By MATTHEW DOLAN and JOHN MURPHY
Spurred by billions of dollars in new government aid, car makers are racing to deliver battery-powered vehicles to the mass market -- although whether enough consumers are interested in electric cars remains untested.
On Tuesday, Nissan Motor Co. was granted $1.6 billion in loans by the U.S. Department of Energy and said it plans to use the funds to build the capacity to make more than 100,000 electric cars a year at its plant in Smyrna, Tenn., by 2013.
Nissan's announcement dramatically expands the industry's bet on electric cars.
Ford Motor Co., meantime, received $5.9 billion in Energy Department loans to help retool plants in Illinois, Kentucky, Michigan, Missouri and Ohio to produce 13 fuel-efficient models, including 5,000 to 10,000 electric ones a year starting in 2011.
And Tesla Motors, a California start-up that makes a $109,000 electric sports car, gained approval for a $465 million loan, and said it will use most of the money to develop an affordable family sedan.
Electric vehicles run entirely on battery power for a certain number of miles before they need to be recharged or, in the case of some designs, supplemented by a gasoline engine.
Still, it is unclear whether Americans will embrace electric vehicles and when the market will be ready for them.
Electric cars tend to be smaller than the roomy models U.S. buyers favor. The need for recharging and, eventually, replacement of battery packs requires an infrastructure of recharging stations, repair shops and distributors that doesn't yet exist.
And any significant price premium over a similar-sized gas model could crimp sales -- especially if gas prices remain relatively low. Most auto makers haven't disclosed pricing plans for electric models, though General Motors Corp. has said its Chevrolet Volt is likely to cost about $40,000.
Some experts say additional government aid is needed to jump-start an electric-car industry.
"We need to see per-vehicle tax credits in the range of double -- or maybe triple -- what we see now for hybrids and other electric vehicles," said Eric Fedewa, vice president for global powertrain forecasts at CSM Worldwide, an automotive consulting and research firm.
The boom-and-bust sales of hybrids -- cars like Toyota Motor Corp.'s Prius that have both a gas engine and a battery-powered motor -- reflect Americans' fickle willingness to pay extra for improved fuel efficiency.
The Prius was such a hot seller a year ago when gas topped $4 a gallon that some dealers commanded above-sticker prices and had long waiting lists.
But with the U.S. in recession and gas prices much lower, Toyota has been forced to offer big incentives -- including 0% financing and $1,000 rebates -- to boost demand, and has mothballed a new Prius plant in Mississippi.
GM, which is reorganizing in bankruptcy court, and Chrysler Group LLC, which recently exited Chapter 11, also have applied for billions in Department of Energy loans, but their requests haven't yet been granted because the loans are only supposed to go to "financially viable" companies.
Energy Secretary Steven Chu told reporters the department is discussing the matter with Chrysler and has had "technical talks" with GM about how it would use such money.
Chrysler is working on several electric vehicles, and has started providing a small test fleet of battery-powered minivans to the U.S. Postal Service. GM plans to launch the Volt by the end of 2010.
Nissan, Japan's third-biggest auto maker by sales volume, will make electric cars and the lithium ion batteries to power them at its Tennessee plant, Chief Executive Carlos Ghosn told reporters after the company's annual shareholders meeting Tuesday in Japan.
U.S. production of an all-electric, five-passenger sedan could total up to 150,000 cars a year when the build-out at the Smyrna plant is complete, said Dominique Thormann, senior vice president for administration and finance at Nissan North America.
Other car makers working on electric vehicles include Toyota, Mitsubishi Motors Corp. and Fuji Heavy Industries Ltd., maker of Subarus.
Until now, electric cars have been marketed as a costly niche product. Nissan wants to be the first with a mass-market one by charging an affordable price.
Mr. Ghosn didn't offer details, but said Nissan's electric car would sell at a "reasonable price," comparable with the cost of a normal gasoline-powered car.
Nissan will unveil its electric vehicle Aug. 2, and begin producing it in Japan in the fall of 2010, starting at 50,000 units a year, the company said. It will import the vehicles into the U.S. in small volumes soon after production starts, Nissan officials said.
Mr. Ghosn said that as the economy recovers and oil prices rise, drivers will demand more fuel-efficient cars. Nissan plans to produce a lineup of electric models to satisfy different kinds of transportation needs, he said.
"I'm not at all worried about how to sell the car because there is an appetite for zero-emission cars," Mr. Ghosn said.—Yoshio Takahashi contributed to this article.
Write to Matthew Dolan at matthew.dolan@wsj.com and John Murphy at john.murphy@wsj.com
Wednesday, 24 June 2009
Ford, Nissan Among First to Tap Loans for Retooling
By STEPHEN POWER, JOSHUA MITCHELL and MATTHEW DOLAN
The Obama administration is expected to disclose that Ford Motor Co., Tesla Motors Inc. and Nissan Motor Co. will be among the first beneficiaries of a $25 billion loan program created by Congress to help auto makers retool their factories to produce advanced-technology vehicles.
Energy Secretary Steven Chu plans an announcement Tuesday morning in Michigan, according to government officials familiar with the matter. A spokeswoman for Mr. Chu declined to comment late Monday, as did spokesmen for Ford, Tesla and Nissan.
The Energy Department has been under intense pressure from Congress to speed up the awarding of loans under the program, which was created in 2007 legislation but not funded until last fall, amid a steep sales downturn for the U.S. auto industry. The loans are designed to help auto makers revamp plants to produce new models that are at least 25% more fuel-efficient than vehicles made in 2005.
More than 100 auto and auto-parts makers, from General Motors Corp. and Delphi Corp. to tiny XP Vehicles Inc., a San Francisco start-up designing battery/fuel-cell hybrid vehicles, have applied for the funding, intended in part to boost electric-powered cars and battery-technology improvements.
Ford hasn't detailed publicly how it intends to use the requested $5 billion from the Energy Department. But company officials have said that the auto maker is interested in using the loans to help it retool some of its truck and SUV plants for small-car production in North America.
In a plan submitted to Congress in December as part of the auto-industry bailout hearings, Ford said the monies would be used to help roll out new engines that combine turbo-charging and direct injection to attain 20% fuel savings over similarly performing but larger engines. The company also cited plans for the wider introduction of six-speed transmissions, flex-fuel vehicles and a variety of electric vehicles.
"Our plan calls for an investment of roughly $14 billion in the U.S. on advance technologies to improve fuel efficiency by over 25%," Ford wrote to Congress.
Nissan disclosed in February that it had submitted an application to the Energy Department for a portion of the $25 billion loan program, but didn't specify the amount of money it was seeking. The loan award is expected to help the company upgrade its Smyrna, Tenn., assembly plant, and build a new facility for battery production.
Tesla said it is "very confident" about its aid requests but referred questions to the Energy Department. The company has applied for about $450 million in loans to finance production of an electric-powered family sedan and for production of electric-vehicle components.
A spokesman for XP Vehicles said its application for financing is "moving along" and it hopes to hear on its application "within weeks if not tomorrow."
Delphi, a major auto-parts supplier, applied for "hundreds of millions of dollars" in DOE loans but hasn't received a final decision, said John Anderson, director of the company's corporate-affairs office in Washington, D.C. Mr. Anderson said Delphi has been told that its loan application -- to fund a variety of fuel-efficiency technologies -- has been deemed technically sufficient by the Energy Department.
Write to Stephen Power at stephen.power@wsj.com, Joshua Mitchell at joshua.mitchell@dowjones.com and Matthew Dolan at matthew.dolan@wsj.com
The Obama administration is expected to disclose that Ford Motor Co., Tesla Motors Inc. and Nissan Motor Co. will be among the first beneficiaries of a $25 billion loan program created by Congress to help auto makers retool their factories to produce advanced-technology vehicles.
Energy Secretary Steven Chu plans an announcement Tuesday morning in Michigan, according to government officials familiar with the matter. A spokeswoman for Mr. Chu declined to comment late Monday, as did spokesmen for Ford, Tesla and Nissan.
The Energy Department has been under intense pressure from Congress to speed up the awarding of loans under the program, which was created in 2007 legislation but not funded until last fall, amid a steep sales downturn for the U.S. auto industry. The loans are designed to help auto makers revamp plants to produce new models that are at least 25% more fuel-efficient than vehicles made in 2005.
More than 100 auto and auto-parts makers, from General Motors Corp. and Delphi Corp. to tiny XP Vehicles Inc., a San Francisco start-up designing battery/fuel-cell hybrid vehicles, have applied for the funding, intended in part to boost electric-powered cars and battery-technology improvements.
Ford hasn't detailed publicly how it intends to use the requested $5 billion from the Energy Department. But company officials have said that the auto maker is interested in using the loans to help it retool some of its truck and SUV plants for small-car production in North America.
In a plan submitted to Congress in December as part of the auto-industry bailout hearings, Ford said the monies would be used to help roll out new engines that combine turbo-charging and direct injection to attain 20% fuel savings over similarly performing but larger engines. The company also cited plans for the wider introduction of six-speed transmissions, flex-fuel vehicles and a variety of electric vehicles.
"Our plan calls for an investment of roughly $14 billion in the U.S. on advance technologies to improve fuel efficiency by over 25%," Ford wrote to Congress.
Nissan disclosed in February that it had submitted an application to the Energy Department for a portion of the $25 billion loan program, but didn't specify the amount of money it was seeking. The loan award is expected to help the company upgrade its Smyrna, Tenn., assembly plant, and build a new facility for battery production.
Tesla said it is "very confident" about its aid requests but referred questions to the Energy Department. The company has applied for about $450 million in loans to finance production of an electric-powered family sedan and for production of electric-vehicle components.
A spokesman for XP Vehicles said its application for financing is "moving along" and it hopes to hear on its application "within weeks if not tomorrow."
Delphi, a major auto-parts supplier, applied for "hundreds of millions of dollars" in DOE loans but hasn't received a final decision, said John Anderson, director of the company's corporate-affairs office in Washington, D.C. Mr. Anderson said Delphi has been told that its loan application -- to fund a variety of fuel-efficiency technologies -- has been deemed technically sufficient by the Energy Department.
Write to Stephen Power at stephen.power@wsj.com, Joshua Mitchell at joshua.mitchell@dowjones.com and Matthew Dolan at matthew.dolan@wsj.com
Nissan plans to mass-produce electric cars
Leo Lewis, Asia Business Correspondent
Nissan Motor has belatedly waded into the worldwide battle for dominance of the “green” car market by unveiling plans to produce 100,000 electric vehicles per year at its plant in Tennessee.
Carlos Ghosn, the chief executive of Nissan, said that he hoped to produce electric cars that would compete with “normal cars” on price – a promise which investors said may be easier to make than keep.
The company’s announcement came as Nissan and its main domestic rivals are struggling to divert attention from what promises to be a dreadful year for earnings and which may still not deliver the hoped-for recovery in American car sales.
Toyota, nursing its first full-year loss in 59 years, emulated Nissan’s electric car announcement with its own claim that it would have a fuel-cell car on the road by 2015.
But the announcements from both companies came amid rising concern among analysts that the Japanese car industry’s grandiose bid for eco-friendliness may be limited by natural resources and other factors.
