Despite Ed Milliband's boasts, clean energy investments from the likes of Virgin and HSBC have bombed over the past 12 months
Cooper on Cash
To hear the government talk last week, you would think investing in clean energy was a sure-fire route to riches despite the recession.
Energy secretary Ed Miliband said Britain will double the share of its electricity generated from low-carbon sources by 2020. Of that, the proportion generated by renewable sources such as wind, solar and wave power will go up from today’s 6% to 30%.
The government believes the low-carbon sector will be one of the few areas of the economy that will grow during the recession and beyond, expanding at more than 4% each year up to 2014-15. Governments around the world have pledged $350 billion (£213 billion) to climate-related investments since the credit crunch began in a bid to boost their economies, according to figures from HSBC Climate Change Research.
Why, then, has clean energy been quite such a lousy investment? HSBC’s climate change index has slumped 38.6% over the past 12 months, despite the billions pledged to the sector. Some popular funds have performed nearly as badly. Virgin’s climate change fund, launched at the start of 2008, has dropped 36%. Even Black Rock New Energy investment trust has dropped 35%, although over five years it’s up nearly 85%.
So what has been going on? First, sceptical investors need to be sure governments will deliver. In the US, clean energy companies have only just started to claim their share of Obama’s stimulus package, and the money should start coming through in the final quarter of this year and into 2010.
Meanwhile, in Europe, the authorities have only just legislated to increase the proportion of energy supplied by renewables to 20% by 2020 — something they have been talking about for years. Even then, with the debt markets still closed due to the credit crunch, firms have been unable to raise funding for the big projects required to get that wind or wave farm off the ground. Another, perhaps even bigger, problem is that clean-energy stocks are simply growth stocks with a green hue — and investors haven’t wanted to go anywhere near those in the downturn.
Marketeers can dress up climate change however they want, but like several fads before it — technology, China, commodities — these sectors are inextricably linked with the business cycle. They will go up sharply when everyone is feeling positive and down when everyone fears the Great Depression.
Finally, there’s the oil price. When it’s high, it’s worth investing in the development of alternatives; when it’s low, the incentive disappears. So a bet on green technology is essentially a bet on crude.
That’s not to say there aren’t reasons to invest in the sector long term. As Robin Batchelor, manager of the Black Rock New Energy trust, said: “I don’t know of any other sector that has government-mandated growth targets.” However, it does mean you should not expect to make easy money.
Simon Webber, manager at Schroders’ climate change fund, said: “Some clean-energy sectors had become overvalued, which is why last year we generally didn’t own solar stocks, and have been selling some overhyped electric vehicle stocks.”
On the other hand, the energy efficiency sector has gained 16% this year against a gain of 4.2% in the HSBC climate change index and 6.7% for global equities. Energy efficiency has also been the biggest recipient of stimulus cash, taking 50% of the $350 billion earmarked.
Energy-efficiency stocks, which include British insulation supplier SIG, are now trading at a 20% premium to the climate change index, according to HSBC, but it believes this is justified. “With energy efficiency, there is no wrong option,” said Joaquim de Lima, climate change analyst at the bank.
And while in the UK wind power is proving a big disappointment, with turbine maker Vestas last week announcing it would close down its Isle of Wight factory with the loss of 600 jobs, the sector is going from strength to strength in other countries, particularly America. That’s why Batchelor holds stocks such as Vestas and fellow turbine maker Iberdrola.
The government’s announcement that it will publish a list of five options for exploiting tidal power in the Severn estuary, including a £21 billion 10-mile barrage from Weston-super-Mare to Cardiff , could benefit UK company Pelamis — but it is private.
When you have to search this hard for British companies that will benefit from our own government's funding, it’s clear green energy is far from a pot of gold. It’s telling that none of the mainstream managers has big holdings in climate change. If you're keen to get in, though, Black Rock or Schroders get advisers’ votes.
Kathryn Cooper is editor of the Money section
Sunday, 19 July 2009
Government admits marine power fund has run aground
Plans undermined by admissions that it has not handed out any of a £50m marine development fund set up in 2004
Terry Macalister
The Observer, Sunday 19 July 2009
Government promises that it would establish Britain as a global centre for tidal and wave power have been undermined by admissions that it has not handed out any of a £50m marine development fund set up in 2004.
