved by the "kinetic road plates" with the total energy used by a typical trip to the supermarket. Let's guess that the kinetic road plates extract one fifth of the kinetic energy of the arriving car. For a car weighing one tonne travelling at 20mph when it hits the road plates, the extracted energy comes to 0.002 kilowatt-hours (kWh). Now, the energy used by the car, assuming it is driven three miles to and three miles from the supermarket with a fuel efficiency of 33 miles per gallon, is about 8 kWh. The savings from parking at the green car park thus amount to one four-thousandth of the energy used by the trip to the supermarket.
That's much less than 1%. So this "green energy system" is just eco-bling, creating a delusion of happy progress while distracting people from serious change.
What are some ideas that satisfy the 1% rule? Well, there's lots of examples: a domestic solar hot-water panel will generate roughly 4 kWh a day of hot water, which is roughly 50% of a typical family's hot water consumption, and a bit more than 1% of their total energy footprint. Example two: wind power – a ten-fold increase in Britain's wind turbines would produce on average 4 kWh a day for each person, which is about 4% of our total energy footprint.
So solar panels and wind turbines deserve to be on the public's radar. Of course, solar panels and wind turbines are old news. So let me suggest a new topic of conversation that also satisfies the 1% rule.
When we are planning wind farms, it makes sense to put them up first in the windiest spots, where the hardware will give the biggest return. So let's talk about wind farms in the Falklands.
Mean wind speeds in the British overseas territory of the Falkland Islands are 9-11 metres per second, compared with 6-9 metres per second around the British Isles. 1,250 3MW turbines in the Falklands would probably produce an average power of 2.5GW (or 1kWh a day for every one of the Queen's 60 million subjects). That's roughly 1% of the total energy footprint of the UK.
Are there any problems with this idea? Well, first, as usual, the wind farms "would spoil the view". There's no free lunch. Serious renewable power requires industrial facilities in the countryside; the point of proposing wind farms in the Falklands is to reduce the area of countryside "spoiled". The total area of the Falklands is 4,700 square miles; the area occupied by 1,250 windmills would be about one-twelfth of the Falklands. Sheep could, of course, still safely graze among the turbines.
Second, the average power produced by these windmills would probably exceed the electricity demand of the 3,000 inhabitants of the Falklands, so we'd need to find other ways of using the power. A traditional way of handling the problem of excess electricity is to produce aluminium. Iceland and Norway, for example, produce 1% and 4% of the world's aluminium respectively. The Falklands wind farm sketched above could produce 1.5m tonnes of aluminium a year – 5% of the world's aluminium production. Aluminium is just one example of a storable product; the electricity could be used to make other energy-intensive materials such as magnesium and cement.
A crazy idea? Perhaps. But we do need a plan that adds up.
• David MacKay FRS is a professor in the department of physics at the University of Cambridge. His book, Sustainable Energy - Without the Hot Air, was published in December 2009, and is available free online from withouthotair.com.
Jetion dismisses four of its top staff
By David Blackwell
Published: June 17 2009 18:25
Confidence in Aim-quoted Chinese companies is likely to be dented after Jetion Holdings, a solar-cell manufacturer, dismissed its chief executive and three senior managers for alleged “breaches of their service contracts and fiduciary duties”.
The board believes the four are the operators of a solar-module producer and exporter that is in direct competition with Jetion. It says Roger Lijin Gai, Jetion chief executive, failed to disclose that “his wife was a shareholder in the competing business”. Public records also showed close relatives of the three managers were shareholders in the rival business.
Jetion shares, which were priced at 151p when the company raised £30.5m on joining Aim two years ago, fell 17¾p to 46½p.
John-Marc Bunce – analyst at Nomura, which last month published a “buy” note on Jetion – said the news was “likely to have a sentimental knock-on effect on other foreign-listed Chinese companies, as happened following the issues of Bodisen Biotech a couple of years ago”.
Once the biggest Chinese company on Aim, Bodisen, a producer of organic fertilisers, only last October shrugged off class actions by investors in US courts.
Jetion said investigations of the circumstances surrounding the dismissals were continuing. The company was taking further legal action. “However – as far as can be ascertained at this time – the board believes that the actions giving rise to their dismissals have not had a material impact on the finances and business operations of the company,” it said.
Nomura was already forecasting pre-tax profits for this year would to fall from £20.1m on sales of £250.9m, to profits of £17.4m on sales of £177.2m. The company warned on Wednesday that, while volumes were ahead, prices were about 40 per cent down on last year.
The company said the board was confident its action had averted any adverse effects “from these unhappy events” – but the trading conditions were still “very challenging”.
Copyright The Financial Times Limited 2009
Published: June 17 2009 18:25
Confidence in Aim-quoted Chinese companies is likely to be dented after Jetion Holdings, a solar-cell manufacturer, dismissed its chief executive and three senior managers for alleged “breaches of their service contracts and fiduciary duties”.
The board believes the four are the operators of a solar-module producer and exporter that is in direct competition with Jetion. It says Roger Lijin Gai, Jetion chief executive, failed to disclose that “his wife was a shareholder in the competing business”. Public records also showed close relatives of the three managers were shareholders in the rival business.
Jetion shares, which were priced at 151p when the company raised £30.5m on joining Aim two years ago, fell 17¾p to 46½p.
John-Marc Bunce – analyst at Nomura, which last month published a “buy” note on Jetion – said the news was “likely to have a sentimental knock-on effect on other foreign-listed Chinese companies, as happened following the issues of Bodisen Biotech a couple of years ago”.
Once the biggest Chinese company on Aim, Bodisen, a producer of organic fertilisers, only last October shrugged off class actions by investors in US courts.
Jetion said investigations of the circumstances surrounding the dismissals were continuing. The company was taking further legal action. “However – as far as can be ascertained at this time – the board believes that the actions giving rise to their dismissals have not had a material impact on the finances and business operations of the company,” it said.
Nomura was already forecasting pre-tax profits for this year would to fall from £20.1m on sales of £250.9m, to profits of £17.4m on sales of £177.2m. The company warned on Wednesday that, while volumes were ahead, prices were about 40 per cent down on last year.
The company said the board was confident its action had averted any adverse effects “from these unhappy events” – but the trading conditions were still “very challenging”.
Copyright The Financial Times Limited 2009
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