Deutsche Bank’s Kurt Sanger, said: "There is a lot of uncertainty about the future supply of batteries. A lot of what we are hearing are business plans, not production plans – and there is an important difference.”
Nissan, which is 44 per cent owned by France’s Renault, made the announcement at its annual shareholder meeting in Yokohama – an event where Nissan was under intense criticism for falling into the red and not paying a dividend for the second half of 2008. The company, said attendees, is under even greater pressure to explain how it intends to restore itself to profitability.
Mr Ghosn, under specific fire for not bringing Nissan into the hybrid vehicle market sooner, thus leaving Toyota and Honda to steal the show, was unable to defray investors’ major concerns.
He issued a gloomy warning that the economic crisis had not yet finished wreaking havoc on global car sales. “Our priority is surviving the crisis, which is not finished,” Mr Ghosn said, adding: “Is the worst behind us? I don't know.”
Nissan Motor has belatedly waded into the worldwide battle for dominance of the “green” car market by unveiling plans to produce 100,000 electric vehicles per year at its plant in Tennessee.
Carlos Ghosn, the chief executive of Nissan, said that he hoped to produce electric cars that would compete with “normal cars” on price – a promise which investors said may be easier to make than keep.
The company’s announcement came as Nissan and its main domestic rivals are struggling to divert attention from what promises to be a dreadful year for earnings and which may still not deliver the hoped-for recovery in American car sales.
Toyota, nursing its first full-year loss in 59 years, emulated Nissan’s electric car announcement with its own claim that it would have a fuel-cell car on the road by 2015.
But the announcements from both companies came amid rising concern among analysts that the Japanese car industry’s grandiose bid for eco-friendliness may be limited by natural resources and other factors.
Deutsche Bank’s Kurt Sanger, said: "There is a lot of uncertainty about the future supply of batteries. A lot of what we are hearing are business plans, not production plans – and there is an important difference.”
Nissan, which is 44 per cent owned by France’s Renault, made the announcement at its annual shareholder meeting in Yokohama – an event where Nissan was under intense criticism for falling into the red and not paying a dividend for the second half of 2008. The company, said attendees, is under even greater pressure to explain how it intends to restore itself to profitability.
Mr Ghosn, under specific fire for not bringing Nissan into the hybrid vehicle market sooner, thus leaving Toyota and Honda to steal the show, was unable to defray investors’ major concerns.
He issued a gloomy warning that the economic crisis had not yet finished wreaking havoc on global car sales. “Our priority is surviving the crisis, which is not finished,” Mr Ghosn said, adding: “Is the worst behind us? I don't know.”
Obama urges Congress to move swiftly on climate change bill
US president uses news conference to address concerns about costs of moving to clean energy
Suzanne Goldenberg, US environment correspondent
guardian.co.uk, Tuesday 23 June 2009 18.54 BST
Barack Obama put his presidential prestige on the line to urge Congress to pass climate change legislation today, using the high visibility of a White House press conference to take on widespread concerns about the costs of moving to cleaner sources of energy.
The intervention from Obama comes on the eve of a high stakes vote in Congress on a climate change bill. Democrats in Congress have called on Obama to make a personal appeal for the bill which is on a high stakes course this week.
The Democratic House speaker, Nancy Pelosi, has taken a gamble on moving up the date for a vote on the bill to Friday - despite near total resistance to the reform package from Republicans and strong opposition from farm state Democrats.
The presidential intervention crowns a carefully coordinated effort by the White House, administration officials, environmental organisations and major corporations to build support for a bill that is at the heart of Obama's agenda.In the press conference, Obama rejected the argument that getting America off oil and coal would put additional pressure on the federal deficit. He also directly took on critics who say the sweeping climate change bill would inflict high costs on ordinary American families.
"At a time of great fiscal challenges, this legislation is paid for by the polluters who currently emit the dangerous carbon emissions that contaminate the water we drink and pollute the air we breathe," he said.
He repeated what has become the mantra of his administration that investment in clean energy would help save or create millions of new green jobs. "These incentives will finally make clean energy the profitable kind of energy," he said.
The personal appeal from Obama caps a weeklong PR offensive - joined later tonight by Al Gore who had a conference call scheduled with tens of thousands of his supporters.
Administration officials have fanned out across the country to promote the bill. Today alone Vice-president Joe Biden was in Ohio talking up the potential of green manufacturing jobs, the US interior secretary, Ken Salazar, was in New Jersey awarding new offshore wind farm licences, and the energy secretary, Steven Chu, announcing $8bn in loan guarantees for carmakers to promote the development of electric vehicles. More than 20 leading corporations, including energy companies like Duke Energy, Exelon and NRG as well as firms like Starbucks, eBay, and Nike took out full-page ads today in a number of newspapers on Capitol Hill in support of the bill. "We support this legislation because certainty and clear rules of the road enable us to plan," the ad began.
Environmental organisations have also joined the effort, circulating a cost-analysis report from the non-partisan Congressional Budget Office which said the bill would cost the average household about $175 by 2020 - or 48 cents a day. That is a fraction of the cost to the average family that Republican opponents of the bill had claimed.
Youth activists, meanwhile, organised a flash mob in a House office building today.
But Democrats in Congress had still been pressing for a direct sign from Obama. Yesterday, GK Butterfield, a North Carolina Democrat who sits on the House energy committee, acknowledged that the bill was foundering and said Obama would need to make a personal appeal to ensure the bill's passage.
"I think the time is right now for the president of the United States to really weigh in on the energy conversation. He needs to use his communications skills as he does so well," he told a seminar on energy. "If he can use his bully pulpit like this I think the American people are going to get it."
The bill, now swollen to 1,200 pages by various amendments, would cut America's greenhouse gas emissions by 17% over 2005 levels by 2020. It is seen as crucial to the prospects of getting a global agreement to act against climate change at Copenhagen later this year.
The bill has been criticised by Greenpeace and others for failing to move aggressively enough to cap emissions to prevent some of the extreme effects of climate change occurring late in the century.
It has also run into strong opposition from Democrats from rural and farming states, and it was far from certain today that the party leadership can muster enough votes to get the package through the House. Republicans almost uniformly oppose the climate change bill, and have put forward an alternative plan calling for 100 new nuclear plants.However, Democrats are under pressure to move ahead on the energy bill and turn their attention towards the other item on Obama's agenda: healthcare.
Pelosi decided last night to press ahead for a vote - despite the lack of a formal deal with the bill's most vocal opponent, Collin Peterson, the Democratic chairman of the House agricultural committee. Peterson has been leading the campaign from farm state Democrats for better terms for the ethanol industry in the bill - a role acknowledged by Obama today who addressed him personally in his opening remarks. The gesture was part of a broader effort by the White House and administration officials to corral congressional Democrats for a vote. The White House sent Lisa Jackson, the chairman of the Environmental Protection Agency, and Tom Vilsack, the US agricultural secretary, to meet Peterson on Friday, but an aide to the congressman said no deal was reached.
However, Pelosi said she would keep to the schedule. "There are some issues still under discussion, but we are confident we can resolve them by the time the bill goes to the floor on Friday," a spokesman told reporters.
Suzanne Goldenberg, US environment correspondent
guardian.co.uk, Tuesday 23 June 2009 18.54 BST
Barack Obama put his presidential prestige on the line to urge Congress to pass climate change legislation today, using the high visibility of a White House press conference to take on widespread concerns about the costs of moving to cleaner sources of energy.
The intervention from Obama comes on the eve of a high stakes vote in Congress on a climate change bill. Democrats in Congress have called on Obama to make a personal appeal for the bill which is on a high stakes course this week.
The Democratic House speaker, Nancy Pelosi, has taken a gamble on moving up the date for a vote on the bill to Friday - despite near total resistance to the reform package from Republicans and strong opposition from farm state Democrats.
The presidential intervention crowns a carefully coordinated effort by the White House, administration officials, environmental organisations and major corporations to build support for a bill that is at the heart of Obama's agenda.In the press conference, Obama rejected the argument that getting America off oil and coal would put additional pressure on the federal deficit. He also directly took on critics who say the sweeping climate change bill would inflict high costs on ordinary American families.
"At a time of great fiscal challenges, this legislation is paid for by the polluters who currently emit the dangerous carbon emissions that contaminate the water we drink and pollute the air we breathe," he said.
He repeated what has become the mantra of his administration that investment in clean energy would help save or create millions of new green jobs. "These incentives will finally make clean energy the profitable kind of energy," he said.
The personal appeal from Obama caps a weeklong PR offensive - joined later tonight by Al Gore who had a conference call scheduled with tens of thousands of his supporters.
Administration officials have fanned out across the country to promote the bill. Today alone Vice-president Joe Biden was in Ohio talking up the potential of green manufacturing jobs, the US interior secretary, Ken Salazar, was in New Jersey awarding new offshore wind farm licences, and the energy secretary, Steven Chu, announcing $8bn in loan guarantees for carmakers to promote the development of electric vehicles. More than 20 leading corporations, including energy companies like Duke Energy, Exelon and NRG as well as firms like Starbucks, eBay, and Nike took out full-page ads today in a number of newspapers on Capitol Hill in support of the bill. "We support this legislation because certainty and clear rules of the road enable us to plan," the ad began.
Environmental organisations have also joined the effort, circulating a cost-analysis report from the non-partisan Congressional Budget Office which said the bill would cost the average household about $175 by 2020 - or 48 cents a day. That is a fraction of the cost to the average family that Republican opponents of the bill had claimed.
Youth activists, meanwhile, organised a flash mob in a House office building today.
But Democrats in Congress had still been pressing for a direct sign from Obama. Yesterday, GK Butterfield, a North Carolina Democrat who sits on the House energy committee, acknowledged that the bill was foundering and said Obama would need to make a personal appeal to ensure the bill's passage.
"I think the time is right now for the president of the United States to really weigh in on the energy conversation. He needs to use his communications skills as he does so well," he told a seminar on energy. "If he can use his bully pulpit like this I think the American people are going to get it."
The bill, now swollen to 1,200 pages by various amendments, would cut America's greenhouse gas emissions by 17% over 2005 levels by 2020. It is seen as crucial to the prospects of getting a global agreement to act against climate change at Copenhagen later this year.
The bill has been criticised by Greenpeace and others for failing to move aggressively enough to cap emissions to prevent some of the extreme effects of climate change occurring late in the century.
It has also run into strong opposition from Democrats from rural and farming states, and it was far from certain today that the party leadership can muster enough votes to get the package through the House. Republicans almost uniformly oppose the climate change bill, and have put forward an alternative plan calling for 100 new nuclear plants.However, Democrats are under pressure to move ahead on the energy bill and turn their attention towards the other item on Obama's agenda: healthcare.
Pelosi decided last night to press ahead for a vote - despite the lack of a formal deal with the bill's most vocal opponent, Collin Peterson, the Democratic chairman of the House agricultural committee. Peterson has been leading the campaign from farm state Democrats for better terms for the ethanol industry in the bill - a role acknowledged by Obama today who addressed him personally in his opening remarks. The gesture was part of a broader effort by the White House and administration officials to corral congressional Democrats for a vote. The White House sent Lisa Jackson, the chairman of the Environmental Protection Agency, and Tom Vilsack, the US agricultural secretary, to meet Peterson on Friday, but an aide to the congressman said no deal was reached.