Companies have often complained that the rules for the Marine Renewable Deployment Fund (MRDF) are so demanding that they have struggled to get money from the Department of Energy and Climate Change (DECC) to develop prototypes.
"As yet there have been no projects which have met the necessary requirements [of the MRDF]," the department told the Observer, but it insisted that changes made in the government's renewable energy strategy, published last week, would transform the situation.
A new Marine Renewables Proving Fund of £22m has been set aside to help marine power companies reach the stage where they would be eligible for MRDF money. The fund requires companies to demonstrate their prototype power systems have operated for at least three months before they can receive money.
Companies argued they needed funding earlier and the DECC has finally agreed. The department has also sought to make up ground by pumping £9.5m into the trial Wave Hub wave power system off Cornwall plus £8m for the European Marine Energy Centre in the Orkneys.
In addition the marine power sector should benefit from £10m being put into the south-west, which is the UK's first low-carbon economic area.
Terry Macalister
The Observer, Sunday 19 July 2009
Government promises that it would establish Britain as a global centre for tidal and wave power have been undermined by admissions that it has not handed out any of a £50m marine development fund set up in 2004.
Companies have often complained that the rules for the Marine Renewable Deployment Fund (MRDF) are so demanding that they have struggled to get money from the Department of Energy and Climate Change (DECC) to develop prototypes.
"As yet there have been no projects which have met the necessary requirements [of the MRDF]," the department told the Observer, but it insisted that changes made in the government's renewable energy strategy, published last week, would transform the situation.
A new Marine Renewables Proving Fund of £22m has been set aside to help marine power companies reach the stage where they would be eligible for MRDF money. The fund requires companies to demonstrate their prototype power systems have operated for at least three months before they can receive money.
Companies argued they needed funding earlier and the DECC has finally agreed. The department has also sought to make up ground by pumping £9.5m into the trial Wave Hub wave power system off Cornwall plus £8m for the European Marine Energy Centre in the Orkneys.
In addition the marine power sector should benefit from £10m being put into the south-west, which is the UK's first low-carbon economic area.
Green dream runs low on power
The closure of a turbine plant on the Isle of Wight is symbolic of a dangerously becalmed renewables sector. By Terry Macalister
Terry Macalister
The Observer, Sunday 19 July 2009
It was barely 18 months ago that council leaders on the Isle of Wight announced they had drawn up plans to become the world's first "eco-island", to be powered entirely by renewable energy.
The small island would become self-sufficient and even an exporter of low-carbon power, local politicians boasted. They pointed out that it was already home to Vestas Blades, the UK subsidiary of the largest wind turbine manufacturer in the world.
But Vestas's totemic manufacturing plant at Newport is set to close at the end of this month with the loss of 600 jobs, puncturing the Isle of Wight's green dream and raising serious questions about last week's promises from the government that the wider green revolution will create 1.2 million jobs in the low carbon sector by 2020.
Ed Miliband, the energy and climate change secretary, argued in last Wednesday's renewable energy strategy presentation that employment opportunities would soar as Britain geared up its wind and renewables sector to provide 30% of all electricity within 10 years.
"Tackling climate change is about more than just averting environmental disaster. It can create a better kind of society and a stronger and more sustainable economy," he said.
His department is targeting not only offshore wind but also a range of other sectors including the nuclear supply chain, low-carbon chemicals and a range of goods and services around carbon trading. The City of London already holds a global leadership position as a carbon trading centre but its dominance is expected to come under threat from New York and Chicago as the US adopts a "cap and trade" scheme.
Opportunities for green jobs in the automotive sector will be highlighted tomorrow when Nissan unveils a line of cleaner vehicles. Toyota has also revealed plans to construct a range of hybrid petrol-electric cars at its plant in Derbyshire, but these initiatives constitute a "transfer" of jobs to the low-carbon sector rather than a net increase in employment.
The Carbon Trust, an independent agency established by the government to further the green agenda, argues that Britain is well placed to become a global leader in both offshore wind and wave power. But efforts to capitalise on opportunities in the wind power industry have been very slow - so slow that Vestas could no longer wait for orders to arrive.
The UK currently produces only 5% of its electricity from renewables, one of the lowest rates in Europe, but even the 2,300 turbines erected onshore so far - plus 200 more offshore - have brought relatively little work to Britain. Almost all those turbine orders have gone to Denmark and Germany, while the demise of the Vestas plant in the UK follows the earlier financial collapse of a turbine plant on the Mull of Kintyre.
Vestas has declined to comment on its problems but the British Wind Energy Association says local suppliers "missed the bus" during the onshore turbine boom because industry progress was so uneven and unpredictable - due to planning and other delays - that few saw it as a steady source of business that was worth catering for.
"We estimate that there are 5,000 people in Britain employed in the wind industry, which compares with 20,000 in Denmark, 30,000 in Spain and 80,000 in Germany," says Charles Anglin, an official at the BWEA. But he is confident that measures taken by Miliband to speed up the planning, grid connections and subsidy regime now offer a real opportunity for change.
"We do believe we could create 60,000 jobs within 10 years as round three [of offshore wind licensing] means up to 25,000 megawatts of new capacity could be brought onstream, representing around £75bn of new investment, if you include grid connections," he says.
An American company, Clipper Windpower, is already developing the world's largest turbine at a facility in Blyth, Northumberland, that will be used in the North Sea. If successful, Clipper could develop a manufacturing plant there.
The Confederation of British Industry is also convinced that the UK really does have "big opportunities" to create green jobs in future. It is spending the summer trying to work out how many jobs might be transferred from "smokestack" sectors in decline, such as the North Sea oil and gas industry.
But Neil Bentley, director of business environment at the CBI, notes that 4% of low-carbon investment in 2008 went to Britain, compared with 34% to the US. He says: "If we want sovereign wealth funds, private equity and even pension funds to put their money here and create jobs, we must tackle barriers to investment such as [wind project] planning delays."
Miliband has said very clearly that Britain is open for green business, but the Isle of Wight has discovered to its cost that actions, not words, make turbines turn.
Terry Macalister
The Observer, Sunday 19 July 2009
It was barely 18 months ago that council leaders on the Isle of Wight announced they had drawn up plans to become the world's first "eco-island", to be powered entirely by renewable energy.
The small island would become self-sufficient and even an exporter of low-carbon power, local politicians boasted. They pointed out that it was already home to Vestas Blades, the UK subsidiary of the largest wind turbine manufacturer in the world.
But Vestas's totemic manufacturing plant at Newport is set to close at the end of this month with the loss of 600 jobs, puncturing the Isle of Wight's green dream and raising serious questions about last week's promises from the government that the wider green revolution will create 1.2 million jobs in the low carbon sector by 2020.
Ed Miliband, the energy and climate change secretary, argued in last Wednesday's renewable energy strategy presentation that employment opportunities would soar as Britain geared up its wind and renewables sector to provide 30% of all electricity within 10 years.
"Tackling climate change is about more than just averting environmental disaster. It can create a better kind of society and a stronger and more sustainable economy," he said.
His department is targeting not only offshore wind but also a range of other sectors including the nuclear supply chain, low-carbon chemicals and a range of goods and services around carbon trading. The City of London already holds a global leadership position as a carbon trading centre but its dominance is expected to come under threat from New York and Chicago as the US adopts a "cap and trade" scheme.
Opportunities for green jobs in the automotive sector will be highlighted tomorrow when Nissan unveils a line of cleaner vehicles. Toyota has also revealed plans to construct a range of hybrid petrol-electric cars at its plant in Derbyshire, but these initiatives constitute a "transfer" of jobs to the low-carbon sector rather than a net increase in employment.
The Carbon Trust, an independent agency established by the government to further the green agenda, argues that Britain is well placed to become a global leader in both offshore wind and wave power. But efforts to capitalise on opportunities in the wind power industry have been very slow - so slow that Vestas could no longer wait for orders to arrive.
The UK currently produces only 5% of its electricity from renewables, one of the lowest rates in Europe, but even the 2,300 turbines erected onshore so far - plus 200 more offshore - have brought relatively little work to Britain. Almost all those turbine orders have gone to Denmark and Germany, while the demise of the Vestas plant in the UK follows the earlier financial collapse of a turbine plant on the Mull of Kintyre.
Vestas has declined to comment on its problems but the British Wind Energy Association says local suppliers "missed the bus" during the onshore turbine boom because industry progress was so uneven and unpredictable - due to planning and other delays - that few saw it as a steady source of business that was worth catering for.