However, Pelosi said she would keep to the schedule. "There are some issues still under discussion, but we are confident we can resolve them by the time the bill goes to the floor on Friday," a spokesman told reporters.
UK climate change policies 'dangerously optimistic', MPs warned
Decc and Defra are like 'small dogs yapping at the heels' of more powerful departments, says leading climate scientist
Felicity Carus
guardian.co.uk, Tuesday 23 June 2009 16.39 BST
A leading UK climate scientist today warned MPs that the government's climate change policies are "dangerously optimistic".
Professor Kevin Anderson, the director of the Tyndall Centre for Climate Change Research, said the government's planned carbon cuts – if followed internationally – would have a "50-50 chance" of limiting the rise in global temperatures to 2C. This is the threshold that the EU defines as leading to "dangerous" climate change.
Anderson also said that the two government departments most directly involved with climate change policy, were like "small dogs yapping at the heels" of more powerful departments such as that run by the business secretary, Lord Mandelson. He said that the Department of Energy and Climate Change (Decc), run by Ed Miliband, should be given more power.
Anderson was speaking to MPs on the environmental audit committee as part of an inquiry into the UK's carbon budgets. These are legally binding caps on emissions set over five years by the Committee on Climate Change (CCC), the independent body set up to advise the government on how big the cuts should be.
In April, the CCC's proposed cut of 34% by 2020 relative to 1990 levels was adopted by the chancellor in his budget, making Britain the first country in the world to pursue legally binding emissions reductions. The CCC hopes that the government will adopt a higher intended budget (a 42% reduction in emissions by 2020) within the next two years, once a global deal on climate change has been agreed. But Anderson said that the UK should show leadership before the Copenhagen summit and raise the target to 40% now.
The top scientist's criticism will come as an unwelcome distraction to Decc ahead of the release of its "road to Copenhagen" strategy document on Friday. This will lay out what the government hopes to achieve at the UN climate negotiations in Copenhagen in December and why the meeting is so important. The report will be accompanied by a dedicated website and online video.
But Anderson said that without more ambitious action he feared that a significant deal at Copenhagen would not be achieved. "No one I talk to thinks there is going to be anything significant to come out of Copenhagen," he said.
"We are going to come out and recover the deck-chairs in preparation for moving them as the Titanic sinks. We're not even at the stage of rearranging them," he added.
He criticised CCC's carbon budget because it failed to adequately factor in emissions from food, deforestation, aviation and shipping and the manufacture of goods for the west.
Anderson said a commitment to a 40% cut by 2020 would help to press other countries into a stronger deal on a successor to the Kyoto protocol. "It would send a much stronger message at Copenhagen that we need those levels of cuts," he said. "After 2020 you're looking at completely decarbonising the global system. It would take a vertical drop in emissions after 2020 if we have any chance of meeting the 2050 target."
David Kennedy, the chief executive of the CCC, said: "The CCC set a 2050 emissions reduction target guided by the latest scientific research and comprehensive climate modelling across the full range of emitting sectors and gases. The target, together with deep cuts from other developed and developing countries, is designed to keep global mean temperature increase as close to 2C as is practically possible. The carbon budgets are designed to put the UK on a pathway to the 80% target and to meet the climate change objective".
Anderson praised politicians for taking on the science of climate change. But accused them of letting policy be driven by political expediency rather than science. He compared Decc and the Department for the Environment, Food and Rural Affairs (Defra), to "small dogs yapping at the heels" of more powerful departments such as the Department for Business Innovation and Skills and the Treasury. He said the Treasury should be "dancing to the tune of Decc".
A spokesperson for Decc said: "The UK will be pushing for the most ambitious deal possible at Copenhagen. At home we've taken the CCC's advice and have set a legally binding target to achieve at least a 34% reduction in greenhouse gas emissions against 1990 levels by 2020, consistent with our share of the EU 2020 target. We've already said that we'll look again at tightening our carbon budgets once an international agreement has been achieved."
Felicity Carus
guardian.co.uk, Tuesday 23 June 2009 16.39 BST
A leading UK climate scientist today warned MPs that the government's climate change policies are "dangerously optimistic".
Professor Kevin Anderson, the director of the Tyndall Centre for Climate Change Research, said the government's planned carbon cuts – if followed internationally – would have a "50-50 chance" of limiting the rise in global temperatures to 2C. This is the threshold that the EU defines as leading to "dangerous" climate change.
Anderson also said that the two government departments most directly involved with climate change policy, were like "small dogs yapping at the heels" of more powerful departments such as that run by the business secretary, Lord Mandelson. He said that the Department of Energy and Climate Change (Decc), run by Ed Miliband, should be given more power.
Anderson was speaking to MPs on the environmental audit committee as part of an inquiry into the UK's carbon budgets. These are legally binding caps on emissions set over five years by the Committee on Climate Change (CCC), the independent body set up to advise the government on how big the cuts should be.
In April, the CCC's proposed cut of 34% by 2020 relative to 1990 levels was adopted by the chancellor in his budget, making Britain the first country in the world to pursue legally binding emissions reductions. The CCC hopes that the government will adopt a higher intended budget (a 42% reduction in emissions by 2020) within the next two years, once a global deal on climate change has been agreed. But Anderson said that the UK should show leadership before the Copenhagen summit and raise the target to 40% now.
The top scientist's criticism will come as an unwelcome distraction to Decc ahead of the release of its "road to Copenhagen" strategy document on Friday. This will lay out what the government hopes to achieve at the UN climate negotiations in Copenhagen in December and why the meeting is so important. The report will be accompanied by a dedicated website and online video.
But Anderson said that without more ambitious action he feared that a significant deal at Copenhagen would not be achieved. "No one I talk to thinks there is going to be anything significant to come out of Copenhagen," he said.
"We are going to come out and recover the deck-chairs in preparation for moving them as the Titanic sinks. We're not even at the stage of rearranging them," he added.
He criticised CCC's carbon budget because it failed to adequately factor in emissions from food, deforestation, aviation and shipping and the manufacture of goods for the west.
Anderson said a commitment to a 40% cut by 2020 would help to press other countries into a stronger deal on a successor to the Kyoto protocol. "It would send a much stronger message at Copenhagen that we need those levels of cuts," he said. "After 2020 you're looking at completely decarbonising the global system. It would take a vertical drop in emissions after 2020 if we have any chance of meeting the 2050 target."
David Kennedy, the chief executive of the CCC, said: "The CCC set a 2050 emissions reduction target guided by the latest scientific research and comprehensive climate modelling across the full range of emitting sectors and gases. The target, together with deep cuts from other developed and developing countries, is designed to keep global mean temperature increase as close to 2C as is practically possible. The carbon budgets are designed to put the UK on a pathway to the 80% target and to meet the climate change objective".
Anderson praised politicians for taking on the science of climate change. But accused them of letting policy be driven by political expediency rather than science. He compared Decc and the Department for the Environment, Food and Rural Affairs (Defra), to "small dogs yapping at the heels" of more powerful departments such as the Department for Business Innovation and Skills and the Treasury. He said the Treasury should be "dancing to the tune of Decc".
A spokesperson for Decc said: "The UK will be pushing for the most ambitious deal possible at Copenhagen. At home we've taken the CCC's advice and have set a legally binding target to achieve at least a 34% reduction in greenhouse gas emissions against 1990 levels by 2020, consistent with our share of the EU 2020 target. We've already said that we'll look again at tightening our carbon budgets once an international agreement has been achieved."
Where's the world's plan of action against climate change?
The IPCC wants nations to work together to fight climate change – and mitigation could bring economic benefits too
Rajendra Pachauri
guardian.co.uk, Tuesday 23 June 2009 10.00 BST
Today, international action on climate change is urgent and essential. Indeed, there can no longer be any debate about the need to act, because the Intergovernmental Panel on Climate Change (IPCC), of which I am chairman, has established climate change as an unequivocal reality beyond scientific doubt.
For instance, changes are taking place in precipitation patterns, with a trend toward higher precipitation levels in the world's upper latitudes and lower precipitation in some sub-tropical and tropical regions, as well as in the Mediterranean area. The number of extreme precipitation events is also increasing – and are increasingly widespread. Moreover, the frequency and intensity of heatwaves, floods, and droughts are on the rise.
This change in the amount and pattern of rainfall has serious implications for many economic activities, as well as for countries' preparedness to handle emergencies such as large-scale coastal flooding or heavy snowfall.
Some parts of the world are more vulnerable than others to these changes. The Arctic region, in particular, has been warming at twice the rate of the rest of the globe. Coral reefs, mega-deltas (which include cities like Shanghai, Kolkata, and Dhaka), and small island states are also extremely vulnerable to rising sea levels.
Other negative effects of climate change include possible reductions in crop yields. In some African countries, for example, yields could decline by as much as 50% by 2020. Climate change would also lead to increased water stress, which by 2020 could affect 75-250 million people in Africa alone.
Overall, temperature increases are projected to increase by the year 2100 within a range of 1.1C to 6.4C. In order to focus on this set of outcomes, the IPCC has come up with a best estimate at the lower end of this range of 1.8C, and 4C at the upper end. Even at the lower estimate, the consequences of climate change could be severe in several parts of the world, including an increase in water stress, serious effects on ecosystems and food security, and threats to life and property as a result of coastal flooding.
There also may be serious direct consequences for human health if climate change is not checked, particularly increased morbidity and mortality as a result of heatwaves, floods, and droughts. Moreover, the distribution of some diseases would change, making human populations more vulnerable.
Because the impact of climate change is global, it is essential that the world as a whole take specific measures to adapt. But it is already clear that the capacity of some communities to adapt will quickly be exceeded if climate change goes unmitigated.
To help these most vulnerable communities, it is essential for the world to devise a plan of action to limit the emission of greenhouse gases (GHGs). Several scenarios have been assessed by the IPCC, and one that would limit future temperature increase to between 2.0-2.4C would require that emissions peak no later than 2015, and decline thereafter. The rate of decline would then determine the extent to which the worst effects of climate change can be avoided.
The IPCC also found that the cost of such a strict effort at mitigation would not exceed 3% of global GDP in 2030. Moreover, there are enormous co-benefits to mitigation: lower emissions of GHGs would be accompanied by lower air pollution and increased energy security, agricultural output, and employment. If these co-benefits were taken fully into account, that price tag of 3% of GDP in 2030 would be substantially lower, perhaps even negative. The world could actually enhance economic output and welfare by pursuing a path of mitigation.
The need for international action, therefore, stems from two important observations arising out of the IPCC's work. First, if we do not mitigate emissions of GHGs, the negative effects of climate change will be difficult to reverse, implying great hardship and possibly danger to mankind and other species.
Second, the benefits of mitigating emissions of GHGs are so overwhelming that this, combined with the prospect of the harm resulting from inaction, makes it imperative for the world to devise an international response and a plan of action. Given the challenge facing us, the magnitude and nature of which were clearly brought out by the IPCC, the Copenhagen conference later this year must produce a multi-lateral agreement that deals adequately with climate change.