"We estimate that there are 5,000 people in Britain employed in the wind industry, which compares with 20,000 in Denmark, 30,000 in Spain and 80,000 in Germany," says Charles Anglin, an official at the BWEA. But he is confident that measures taken by Miliband to speed up the planning, grid connections and subsidy regime now offer a real opportunity for change.
"We do believe we could create 60,000 jobs within 10 years as round three [of offshore wind licensing] means up to 25,000 megawatts of new capacity could be brought onstream, representing around £75bn of new investment, if you include grid connections," he says.
An American company, Clipper Windpower, is already developing the world's largest turbine at a facility in Blyth, Northumberland, that will be used in the North Sea. If successful, Clipper could develop a manufacturing plant there.
The Confederation of British Industry is also convinced that the UK really does have "big opportunities" to create green jobs in future. It is spending the summer trying to work out how many jobs might be transferred from "smokestack" sectors in decline, such as the North Sea oil and gas industry.
But Neil Bentley, director of business environment at the CBI, notes that 4% of low-carbon investment in 2008 went to Britain, compared with 34% to the US. He says: "If we want sovereign wealth funds, private equity and even pension funds to put their money here and create jobs, we must tackle barriers to investment such as [wind project] planning delays."
Miliband has said very clearly that Britain is open for green business, but the Isle of Wight has discovered to its cost that actions, not words, make turbines turn.
How can wind turbines generate so much lunacy?
To meet our peak demand of 56 gigawatts of electricity would require 112,000 turbines covering 11,000 square miles, or an eighth of Britain's entire land area, says Christopher Booker.
By Christopher BookerPublished: 5:48PM BST 18 Jul 2009
It would be hard to beat the sad gullibility with which the media last week reported the plans of Lord Mandelson and our Climate Change Secretary Ed Miliband to cover our countryside and sea with 10,000 more huge wind turbines. According to one newspaper, it would need "an area of only 70 square miles to generate Britain's total power requirements".
Well, no, actually. To meet our peak demand of 56 gigawatts of electricity would require 112,000 turbines covering 11,000 square miles, or an eighth of Britain's entire land area.
Another newspaper solemnly reported that a new study shows that "a well-placed turbine could make enough energy to power 825,000 homes". Well, no, actually. The figure for a single 2 megawatt turbine would be just 825 homes, meaning that the newspaper was only 100,000 per cent wrong.
Even more alarming than the media's credulity is that of the ministers themselves, in seriously trying to pretend that their £100 billion dream of building three giant turbines every day between now and 2020 has the faintest practical hope of being realised, let alone that it would serve any useful purpose to do so.
Most alarming of all, however, in the desperation to reach EU "renewables" target, is the setting up of a new Infrastructure Planning Commission to force through thousands of these absurd objects over the wishes of local people and councils, who are now to be robbed of any right of appeal. Last week a Government inspector threw out a highly unpopular scheme for seven turbines in Shropshire which would have generated £43 million in subsidies alone for its owners over the next 25 years. The surrounding community was delighted. From next March, however, thanks to Lord Mandelson's all-powerful new Commission, such inquiries will be a thing of the past, thrown onto the scrapheap of history along with much of the rest of our democracy, We will no longer have any right to oppose this tsunami of lunacy, until our countryside is ruined to no rational purpose whatever.
By Christopher BookerPublished: 5:48PM BST 18 Jul 2009
It would be hard to beat the sad gullibility with which the media last week reported the plans of Lord Mandelson and our Climate Change Secretary Ed Miliband to cover our countryside and sea with 10,000 more huge wind turbines. According to one newspaper, it would need "an area of only 70 square miles to generate Britain's total power requirements".
Well, no, actually. To meet our peak demand of 56 gigawatts of electricity would require 112,000 turbines covering 11,000 square miles, or an eighth of Britain's entire land area.
Another newspaper solemnly reported that a new study shows that "a well-placed turbine could make enough energy to power 825,000 homes". Well, no, actually. The figure for a single 2 megawatt turbine would be just 825 homes, meaning that the newspaper was only 100,000 per cent wrong.
Even more alarming than the media's credulity is that of the ministers themselves, in seriously trying to pretend that their £100 billion dream of building three giant turbines every day between now and 2020 has the faintest practical hope of being realised, let alone that it would serve any useful purpose to do so.