Copyright: Project Syndicate 2009.
Rajendra Pachauri
guardian.co.uk, Tuesday 23 June 2009 10.00 BST
Today, international action on climate change is urgent and essential. Indeed, there can no longer be any debate about the need to act, because the Intergovernmental Panel on Climate Change (IPCC), of which I am chairman, has established climate change as an unequivocal reality beyond scientific doubt.
For instance, changes are taking place in precipitation patterns, with a trend toward higher precipitation levels in the world's upper latitudes and lower precipitation in some sub-tropical and tropical regions, as well as in the Mediterranean area. The number of extreme precipitation events is also increasing – and are increasingly widespread. Moreover, the frequency and intensity of heatwaves, floods, and droughts are on the rise.
This change in the amount and pattern of rainfall has serious implications for many economic activities, as well as for countries' preparedness to handle emergencies such as large-scale coastal flooding or heavy snowfall.
Some parts of the world are more vulnerable than others to these changes. The Arctic region, in particular, has been warming at twice the rate of the rest of the globe. Coral reefs, mega-deltas (which include cities like Shanghai, Kolkata, and Dhaka), and small island states are also extremely vulnerable to rising sea levels.
Other negative effects of climate change include possible reductions in crop yields. In some African countries, for example, yields could decline by as much as 50% by 2020. Climate change would also lead to increased water stress, which by 2020 could affect 75-250 million people in Africa alone.
Overall, temperature increases are projected to increase by the year 2100 within a range of 1.1C to 6.4C. In order to focus on this set of outcomes, the IPCC has come up with a best estimate at the lower end of this range of 1.8C, and 4C at the upper end. Even at the lower estimate, the consequences of climate change could be severe in several parts of the world, including an increase in water stress, serious effects on ecosystems and food security, and threats to life and property as a result of coastal flooding.
There also may be serious direct consequences for human health if climate change is not checked, particularly increased morbidity and mortality as a result of heatwaves, floods, and droughts. Moreover, the distribution of some diseases would change, making human populations more vulnerable.
Because the impact of climate change is global, it is essential that the world as a whole take specific measures to adapt. But it is already clear that the capacity of some communities to adapt will quickly be exceeded if climate change goes unmitigated.
To help these most vulnerable communities, it is essential for the world to devise a plan of action to limit the emission of greenhouse gases (GHGs). Several scenarios have been assessed by the IPCC, and one that would limit future temperature increase to between 2.0-2.4C would require that emissions peak no later than 2015, and decline thereafter. The rate of decline would then determine the extent to which the worst effects of climate change can be avoided.
The IPCC also found that the cost of such a strict effort at mitigation would not exceed 3% of global GDP in 2030. Moreover, there are enormous co-benefits to mitigation: lower emissions of GHGs would be accompanied by lower air pollution and increased energy security, agricultural output, and employment. If these co-benefits were taken fully into account, that price tag of 3% of GDP in 2030 would be substantially lower, perhaps even negative. The world could actually enhance economic output and welfare by pursuing a path of mitigation.
The need for international action, therefore, stems from two important observations arising out of the IPCC's work. First, if we do not mitigate emissions of GHGs, the negative effects of climate change will be difficult to reverse, implying great hardship and possibly danger to mankind and other species.
Second, the benefits of mitigating emissions of GHGs are so overwhelming that this, combined with the prospect of the harm resulting from inaction, makes it imperative for the world to devise an international response and a plan of action. Given the challenge facing us, the magnitude and nature of which were clearly brought out by the IPCC, the Copenhagen conference later this year must produce a multi-lateral agreement that deals adequately with climate change.
Copyright: Project Syndicate 2009.
Copenhagen climate change treaty backed by 'Hopenhagen' campaign
UN and international coalition of advertising agencies launch global campaign at Cannes Lions festival
Mark Sweney
guardian.co.uk, Tuesday 23 June 2009 17.57 BST
The 'Hopenhagen' ad intends to make people hopeful about climate change. Photograph: Ogilvy
The United Nations and an international coalition of advertising agencies today launched a global marketing campaign for the climate change treaty to be ratified in Copenhagen later this year.
Launched under the umbrella strapline "Hopenhagen", the campaign aims to raise awareness of the importance of the UN meeting in Denmark in December. The meeting aims to secure a new global climate change treaty to replace the Kyoto protocol.
UN representatives unveiled the campaign, in conjunction with the International Advertising Association, at the Cannes Lions International Advertising Festival today.
The aim of the campaign is to try and get the public to move from "coping" with climate change to one of "hope" that action can be taken to tackle the issue.
"Hopenhagan" aims to be an "open source" campaign using a central website, hopenhagen.org, to drive the debate and awareness and allow users to send messages to the 192 UN delegates attending the meeting.
An "aggressive" consumer launch of the "Hopenhagen" initiative has been planned for September.
The first ads will be displayed this week at the Cannes Lions festival in France and at London Heathrow airport, Los Angeles airport and John F Kennedy International airport.
"Climate change is one of the epic challenges facing this and future generations. It is time to seal a deal. We need a global movement that mobilizes real change," said UN secretary-general Ban Ki-moon.
"[Hopenhagen] is about global action for a global climate treaty and a better future for humankind," he added.
Strategy and creative ads for the campaign have been developed by WPP-owned ad agency Ogilvy & Mather. Digital ads have been developed by Colle+McVoy. Global PR will be handled by Omnicom's Ketchum.
The initiative has been supported by a host of the world's advertising agency groups including Dentsu, Omnicom, IPG and Publicis Groupe.
guardian.co.uk, Tuesday 23 June 2009 17.57 BST
The 'Hopenhagen' ad intends to make people hopeful about climate change. Photograph: Ogilvy
The United Nations and an international coalition of advertising agencies today launched a global marketing campaign for the climate change treaty to be ratified in Copenhagen later this year.
Launched under the umbrella strapline "Hopenhagen", the campaign aims to raise awareness of the importance of the UN meeting in Denmark in December. The meeting aims to secure a new global climate change treaty to replace the Kyoto protocol.
UN representatives unveiled the campaign, in conjunction with the International Advertising Association, at the Cannes Lions International Advertising Festival today.
The aim of the campaign is to try and get the public to move from "coping" with climate change to one of "hope" that action can be taken to tackle the issue.
"Hopenhagan" aims to be an "open source" campaign using a central website, hopenhagen.org, to drive the debate and awareness and allow users to send messages to the 192 UN delegates attending the meeting.
An "aggressive" consumer launch of the "Hopenhagen" initiative has been planned for September.
The first ads will be displayed this week at the Cannes Lions festival in France and at London Heathrow airport, Los Angeles airport and John F Kennedy International airport.
"Climate change is one of the epic challenges facing this and future generations. It is time to seal a deal. We need a global movement that mobilizes real change," said UN secretary-general Ban Ki-moon.
"[Hopenhagen] is about global action for a global climate treaty and a better future for humankind," he added.
Strategy and creative ads for the campaign have been developed by WPP-owned ad agency Ogilvy & Mather. Digital ads have been developed by Colle+McVoy. Global PR will be handled by Omnicom's Ketchum.
The initiative has been supported by a host of the world's advertising agency groups including Dentsu, Omnicom, IPG and Publicis Groupe.
Time is right for Scotland to take lead on climate change
Published Date: 24 June 2009
By Mike Robinson
TODAY the Scottish parliament will debate and vote on the Climate Change (Scotland) Bill and while there is much to be decided it looks likely to deliver a commitment to cut greenhouse gas emissions by 42 per cent by 2020, and by at least 80 per cent by 2050. If adopted, alongside a commitment to meet the targets mainly through reductions in Scotland, this would be the strongest piece of climate change legislation in the world.
Scotland would be setting a vital precedent in the rich world that necessary action to safeguard our future on the planet is possible. This is more important in the run-up to UN negotiations in Copenhagen in December which aim to agree a replacement ..
GCL-Poly to Purchase Solar-Cell Parts Maker
By JEFFREY NG and YVONNE LEE
HONG KONG -- GCL-Poly Energy Holdings Ltd. plans to acquire a Chinese solar-cell parts maker from its controlling shareholder in a deal valued at HK$26.35 billion (US$3.4 billion).
GCL-Poly is looking to secure materials to expand its solar-energy business as the Chinese government is actively promoting the use of renewable energy to stem the effects of global warming and rising pollution in the country.
The Hong Kong-listed GCL-Poly said it will issue new shares at HK$2.20 each to its chairman, Zhu Gongshan, and connected parties to help fund the purchase of Jiangsu Zhongneng Polysilicon Technology Development Co.
Jiangsu Zhongneng produces polysilicon, which is the primary raw material used in the solar-power industry for solar wafers, cells, and modules that convert sunlight into electricity.
Mr. Zhu and the connected parties' combined stake in GCL-Poly will rise to 56.17% from 34.47%, the company said.
The offer price represents a 12% discount to the stock's closing price of HK$2.50 before trading was suspended June 4. GCL-Poly will also issue US$350 million in secured notes and seek a loan facility worth US$300 million to fund the purchase.
Mr. Zhu said he expects Beijing to continue to initiate more incentives or subsidy programs to encourage consumers to switch to solar power.
In March, Beijing said it will subsidize as much as 50% of the installation cost of rooftop solar panels. The country's economic planner plans to more than double renewable-energy consumption in China to 15% of total primary energy consumption by 2020.
Write to Jeffrey Ng at jeffrey.ng@dowjones.com and Yvonne Lee at yvonne.lee@wsj.com
HONG KONG -- GCL-Poly Energy Holdings Ltd. plans to acquire a Chinese solar-cell parts maker from its controlling shareholder in a deal valued at HK$26.35 billion (US$3.4 billion).
GCL-Poly is looking to secure materials to expand its solar-energy business as the Chinese government is actively promoting the use of renewable energy to stem the effects of global warming and rising pollution in the country.
The Hong Kong-listed GCL-Poly said it will issue new shares at HK$2.20 each to its chairman, Zhu Gongshan, and connected parties to help fund the purchase of Jiangsu Zhongneng Polysilicon Technology Development Co.
Jiangsu Zhongneng produces polysilicon, which is the primary raw material used in the solar-power industry for solar wafers, cells, and modules that convert sunlight into electricity.
Mr. Zhu and the connected parties' combined stake in GCL-Poly will rise to 56.17% from 34.47%, the company said.
The offer price represents a 12% discount to the stock's closing price of HK$2.50 before trading was suspended June 4. GCL-Poly will also issue US$350 million in secured notes and seek a loan facility worth US$300 million to fund the purchase.
Mr. Zhu said he expects Beijing to continue to initiate more incentives or subsidy programs to encourage consumers to switch to solar power.
In March, Beijing said it will subsidize as much as 50% of the installation cost of rooftop solar panels. The country's economic planner plans to more than double renewable-energy consumption in China to 15% of total primary energy consumption by 2020.