Most alarming of all, however, in the desperation to reach EU "renewables" target, is the setting up of a new Infrastructure Planning Commission to force through thousands of these absurd objects over the wishes of local people and councils, who are now to be robbed of any right of appeal. Last week a Government inspector threw out a highly unpopular scheme for seven turbines in Shropshire which would have generated £43 million in subsidies alone for its owners over the next 25 years. The surrounding community was delighted. From next March, however, thanks to Lord Mandelson's all-powerful new Commission, such inquiries will be a thing of the past, thrown onto the scrapheap of history along with much of the rest of our democracy, We will no longer have any right to oppose this tsunami of lunacy, until our countryside is ruined to no rational purpose whatever.
Can you really make going green pay off?
Under plans to tackle climate change, generating power is an expensive exercise, but there are ways to save energy and cash
Jessica Bown
Energy bills could rise by £250 a year in the next decade under plans to tackle climate change, it was revealed last week.
The government’s renewable energy strategy, announced by Ed Miliband, the energy secretary, aims to cut greenhouse gases by more than a third by 2020, partly by boosting the amount of power from renewable sources from 6% to 30%. However, the cost of the switch could add as much as £250 to annual bills.
The government tried to soften the blow by suggesting that the rises would be offset by energy-efficiency savings, meaning typical consumers would be only £77 a year worse off.
Miliband has also announced a series of measures that should make it easier for households to go green. Under the plans, 1.5m homes will be encouraged to create their own power through a “clean energy cashback” system, under which they would be paid for any power they produce.
About 7m already qualify for grants for energy makeovers, which the government claims will offer substantial savings on bills. We look at the measures.
Generating your own
The government wants to encourage households to generate energy using solar panels or wind turbines. Several energy companies already pay households for excess energy they generate, called “feed-in tariffs” but rates vary widely.
British Gas pays only 5p a kilowatt hour, while others pay up to 15p. The government, therefore, wants all suppliers to have a standard fixed rate that will enable consumers to work out how much they could make. Even with the highest rates, however, it could take nearly 20 years to recoup the cost of installing micro-generation in your home, according to figures from comparison site Confused.com.
Green energy provider Good Energy currently offers the best ‘buyback’ scheme with its Home Gen tariff, which pays 15p for each unit generated. To qualify, you will need a microgeneration tool such as a wind turbine or solar panels and an export generator or total generation meter.
If you invested £12,500 in a wind turbine the height of a telegraph pole and generated the average 3,300 kWh of energy, you would never recoup your investment through selling energy. If, however, you generated the maximum 5,000 kilowatts, you would cover your own energy needs, saving about £410 based on the average annual electricity bill. You would also make enough to sell back to the grid, netting £251 a year — a total of nearly £662. This would mean you would recoup your investment in nearly 19 years. Gareth Kloet of Confused said: “Even 19 years is probably enough to dissuade all but the greenest of homeowners from the microgeneration path unless the government comes up with more incentives.”
Energy efficiency
More straightforward energy efficiency measures can be just as effective. For example, insulating your loft would cost £500 without a grant or £250 with, but you would save £150 a year if you had no insulation already, said the Energy Saving Trust.
Anyone over 60 or in receipt of certain benefits, such as disability living allowance, can already apply to the government for grants of up to £2,700 to help with the cost of green home improvements.
You do not have to be financially vulnerable, though. Gas and electricity suppliers also run grant schemes that can cut the cost of measures such as loft or cavity-wall insulation by hundreds of pounds.
The UK Green Building Council will also propose a “pay as you save” scheme in the coming weeks, in which you borrow money from a local council via your energy company to cover the upfront costs of making your home energy efficient. It would be repaid out of the reduction in your fuel bills. The charge will be linked to the property, not the individual, so if you move house, it will stay with the new owner.
Even with low or even zero-interest rates, it could take some time to make back the upfront costs. The Committee on Climate Change calculates the owner of a three-bedroom Victorian end-of-terrace home, with three exposed walls, could expect to spend £10,280 on a package of energy-saving measures, including a new boiler. Even with 0% interest, this would cost £514 a year in repayments over 20 years. The energy savings would total £802 — making them £288 a year better off.
If, however, they spent £32,180 on a top-of-the-range energy-efficiency package with deluxe double glazing, insulation on all external walls, solar panels and a ground-source heat pump, this would cost £1,609 a year in repayments over 20 years. The savings on their annual bills would be only £1,400, but the alterations could add value to their home.