Write to Jeffrey Ng at jeffrey.ng@dowjones.com and Yvonne Lee at yvonne.lee@wsj.com
GCL-Poly’s $3.4bn solar acquisition
Published: June 23 2009 09:25
It is easy to see why the myriad investment vehicles behind Hong Kong-listed GCL-Poly Energy’s $3.4bn purchase of GCL Solar and other polysilicon plants are blessed with names such as Happy Genius and Greatest Joy. This is a deal that sees a power plant operator in China, biggest emitter of greenhouse gases, move decisively into clean energy.
Seasoned China hands will smell a rat. GCL Solar, or Silicon Technology Holdings as it was then known, sought to list in New York last summer. Roiled markets put paid to that; instead, investors are now being treated to a classic related party transaction. Zhu Gong Shan, chairman and, together with his family, controlling shareholder of GCL-Poly, is also the major vendor. Thus Mr Zhu, rather than any industrial logic, is the real driver of this deal. Any synergies between coal-fired plants and those producing polysilicon are few.
Still, measured on a trailing basis, the bid price of about 10 times earnings is roughly in line with the global peer group. Future earnings are anyone’s guess. Polysilicon moved from shortage to glut in almost the time it takes to flick a light switch. With governments everywhere throwing subsidies at clean energy and pledging eye-popping targets for renewable energy, newcomers are flocking in: there are believed to be more than 100 players, half of them in China.
The result, according to consultancy iSuppli, is that solar cell production could double this year, ramping up supplies. Polysilicon spot prices are already down from an average $400/kg last year to about $60/kg. Investors in Hong Kong saw the sunny side yesterday, pushing the price of GCL-Poly up 15 per cent. That is putting a lot of faith in politicians delivering on promises and connected party transactions benefiting all participants.
BACKGROUND NEWS
GCL-Poly Energy, a Hong Kong-based power plant operator, said on Tuesday it would pay HK$26.4bn (US$3.4bn) to acquire solar assets from its chairman as it seeks to expand in the green energy sector. The company said it would buy Jiangsu Zhongeng, a supplier of polysilicon and wafers used by the solar industry, from Zhu Gongshan, chairman and controlling shareholder of GCL-Poly.
To fund the purchase, GCL-Poly will issue 10bn new shares at HK$2.2 each, representing a 12 per cent discount to the company’s last closing price. It will also issue US$350m in secured notes and pay Mr Zhu US$200m in cash
It is easy to see why the myriad investment vehicles behind Hong Kong-listed GCL-Poly Energy’s $3.4bn purchase of GCL Solar and other polysilicon plants are blessed with names such as Happy Genius and Greatest Joy. This is a deal that sees a power plant operator in China, biggest emitter of greenhouse gases, move decisively into clean energy.
Seasoned China hands will smell a rat. GCL Solar, or Silicon Technology Holdings as it was then known, sought to list in New York last summer. Roiled markets put paid to that; instead, investors are now being treated to a classic related party transaction. Zhu Gong Shan, chairman and, together with his family, controlling shareholder of GCL-Poly, is also the major vendor. Thus Mr Zhu, rather than any industrial logic, is the real driver of this deal. Any synergies between coal-fired plants and those producing polysilicon are few.
Still, measured on a trailing basis, the bid price of about 10 times earnings is roughly in line with the global peer group. Future earnings are anyone’s guess. Polysilicon moved from shortage to glut in almost the time it takes to flick a light switch. With governments everywhere throwing subsidies at clean energy and pledging eye-popping targets for renewable energy, newcomers are flocking in: there are believed to be more than 100 players, half of them in China.
The result, according to consultancy iSuppli, is that solar cell production could double this year, ramping up supplies. Polysilicon spot prices are already down from an average $400/kg last year to about $60/kg. Investors in Hong Kong saw the sunny side yesterday, pushing the price of GCL-Poly up 15 per cent. That is putting a lot of faith in politicians delivering on promises and connected party transactions benefiting all participants.
BACKGROUND NEWS
GCL-Poly Energy, a Hong Kong-based power plant operator, said on Tuesday it would pay HK$26.4bn (US$3.4bn) to acquire solar assets from its chairman as it seeks to expand in the green energy sector. The company said it would buy Jiangsu Zhongeng, a supplier of polysilicon and wafers used by the solar industry, from Zhu Gongshan, chairman and controlling shareholder of GCL-Poly.
To fund the purchase, GCL-Poly will issue 10bn new shares at HK$2.2 each, representing a 12 per cent discount to the company’s last closing price. It will also issue US$350m in secured notes and pay Mr Zhu US$200m in cash
GCL-Poly’s $3.4bn solar acquisition
Published: June 23 2009 09:25
It is easy to see why the myriad investment vehicles behind Hong Kong-listed GCL-Poly Energy’s $3.4bn purchase of GCL Solar and other polysilicon plants are blessed with names such as Happy Genius and Greatest Joy. This is a deal that sees a power plant operator in China, biggest emitter of greenhouse gases, move decisively into clean energy.
Seasoned China hands will smell a rat. GCL Solar, or Silicon Technology Holdings as it was then known, sought to list in New York last summer. Roiled markets put paid to that; instead, investors are now being treated to a classic related party transaction. Zhu Gong Shan, chairman and, together with his family, controlling shareholder of GCL-Poly, is also the major vendor. Thus Mr Zhu, rather than any industrial logic, is the real driver of this deal. Any synergies between coal-fired plants and those producing polysilicon are few.
Still, measured on a trailing basis, the bid price of about 10 times earnings is roughly in line with the global peer group. Future earnings are anyone’s guess. Polysilicon moved from shortage to glut in almost the time it takes to flick a light switch. With governments everywhere throwing subsidies at clean energy and pledging eye-popping targets for renewable energy, newcomers are flocking in: there are believed to be more than 100 players, half of them in China.
The result, according to consultancy iSuppli, is that solar cell production could double this year, ramping up supplies. Polysilicon spot prices are already down from an average $400/kg last year to about $60/kg. Investors in Hong Kong saw the sunny side yesterday, pushing the price of GCL-Poly up 15 per cent. That is putting a lot of faith in politicians delivering on promises and connected party transactions benefiting all participants.
BACKGROUND NEWS
GCL-Poly Energy, a Hong Kong-based power plant operator, said on Tuesday it would pay HK$26.4bn (US$3.4bn) to acquire solar assets from its chairman as it seeks to expand in the green energy sector. The company said it would buy Jiangsu Zhongeng, a supplier of polysilicon and wafers used by the solar industry, from Zhu Gongshan, chairman and controlling shareholder of GCL-Poly.
To fund the purchase, GCL-Poly will issue 10bn new shares at HK$2.2 each, representing a 12 per cent discount to the company’s last closing price. It will also issue US$350m in secured notes and pay Mr Zhu US$200m in cash
It is easy to see why the myriad investment vehicles behind Hong Kong-listed GCL-Poly Energy’s $3.4bn purchase of GCL Solar and other polysilicon plants are blessed with names such as Happy Genius and Greatest Joy. This is a deal that sees a power plant operator in China, biggest emitter of greenhouse gases, move decisively into clean energy.
Seasoned China hands will smell a rat. GCL Solar, or Silicon Technology Holdings as it was then known, sought to list in New York last summer. Roiled markets put paid to that; instead, investors are now being treated to a classic related party transaction. Zhu Gong Shan, chairman and, together with his family, controlling shareholder of GCL-Poly, is also the major vendor. Thus Mr Zhu, rather than any industrial logic, is the real driver of this deal. Any synergies between coal-fired plants and those producing polysilicon are few.
Still, measured on a trailing basis, the bid price of about 10 times earnings is roughly in line with the global peer group. Future earnings are anyone’s guess. Polysilicon moved from shortage to glut in almost the time it takes to flick a light switch. With governments everywhere throwing subsidies at clean energy and pledging eye-popping targets for renewable energy, newcomers are flocking in: there are believed to be more than 100 players, half of them in China.
The result, according to consultancy iSuppli, is that solar cell production could double this year, ramping up supplies. Polysilicon spot prices are already down from an average $400/kg last year to about $60/kg. Investors in Hong Kong saw the sunny side yesterday, pushing the price of GCL-Poly up 15 per cent. That is putting a lot of faith in politicians delivering on promises and connected party transactions benefiting all participants.
BACKGROUND NEWS
GCL-Poly Energy, a Hong Kong-based power plant operator, said on Tuesday it would pay HK$26.4bn (US$3.4bn) to acquire solar assets from its chairman as it seeks to expand in the green energy sector. The company said it would buy Jiangsu Zhongeng, a supplier of polysilicon and wafers used by the solar industry, from Zhu Gongshan, chairman and controlling shareholder of GCL-Poly.
To fund the purchase, GCL-Poly will issue 10bn new shares at HK$2.2 each, representing a 12 per cent discount to the company’s last closing price. It will also issue US$350m in secured notes and pay Mr Zhu US$200m in cash
Lord Mandelson indicates more nuclear energy work will go to private sector
Business Secretary Lord Mandelson has indicated that the Government will outsource more of its nuclear energy work to the private sector as it looks to pare back its spending.
By Nic Fildes Published: 6:56PM BST 23 Jun 2009
"Apart from the enduring vale for money of outsourcing, the government has to operate under greater constraints … we will use the private sector more," he said at a nuclear power industry event held in London.
Companies such as VT, which organised the event, and Rolls-Royce provide outsourcing services in the burgeoning UK nuclear industry.
Mr Mandelson said that UK-based companies are able to supply up to 90pc of the work for new-build nuclear power stations.
But he added that the government is "looking carefully" at public and private sector options for boosting Britain's nuclear manufacturing capacity in areas such as ultra-large components and reactor pressure vessels.
Mr Mandelson said that the government is "not in the business of giving out subsidies" but conceded that it is very difficult for companies to secure financing for large infrastructure projects in the current economic climate.
By Nic Fildes Published: 6:56PM BST 23 Jun 2009
"Apart from the enduring vale for money of outsourcing, the government has to operate under greater constraints … we will use the private sector more," he said at a nuclear power industry event held in London.
Companies such as VT, which organised the event, and Rolls-Royce provide outsourcing services in the burgeoning UK nuclear industry.
Mr Mandelson said that UK-based companies are able to supply up to 90pc of the work for new-build nuclear power stations.
But he added that the government is "looking carefully" at public and private sector options for boosting Britain's nuclear manufacturing capacity in areas such as ultra-large components and reactor pressure vessels.
Mr Mandelson said that the government is "not in the business of giving out subsidies" but conceded that it is very difficult for companies to secure financing for large infrastructure projects in the current economic climate.
Starting a New Energy Diet
By JEFFREY BALL
Get ready to make an attitude adjustment, brought to you by the federal government.
Through sweeping new environmental policies, the Obama administration and Democrats in Congress are planning an attack on the country's polluting, consumptive ways. The strategy involves a good deal of education, while rewarding good behavior and penalizing the bad. But whether faced with the soft pitch or the hard sell, some Americans might not be buying.
New taxes and mandates, combined with billions of dollars in incentives, would alter almost every facet of Americans' lives.
As a result of the policies, cars might be smaller, houses could have fewer rooms and consumers could see higher electricity bills.
Crucial details remain fuzzy: how quickly the shift to a more-efficient America would take place, and how much it would cost. But the goal is to prod Americans to curb their energy consumption more sharply than they have since the early 1980s -- and more fundamentally than they have in the country's history.
By almost any measure, Americans lead the world in energy use. "We use so much energy, but we misuse it," Steven Chu, President Barack Obama's energy secretary, said in an interview.
Mr. Chu, a physicist, said the administration intends to use a combination of policy and rhetoric to convince Americans to use less energy. "There are various ways to alter behavior," he said.
Much of the administration's strategy relies on the power of education. As a candidate last year, Mr. Obama told Americans they could help curb energy use by keeping their car tires inflated. His comment drew derision from critics who noted that studies suggest proper tire inflation would trim energy use only marginally. Mr. Obama's response: Every little bit helps.
As president, Mr. Obama has proposed raising fuel-economy standards in cars. The new rules would promote technology like dashboard gauges that provide drivers a real-time readout of fuel economy.
Obama's Energy Bill Set Before the House1:07
President Obama urges the House of representatives to pass the energy bill, which was designed to combat carbon pollution threatening the planet. Video courtesy of Fox News.
The administration's plan to modernize the nation's electrical grid incorporates features to teach people how to live less wastefully. The proposed "smart" grid, for example, might include sensors in houses that could shut off the lights in an empty room or temporarily turn off an air conditioner if the grid were overloaded.
The administration's economic-stimulus plan includes a raft of new, energy-related tax breaks, including a $1,500 credit for consumers who upgrade the efficiency of their homes. Under a new program dubbed "cash for clunkers," car owners who trade in their old gas-guzzlers for new, more-efficient vehicles will get government money to help defray the expense.
Much of this shift would be funded by what amount to new charges on fossil-fuel consumption. As part of an energy bill endorsed by the administration, companies would have to buy permits to emit greenhouse gases such as carbon dioxide. Companies would pass on those costs to consumers in the form of higher energy prices, which are projected to increase on average by a couple of hundred dollars a year per household. Heavier users would pay more.
Raising prices is one of the most reliable ways to influence people's behavior, the administration has concluded. But breaking even small habits isn't easy.
In a bid to save electricity, Dallas lawyer and painter Arthur Blanchard earlier this year switched the light bulbs in his favorite reading lamp to compact fluorescents, the squiggly models that use a fraction of the power of the average incandescent bulb. It wasn't long before Mr. Blanchard, 82 years old, switched back to the old-style bulbs. The energy-efficient ones, he said, "just didn't give out enough light to read the paper by."
Write to Jeffrey Ball at jeffrey.ball@wsj.com
Get ready to make an attitude adjustment, brought to you by the federal government.
Through sweeping new environmental policies, the Obama administration and Democrats in Congress are planning an attack on the country's polluting, consumptive ways. The strategy involves a good deal of education, while rewarding good behavior and penalizing the bad. But whether faced with the soft pitch or the hard sell, some Americans might not be buying.
New taxes and mandates, combined with billions of dollars in incentives, would alter almost every facet of Americans' lives.
As a result of the policies, cars might be smaller, houses could have fewer rooms and consumers could see higher electricity bills.
Crucial details remain fuzzy: how quickly the shift to a more-efficient America would take place, and how much it would cost. But the goal is to prod Americans to curb their energy consumption more sharply than they have since the early 1980s -- and more fundamentally than they have in the country's history.
By almost any measure, Americans lead the world in energy use. "We use so much energy, but we misuse it," Steven Chu, President Barack Obama's energy secretary, said in an interview.
Mr. Chu, a physicist, said the administration intends to use a combination of policy and rhetoric to convince Americans to use less energy. "There are various ways to alter behavior," he said.
Much of the administration's strategy relies on the power of education. As a candidate last year, Mr. Obama told Americans they could help curb energy use by keeping their car tires inflated. His comment drew derision from critics who noted that studies suggest proper tire inflation would trim energy use only marginally. Mr. Obama's response: Every little bit helps.
As president, Mr. Obama has proposed raising fuel-economy standards in cars. The new rules would promote technology like dashboard gauges that provide drivers a real-time readout of fuel economy.
Obama's Energy Bill Set Before the House1:07
President Obama urges the House of representatives to pass the energy bill, which was designed to combat carbon pollution threatening the planet. Video courtesy of Fox News.
The administration's plan to modernize the nation's electrical grid incorporates features to teach people how to live less wastefully. The proposed "smart" grid, for example, might include sensors in houses that could shut off the lights in an empty room or temporarily turn off an air conditioner if the grid were overloaded.
The administration's economic-stimulus plan includes a raft of new, energy-related tax breaks, including a $1,500 credit for consumers who upgrade the efficiency of their homes. Under a new program dubbed "cash for clunkers," car owners who trade in their old gas-guzzlers for new, more-efficient vehicles will get government money to help defray the expense.
Much of this shift would be funded by what amount to new charges on fossil-fuel consumption. As part of an energy bill endorsed by the administration, companies would have to buy permits to emit greenhouse gases such as carbon dioxide. Companies would pass on those costs to consumers in the form of higher energy prices, which are projected to increase on average by a couple of hundred dollars a year per household. Heavier users would pay more.
Raising prices is one of the most reliable ways to influence people's behavior, the administration has concluded. But breaking even small habits isn't easy.
In a bid to save electricity, Dallas lawyer and painter Arthur Blanchard earlier this year switched the light bulbs in his favorite reading lamp to compact fluorescents, the squiggly models that use a fraction of the power of the average incandescent bulb. It wasn't long before Mr. Blanchard, 82 years old, switched back to the old-style bulbs. The energy-efficient ones, he said, "just didn't give out enough light to read the paper by."
Write to Jeffrey Ball at jeffrey.ball@wsj.com
Carbon targets 'dangerously optimistic'
Felicity Carus
guardian.co.uk, Tuesday 23 June 2009 20.12 BST
A leading UK climate scientist yesterday warned MPs that the government's climate change policies are "dangerously optimistic".
Professor Kevin Anderson, the director of the Tyndall Centre for Climate Change Research, said the government's planned carbon cuts – if followed internationally – would have a "50-50 chance" of limiting the rise in global temperatures to 2C. This is the threshold that the EU defines as leading to dangerous climate change.
Anderson also said that the two government departments most directly involved with climate change policy were like "small dogs yapping at the heels" of more powerful departments, such as that run by the business secretary, Lord Mandelson.
He said that the Department of Energy and Climate Change (Decc), run by Ed Miliband, should be given more power.
Anderson was speaking to MPs on the environmental audit committee as part of an inquiry into the UK's carbon budgets. These are legally binding caps on emissions set over five years by the Committee on Climate Change (CCC), the independent body set up to advise the government on how big the cuts should be. In April the CCC's proposed cut of 34% by 2020 relative to 1990 levels was adopted by the chancellor in his budget, making Britain the first country in the world to pursue legally binding emissions reductions.
The CCC hopes that the government will adopt a higher intended budget (a 42% reduction in emissions by 2020) within the next two years, once a global deal on climate change has been agreed. But Anderson said that the UK should show leadership before the Copenhagen summit and raise the target to 40% now.
The top scientist's criticism will come as an unwelcome distraction to Decc ahead of the release of its "road to Copenhagen" strategy document on Friday. This will lay out what the government hopes to achieve at the UN climate negotiations in Copenhagen in December.
But Anderson said that without more ambitious action he feared that a significant deal at Copenhagen would not be achieved.
"No one I talk to thinks there is going to be anything significant to come out of Copenhagen," he said.
"We are going to come out and recover the deckchairs in preparation for moving them as the Titanic sinks. We're not even at the stage of rearranging them," he added.
He criticised CCC's carbon budget because it failed to adequately factor in emissions from food, deforestation, aviation and shipping and the manufacture of goods for the west.
Anderson said a commitment to a 40% cut by 2020 would help to press other countries into a stronger deal on a successor to the Kyoto protocol.
Anderson praised politicians for taking on the science of climate change, but accused them of letting policy be driven by political expediency rather than science.
A spokesperson for Decc said: "The UK will be pushing for the most ambitious deal possible at Copenhagen.
"We've already said that we'll look again at tightening our carbon budgets once an international agreement has been achieved."
guardian.co.uk, Tuesday 23 June 2009 20.12 BST
A leading UK climate scientist yesterday warned MPs that the government's climate change policies are "dangerously optimistic".
Professor Kevin Anderson, the director of the Tyndall Centre for Climate Change Research, said the government's planned carbon cuts – if followed internationally – would have a "50-50 chance" of limiting the rise in global temperatures to 2C. This is the threshold that the EU defines as leading to dangerous climate change.
Anderson also said that the two government departments most directly involved with climate change policy were like "small dogs yapping at the heels" of more powerful departments, such as that run by the business secretary, Lord Mandelson.
He said that the Department of Energy and Climate Change (Decc), run by Ed Miliband, should be given more power.
Anderson was speaking to MPs on the environmental audit committee as part of an inquiry into the UK's carbon budgets. These are legally binding caps on emissions set over five years by the Committee on Climate Change (CCC), the independent body set up to advise the government on how big the cuts should be. In April the CCC's proposed cut of 34% by 2020 relative to 1990 levels was adopted by the chancellor in his budget, making Britain the first country in the world to pursue legally binding emissions reductions.
The CCC hopes that the government will adopt a higher intended budget (a 42% reduction in emissions by 2020) within the next two years, once a global deal on climate change has been agreed. But Anderson said that the UK should show leadership before the Copenhagen summit and raise the target to 40% now.
The top scientist's criticism will come as an unwelcome distraction to Decc ahead of the release of its "road to Copenhagen" strategy document on Friday. This will lay out what the government hopes to achieve at the UN climate negotiations in Copenhagen in December.
But Anderson said that without more ambitious action he feared that a significant deal at Copenhagen would not be achieved.
"No one I talk to thinks there is going to be anything significant to come out of Copenhagen," he said.
"We are going to come out and recover the deckchairs in preparation for moving them as the Titanic sinks. We're not even at the stage of rearranging them," he added.
He criticised CCC's carbon budget because it failed to adequately factor in emissions from food, deforestation, aviation and shipping and the manufacture of goods for the west.
Anderson said a commitment to a 40% cut by 2020 would help to press other countries into a stronger deal on a successor to the Kyoto protocol.
Anderson praised politicians for taking on the science of climate change, but accused them of letting policy be driven by political expediency rather than science.
A spokesperson for Decc said: "The UK will be pushing for the most ambitious deal possible at Copenhagen.
"We've already said that we'll look again at tightening our carbon budgets once an international agreement has been achieved."
Environmentally friendly car trials start within weeks
The first of a fleet of 340 environmentally-friendly cars will take to the streets within weeks as part of the Government's plans to cut carbon emissions from road transport.
By David Millward, Transport Editor Published: 3:58PM BST 23 Jun 2009
They were unveiled as part of the biggest trial of plug-in technology ever to take place in the world.
Members of the public will be able to apply via the internet to lease more than 100 of the plug-in models included in the scheme, but to qualify they will also either need a garage or at least access to a power point to charge the vehicle.