There are already green loans available for energy-efficient improvements. The Co-operative Bank, for example, charges only 1.54% on additional borrowing of up to £20,000 for green home modifications, while Ecology building society offers discounts on its standard rate of 4.65%.
You must have a standard home loan with each lender to qualify for these deals. The Co-operative Bank is offering a five-year fixed-rate deal at 4.99% with a £995 arrangement fee, while Ecology always lends at its standard rate — 4.65% — with discounts varying according to your plan’s environmental benefits.
Richard Morea of L&C Mortgages, a broker, said: “We would advise environmentally-minded borrowers to find the best possible mortgage deal and put the savings to ecological use instead.”
Jessica Bown
Energy bills could rise by £250 a year in the next decade under plans to tackle climate change, it was revealed last week.
The government’s renewable energy strategy, announced by Ed Miliband, the energy secretary, aims to cut greenhouse gases by more than a third by 2020, partly by boosting the amount of power from renewable sources from 6% to 30%. However, the cost of the switch could add as much as £250 to annual bills.
The government tried to soften the blow by suggesting that the rises would be offset by energy-efficiency savings, meaning typical consumers would be only £77 a year worse off.
Miliband has also announced a series of measures that should make it easier for households to go green. Under the plans, 1.5m homes will be encouraged to create their own power through a “clean energy cashback” system, under which they would be paid for any power they produce.
About 7m already qualify for grants for energy makeovers, which the government claims will offer substantial savings on bills. We look at the measures.
Generating your own
The government wants to encourage households to generate energy using solar panels or wind turbines. Several energy companies already pay households for excess energy they generate, called “feed-in tariffs” but rates vary widely.
British Gas pays only 5p a kilowatt hour, while others pay up to 15p. The government, therefore, wants all suppliers to have a standard fixed rate that will enable consumers to work out how much they could make. Even with the highest rates, however, it could take nearly 20 years to recoup the cost of installing micro-generation in your home, according to figures from comparison site Confused.com.
Green energy provider Good Energy currently offers the best ‘buyback’ scheme with its Home Gen tariff, which pays 15p for each unit generated. To qualify, you will need a microgeneration tool such as a wind turbine or solar panels and an export generator or total generation meter.
If you invested £12,500 in a wind turbine the height of a telegraph pole and generated the average 3,300 kWh of energy, you would never recoup your investment through selling energy. If, however, you generated the maximum 5,000 kilowatts, you would cover your own energy needs, saving about £410 based on the average annual electricity bill. You would also make enough to sell back to the grid, netting £251 a year — a total of nearly £662. This would mean you would recoup your investment in nearly 19 years. Gareth Kloet of Confused said: “Even 19 years is probably enough to dissuade all but the greenest of homeowners from the microgeneration path unless the government comes up with more incentives.”
Energy efficiency
More straightforward energy efficiency measures can be just as effective. For example, insulating your loft would cost £500 without a grant or £250 with, but you would save £150 a year if you had no insulation already, said the Energy Saving Trust.
Anyone over 60 or in receipt of certain benefits, such as disability living allowance, can already apply to the government for grants of up to £2,700 to help with the cost of green home improvements.
You do not have to be financially vulnerable, though. Gas and electricity suppliers also run grant schemes that can cut the cost of measures such as loft or cavity-wall insulation by hundreds of pounds.
The UK Green Building Council will also propose a “pay as you save” scheme in the coming weeks, in which you borrow money from a local council via your energy company to cover the upfront costs of making your home energy efficient. It would be repaid out of the reduction in your fuel bills. The charge will be linked to the property, not the individual, so if you move house, it will stay with the new owner.
Even with low or even zero-interest rates, it could take some time to make back the upfront costs. The Committee on Climate Change calculates the owner of a three-bedroom Victorian end-of-terrace home, with three exposed walls, could expect to spend £10,280 on a package of energy-saving measures, including a new boiler. Even with 0% interest, this would cost £514 a year in repayments over 20 years. The energy savings would total £802 — making them £288 a year better off.
If, however, they spent £32,180 on a top-of-the-range energy-efficiency package with deluxe double glazing, insulation on all external walls, solar panels and a ground-source heat pump, this would cost £1,609 a year in repayments over 20 years. The savings on their annual bills would be only £1,400, but the alterations could add value to their home.