In all £250 million of public money has been allocated to the scheme which, when it was announced in April, envisaged 50,000 vehicles being in everyday use on the country's roads.
With around 30 million cars in Britain, the impact of this fleet on the overall carbon footprint will be minimal, but the Government is hoping to secure the long term future of the motor industry by backing green - "ultra low carbon" - technology.
An array of vehicles were unveiled from sporty roadsters to vans and urban runabouts. The programme, which will run over the next 18 months, will see the cars tested by volunteers and businesses in a number of eight locations across the country.
These cars will be seen in the West Midlands, north east England, Oxford, Glasgow and several parts of London. Universities as well as car manufacturers and power companies are taking part in the experiment.
The experiment will include a fleet of 40 plug-in Minis, 100 electric powered Mercedes Smart Cars. There are also 21 electric sports cars available including models from the Lightning car company, Westfield and Delta Motorsport.
They, however, will be leased to "high profile individuals" who, like those leasing the more mundane models, will be expected to drive the cars every day.
Eventually, supporters of the project believe, that up to five million such cars could be on the roads, cutting Britain's transport carbon emissions by half.
Underpinning the project is the fact that a large number of car journeys are less than 30 miles and well within the range of the plug-in cars which could become commonplace in cities across the country in decades to come.
For longer distances, the more likely technology is the plug-in hybrid car which will use the electric mains to charge overnight but also have a petrol engine to enable the vehicle to cover longer distances.
They would include the Vauxhaull Ampera, a car which is earmarked for production at the company's plant at Ellesmere Port, Cheshire.
"Our aim is for ultra-low carbon vehicles to be an everyday feature of life on Britain's roads in less than five years," said Lord Adonis, the Transport Secretary.
" This is a challenging target and there is still a long way to go. However, if we continuing to work closely with motorists and the industry with initiatives like the demonstrations project, I believe it is achievable."
Meanwhile Lord Drayson , science minister, insisted that driving the cars would be enjoyable. "Low Carbon doesn't mean low performance. Modern electric cars offer power and bucket loads of torque."
By David Millward, Transport Editor Published: 3:58PM BST 23 Jun 2009
They were unveiled as part of the biggest trial of plug-in technology ever to take place in the world.
Members of the public will be able to apply via the internet to lease more than 100 of the plug-in models included in the scheme, but to qualify they will also either need a garage or at least access to a power point to charge the vehicle.
In all £250 million of public money has been allocated to the scheme which, when it was announced in April, envisaged 50,000 vehicles being in everyday use on the country's roads.
With around 30 million cars in Britain, the impact of this fleet on the overall carbon footprint will be minimal, but the Government is hoping to secure the long term future of the motor industry by backing green - "ultra low carbon" - technology.
An array of vehicles were unveiled from sporty roadsters to vans and urban runabouts. The programme, which will run over the next 18 months, will see the cars tested by volunteers and businesses in a number of eight locations across the country.
These cars will be seen in the West Midlands, north east England, Oxford, Glasgow and several parts of London. Universities as well as car manufacturers and power companies are taking part in the experiment.
The experiment will include a fleet of 40 plug-in Minis, 100 electric powered Mercedes Smart Cars. There are also 21 electric sports cars available including models from the Lightning car company, Westfield and Delta Motorsport.
They, however, will be leased to "high profile individuals" who, like those leasing the more mundane models, will be expected to drive the cars every day.
Eventually, supporters of the project believe, that up to five million such cars could be on the roads, cutting Britain's transport carbon emissions by half.
Underpinning the project is the fact that a large number of car journeys are less than 30 miles and well within the range of the plug-in cars which could become commonplace in cities across the country in decades to come.
For longer distances, the more likely technology is the plug-in hybrid car which will use the electric mains to charge overnight but also have a petrol engine to enable the vehicle to cover longer distances.
They would include the Vauxhaull Ampera, a car which is earmarked for production at the company's plant at Ellesmere Port, Cheshire.
"Our aim is for ultra-low carbon vehicles to be an everyday feature of life on Britain's roads in less than five years," said Lord Adonis, the Transport Secretary.
" This is a challenging target and there is still a long way to go. However, if we continuing to work closely with motorists and the industry with initiatives like the demonstrations project, I believe it is achievable."
Meanwhile Lord Drayson , science minister, insisted that driving the cars would be enjoyable. "Low Carbon doesn't mean low performance. Modern electric cars offer power and bucket loads of torque."
China suspends reforestation project over food shortage fears
Environmental restoration plan scrapped to grow crops as concerns increase over feeding world's largest population
Jonathan Watts, Beijing
guardian.co.uk, Tuesday 23 June 2009 17.11 BST
Food shortage fears have prompted the Chinese government to suspend the reforestation of marginal arable land, a senior government official said today .
The sacrifice of a key environmental restoration project for crop production highlights the growing problem of feeding the world's biggest population as cities expand into farmland and urban residents consume more meat and vegetables.
Lu Xinshe, deputy head of the ministry of land and resources, said the country was struggling to hold the 120 million hectare "red line" considered the minimum land areas needed for food self-sufficiency.
With industrialisation eating into the countryside, he said the government would halt plans to restore arable land to nature.
"We will not plan any new large scale projects to return farmland to its natural state, beyond those that have already been planned," he was quoted as saying by the Reuters news agency.
Any change in the balance of food production causes unease in a country where the elderly still remember the devastating famines of the early 1960s that killed between 15 million and 40 million people.
But the decision to halt many environmental restoration programmes is likely to have a knock-on effect. The government has been compensating farmers in the north and west of China to give up farmland as a central pillar of its strategy to fight desertification and water shortages. The end of ploughing helps stabilise the soil, while stopping irrigation alleviates water shortages.
Tree planting has also helped the country offset the increased emission of carbon dioxide from factories.
But food is the more immediate priority. By the end of last year, the amount of arable land in China had decreased to within 1% of the "red line."
Against the backdrop of rising global food prices, Chinese companies have bought the rights to farm swaths of land in the Philippines, Laos, Russia, and Kazakshstan. They have invested in biofuel crops in Zambia and the Congo. By one estimate there are now one million Chinese farmers in Africa.
But the government is committed to self-sufficiency, which requires the production of 500 million tonnes of grain a year. To maintain this level, prime minister Wen Jiabao has said the state would increase spending on agricultural production by 20%, well above inflation.
He has also asked advisers to recommend new areas where cultivation can be expanded. Among the areas suggested is the Sanjiang region in Heilongjiang, a protected wetland.
But as The Guardian reported last month, the pressure to industrialise the far western province of Xinjiang is likely to further erode food output, reducing the government's options. With industrialisation set to continue for decades, the shrinkage of land is likely to increase the pressure to use more fertiliser and genetically modified crops. A fifth of the nation's paddy fields now grow hybrid strains of rice, according to a report today by the Xinhua news agency.
Jonathan Watts, Beijing
guardian.co.uk, Tuesday 23 June 2009 17.11 BST
Food shortage fears have prompted the Chinese government to suspend the reforestation of marginal arable land, a senior government official said today .
The sacrifice of a key environmental restoration project for crop production highlights the growing problem of feeding the world's biggest population as cities expand into farmland and urban residents consume more meat and vegetables.
Lu Xinshe, deputy head of the ministry of land and resources, said the country was struggling to hold the 120 million hectare "red line" considered the minimum land areas needed for food self-sufficiency.
With industrialisation eating into the countryside, he said the government would halt plans to restore arable land to nature.
"We will not plan any new large scale projects to return farmland to its natural state, beyond those that have already been planned," he was quoted as saying by the Reuters news agency.
Any change in the balance of food production causes unease in a country where the elderly still remember the devastating famines of the early 1960s that killed between 15 million and 40 million people.
But the decision to halt many environmental restoration programmes is likely to have a knock-on effect. The government has been compensating farmers in the north and west of China to give up farmland as a central pillar of its strategy to fight desertification and water shortages. The end of ploughing helps stabilise the soil, while stopping irrigation alleviates water shortages.
Tree planting has also helped the country offset the increased emission of carbon dioxide from factories.
But food is the more immediate priority. By the end of last year, the amount of arable land in China had decreased to within 1% of the "red line."
Against the backdrop of rising global food prices, Chinese companies have bought the rights to farm swaths of land in the Philippines, Laos, Russia, and Kazakshstan. They have invested in biofuel crops in Zambia and the Congo. By one estimate there are now one million Chinese farmers in Africa.
But the government is committed to self-sufficiency, which requires the production of 500 million tonnes of grain a year. To maintain this level, prime minister Wen Jiabao has said the state would increase spending on agricultural production by 20%, well above inflation.
He has also asked advisers to recommend new areas where cultivation can be expanded. Among the areas suggested is the Sanjiang region in Heilongjiang, a protected wetland.
But as The Guardian reported last month, the pressure to industrialise the far western province of Xinjiang is likely to further erode food output, reducing the government's options. With industrialisation set to continue for decades, the shrinkage of land is likely to increase the pressure to use more fertiliser and genetically modified crops. A fifth of the nation's paddy fields now grow hybrid strains of rice, according to a report today by the Xinhua news agency.
Haulage lobby plans to force 'megatrucks' on to Britain's road
Larger trucks reduce congestion and pollution, industry claims, as EU considers introduction of 'road trains' across Europe
John Vidal, environment editor
guardian.co.uk, Tuesday 23 June 2009 09.00 BST
The powerful European road lobby plans to force Britain and other countries to accept some of the world's biggest trucks on the grounds that they will reduce traffic congestion and be less polluting.
The "megatrucks" would be more than 80ft (25.2m) long and weigh 60 tonnes, nearly a third longer and heavier than any vehicle allowed on British roads at present. The trucks would probably tow several trailers and effectively be "road trains".
Details are contained in a new research paper for the European commission (EC), which is expected to lead to proposals for a binding European directive in 2010.
Megatrucks, which can have as many as 10 axles and weigh more than a Boeing 737, are only allowed in the sparsely populated and flat nations of Finland and Sweden and are not permitted to travel across borders. But the Netherlands, Belgium and Denmark are running tests and France is keen to begin trials.
Former transport secretary Ruth Kelly rejected the trucks last year after a study which concluded that they were unsuitable for British roads. "Not only are there clear environmental drawbacks, but such vehicles would be unsuitable for many roads and junctions, while providing the infrastructure to accommodate them would require substantial investment," she said.
But a commission source confirmed to the Guardian that a transport directive was being planned which would eventually lead to their introduction across Europe. "The EC is moving in this direction. Many states want them. There is pressure for a new directive. The intention is to study the issue further and move towards a directive next year," he said.
The European road lobby, led by haulage companies in the Netherlands, is strongly pressing for them to be introduced because studies show they are 15-30% cheaper to run than normal HGV trucks per unit of freight. The lobby is eager to claw back cargo that has been diverted to railways and argues that megatrucks are more environmentally friendly than rail.
"Megatrucks could significantly reduce the number of trucks on roads. Standard trucks emit more than three times as much carbon dioxide and about 2.9 times as much nitrogen oxide per unit of freight as an average freight train," says the research paper. It added that one third of all articulated lorry trips could be suitable for megatrucks.
Studies have been divided over the costs and benefits of megatrucks. One Dutch report predicted lower fuel consumption and CO2 emissions, as well as a fall in fatal accidents. But other research suggests the opposite. There is little doubt, however, that the lower cost would move freight off railways and that large investments would be needed to strengthen roads and bridges. Increased noise pollution would also occur, partly due to the greater number of axles.
Opponents of megatrucks are supported by the UK transport research laboratory and the German environmental agency which both concluded last year that they would be environmentally damaging. "On the whole, megatrucks do not contribute towards sustainable development of freight transport. Their use relieves neither the environment nor road infrastructure. On the contrary, additional risks to road safety have to be expected as well as the environmentally unfavourable shifting of freight transport to the road," the German agency concluded.
"We're very concerned about mega-trucks," said Tony Armstrong, the chief executive of Living Streets, formerly the Pedestrians' Association. "This proposal could have a huge negative impact on road safety . These monsters will cause alarm to residents. Any proposals to bring these trucks to the UK should be strongly resisted".
Even motoring organisations expressed concern: "British drivers feel intimidated by large lorries. They will not be welcome on UK roads. One problem is that they may obscure signs," said Paul Watters, AA head of roads policy.
But the Road Haulage Association said that the move to longer, heavier vehicles was already happening in Europe. "They are part of the future. In the meantime, longer trailers would make a big difference," said a spokewoman.
John Vidal, environment editor
guardian.co.uk, Tuesday 23 June 2009 09.00 BST
The powerful European road lobby plans to force Britain and other countries to accept some of the world's biggest trucks on the grounds that they will reduce traffic congestion and be less polluting.
The "megatrucks" would be more than 80ft (25.2m) long and weigh 60 tonnes, nearly a third longer and heavier than any vehicle allowed on British roads at present. The trucks would probably tow several trailers and effectively be "road trains".
Details are contained in a new research paper for the European commission (EC), which is expected to lead to proposals for a binding European directive in 2010.
Megatrucks, which can have as many as 10 axles and weigh more than a Boeing 737, are only allowed in the sparsely populated and flat nations of Finland and Sweden and are not permitted to travel across borders. But the Netherlands, Belgium and Denmark are running tests and France is keen to begin trials.
Former transport secretary Ruth Kelly rejected the trucks last year after a study which concluded that they were unsuitable for British roads. "Not only are there clear environmental drawbacks, but such vehicles would be unsuitable for many roads and junctions, while providing the infrastructure to accommodate them would require substantial investment," she said.
But a commission source confirmed to the Guardian that a transport directive was being planned which would eventually lead to their introduction across Europe. "The EC is moving in this direction. Many states want them. There is pressure for a new directive. The intention is to study the issue further and move towards a directive next year," he said.
The European road lobby, led by haulage companies in the Netherlands, is strongly pressing for them to be introduced because studies show they are 15-30% cheaper to run than normal HGV trucks per unit of freight. The lobby is eager to claw back cargo that has been diverted to railways and argues that megatrucks are more environmentally friendly than rail.
"Megatrucks could significantly reduce the number of trucks on roads. Standard trucks emit more than three times as much carbon dioxide and about 2.9 times as much nitrogen oxide per unit of freight as an average freight train," says the research paper. It added that one third of all articulated lorry trips could be suitable for megatrucks.
Studies have been divided over the costs and benefits of megatrucks. One Dutch report predicted lower fuel consumption and CO2 emissions, as well as a fall in fatal accidents. But other research suggests the opposite. There is little doubt, however, that the lower cost would move freight off railways and that large investments would be needed to strengthen roads and bridges. Increased noise pollution would also occur, partly due to the greater number of axles.
Opponents of megatrucks are supported by the UK transport research laboratory and the German environmental agency which both concluded last year that they would be environmentally damaging. "On the whole, megatrucks do not contribute towards sustainable development of freight transport. Their use relieves neither the environment nor road infrastructure. On the contrary, additional risks to road safety have to be expected as well as the environmentally unfavourable shifting of freight transport to the road," the German agency concluded.
"We're very concerned about mega-trucks," said Tony Armstrong, the chief executive of Living Streets, formerly the Pedestrians' Association. "This proposal could have a huge negative impact on road safety . These monsters will cause alarm to residents. Any proposals to bring these trucks to the UK should be strongly resisted".
Even motoring organisations expressed concern: "British drivers feel intimidated by large lorries. They will not be welcome on UK roads. One problem is that they may obscure signs," said Paul Watters, AA head of roads policy.
But the Road Haulage Association said that the move to longer, heavier vehicles was already happening in Europe. "They are part of the future. In the meantime, longer trailers would make a big difference," said a spokewoman.
German village pioneers energy-saving 'dial-a-light' scheme
Mobile phones act as remote control for streetlights in scheme by German village to cut energy bills and emissions
Kate Connolly in Berlin
guardian.co.uk, Tuesday 23 June 2009 14.18 BST
It can be a music player, a camera, a navigator and now, in the spirit of saving the planet, the mobile phone has been turned into a remote control for street lights in a village in central Germany.
In an effort to cut energy bills, residents in Dörentrup , 60 miles from Hanover, have been given the ability to turn the village lamps on as and when they need them, just by making a call.
The village has trialled the so-called Dial4Light scheme on several of its streets for a year and because of its success now plans to roll it out to the entire settlement, as well as further afield.
All 9,000 residents of Dörentrup can register their details for the free system. They can then make a phone call, entering the code number displayed on a lamp post, which triggers the lights to go on within seconds. They stay on for up to 15 minutes before automatically switching off.
Dörentrup's mayor said the scheme aimed first and foremost to save money but was also a useful way of raising the community's awareness of how they used energy.
"We're doing this for the sake of saving costs," mayor Friedrich Ehlert told the Süddeutsche Zeitung. "But we also want to do our bit to protect the environment and take care of the climate. In this, the community should be held accountable just like every private individual."
The project came into being after the village council made the unpopular decision several years ago to turn out the lights at night because it could no longer afford the electricity bill. A frustrated local resident came up with the idea to allow the lights to be available on demand.
"We took his idea very seriously," said Bernd Klemme from the county council in Lemgo, which developed the system with the help of experts and secured a patent for it.
"We developed a special modem and a software allowing every registered user the ability to control the lights," he said.
Data collected by the council shows that the Dial4Light will lead to an annual reduction in the community's carbon dioxide emissions of almost 20 tonnes – the equivalent of the emissions of 11 four-person households.
Publicity generated during the pilot stage of the project prompted inquiries to the Lemgo authorities from numerous European countries as well as Saudi Arabia, Japan, India and the US. Later this month Lemgo will launch the Dial4Light system internationally.
Kate Connolly in Berlin
guardian.co.uk, Tuesday 23 June 2009 14.18 BST
It can be a music player, a camera, a navigator and now, in the spirit of saving the planet, the mobile phone has been turned into a remote control for street lights in a village in central Germany.
In an effort to cut energy bills, residents in Dörentrup , 60 miles from Hanover, have been given the ability to turn the village lamps on as and when they need them, just by making a call.
The village has trialled the so-called Dial4Light scheme on several of its streets for a year and because of its success now plans to roll it out to the entire settlement, as well as further afield.
All 9,000 residents of Dörentrup can register their details for the free system. They can then make a phone call, entering the code number displayed on a lamp post, which triggers the lights to go on within seconds. They stay on for up to 15 minutes before automatically switching off.
Dörentrup's mayor said the scheme aimed first and foremost to save money but was also a useful way of raising the community's awareness of how they used energy.
"We're doing this for the sake of saving costs," mayor Friedrich Ehlert told the Süddeutsche Zeitung. "But we also want to do our bit to protect the environment and take care of the climate. In this, the community should be held accountable just like every private individual."
The project came into being after the village council made the unpopular decision several years ago to turn out the lights at night because it could no longer afford the electricity bill. A frustrated local resident came up with the idea to allow the lights to be available on demand.
"We took his idea very seriously," said Bernd Klemme from the county council in Lemgo, which developed the system with the help of experts and secured a patent for it.
"We developed a special modem and a software allowing every registered user the ability to control the lights," he said.
Data collected by the council shows that the Dial4Light will lead to an annual reduction in the community's carbon dioxide emissions of almost 20 tonnes – the equivalent of the emissions of 11 four-person households.
Publicity generated during the pilot stage of the project prompted inquiries to the Lemgo authorities from numerous European countries as well as Saudi Arabia, Japan, India and the US. Later this month Lemgo will launch the Dial4Light system internationally.
Eco-homes show way forward
Published Date: 24 June 2009
By JOHN ROSS
A PIONEERING energy-efficient housing scheme in the Highlands could be a model for other projects across the country, according to the government.
Alex Neil, the minister for housing and communities, yesterday visited Scotland's first development of New Energy Homes (NEH), being showcased at Tarbat Park, Kildary, in Easter Ross.The NEH concept, developed by the not-for-profit Highland Housing Alliance, uses technology and construction methods previously available only for one-off architect-designed homes.It is felt it could offer developers and public-sector organisations across the UK a chance to create affordable eco-homes.Backed by Scottish Government funding of £300,000, the development of 17 factory- assembled homes have been erected in a fraction of the traditional build time.Each house features renewable heat-pump technology, under-floor heating, roof insulation, good ventilation and low-energy windows. Built by Tulloch Homes, they are some of the first homes in the UK to use Scotframe's SupaWall insulation, which reduces air leakage, prevents draughts and helps to maintain a steady temperature.Information about energy use in the houses will be collected and analysed over two years. Mr Neil said: "At a time when families across Scotland are feeling the pinch, this type of development points the way forward for more energy-efficient, cost-saving homes."Scottish companies are at the forefront of technology, and this could be a blueprint for developments across the country."Susan Torrance, the HHA chief executive, said the Kildary scheme was cost-effective, fast to construct and highly energy-efficient
By JOHN ROSS
A PIONEERING energy-efficient housing scheme in the Highlands could be a model for other projects across the country, according to the government.
Alex Neil, the minister for housing and communities, yesterday visited Scotland's first development of New Energy Homes (NEH), being showcased at Tarbat Park, Kildary, in Easter Ross.The NEH concept, developed by the not-for-profit Highland Housing Alliance, uses technology and construction methods previously available only for one-off architect-designed homes.It is felt it could offer developers and public-sector organisations across the UK a chance to create affordable eco-homes.Backed by Scottish Government funding of £300,000, the development of 17 factory- assembled homes have been erected in a fraction of the traditional build time.Each house features renewable heat-pump technology, under-floor heating, roof insulation, good ventilation and low-energy windows. Built by Tulloch Homes, they are some of the first homes in the UK to use Scotframe's SupaWall insulation, which reduces air leakage, prevents draughts and helps to maintain a steady temperature.Information about energy use in the houses will be collected and analysed over two years. Mr Neil said: "At a time when families across Scotland are feeling the pinch, this type of development points the way forward for more energy-efficient, cost-saving homes."Scottish companies are at the forefront of technology, and this could be a blueprint for developments across the country."Susan Torrance, the HHA chief executive, said the Kildary scheme was cost-effective, fast to construct and highly energy-efficient
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