There are already green loans available for energy-efficient improvements. The Co-operative Bank, for example, charges only 1.54% on additional borrowing of up to £20,000 for green home modifications, while Ecology building society offers discounts on its standard rate of 4.65%.
You must have a standard home loan with each lender to qualify for these deals. The Co-operative Bank is offering a five-year fixed-rate deal at 4.99% with a £995 arrangement fee, while Ecology always lends at its standard rate — 4.65% — with discounts varying according to your plan’s environmental benefits.
Richard Morea of L&C Mortgages, a broker, said: “We would advise environmentally-minded borrowers to find the best possible mortgage deal and put the savings to ecological use instead.”
The green revolution
Ed Miliband’s 1,000-page opus is big on aspiration but short on detail, say industry chiefs, and Labour’s low-carbon dreams will remain just that without investment
Danny Fortson
Last October Ed Miliband, the former Cabinet Office minister and confidant of Gordon Brown, was given one of the hardest jobs in government. Chosen to head the new Department for Energy and Climate Change, he was tasked with charting a path to revolution.
New Labour has long spoken of a future in which Britain would be ringed by thousands of windmills, turning in the breeze to create pure, pollution-free power.
Dirty old coal-fired power stations would bury their harmful exhaust deep underground; underwater turbines would draw energy from the tides. Our homes would be kitted out with smart meters to give us by-the-minute updates on our energy use and carbon footprint.
The vision was there. What was missing was the detail, and it was up to Miliband and his team at the cutting-edge energy department to provide it.
Last week, he revealed the fruits of that labour. The documents comprising the latest iteration of the government’s plan for a green future weighed in at more than 1,000 pages.
They contained a few firsts. The government finally admitted in stark terms that energy bills will have to rise – by 17% for business and 8% for households – to decarbonise the economy.
It broadly laid out how the £150 billion investment required over the next 20 years will be distributed (offshore wind looks like the biggest winner).
Every government department was given a carbon budget. More than 400,000 “green jobs” are expected to be created and no fewer than half a dozen quangos will be set up to oversee the transition to deliver an 18% cut in carbon emissions from present levels by 2020.
Industry, however, was sceptical. It has seen targets come and go before. This is Labour’s fourth energy white paper since Creating a Low Carbon Economy was published in 2003. It is by far the most comprehensive but many of the hardest questions remain unanswered.
How does the government propose to kickstart investment that has plummeted by a third in the past year? Will it step in with a new mechanism if the carbon price remains low? And no new details were given on how the byzantine planning process, the bane of the stuttering revolution, will be reformed.
New Energy Finance, the alternative-energy research firm, described the white paper as “old wine in new bottles” containing “hardly any . . . strikingly new measures to support the industry”.
Instead of a bold, detailed plan, what was produced was a repackaging of previously published programmes. “There isn’t a lot new here,” said Paul Golby, chief executive of Eon UK, the gas and electricity provider. “Policy papers are great but there isn’t a sufficient sense of urgency. Without the details and timetables showing how they are going to reach these targets, policy papers become aspirations,” he said.
Over the next 11 years, the heaviest burden will fall on the power companies. Britain’s power stations, most of which burn coal or gas, produce more pollution than any other source, accounting for about a third of UK carbon emissions.
Today only 6% of our power comes from renewable sources. By 2020, the government envisages a fivefold increase to 30%.
David Porter, head of the Association of Electricity Producers, said: “Both in money terms and in the number of projects, this is the biggest undertaking the electricity industry has ever had to make.”
Wind and nuclear power will be the biggest components of the change. It is estimated that 7,000 wind turbines, both offshore and onshore, will need to be built. Today there are 2,357.
Few think this will happen. Most new wind power sources are envisaged as enormous farms out at sea. This will require even more back-up plants to be built so that power can be provided when the wind isn’t blowing. What is more, laying the hundreds of miles of cables to connect them to the grid will be a hugely complex task. And Britain has virtually no domestic capability to build turbines.
The scale of the challenge facing the wind industry is typical of all “green” sectors. The government has portrayed our scant domestic know-how as a huge opportunity. There is nowhere to go but up, the argument goes, hence the 400,000 promised “green” jobs.
However, Britain simply doesn’t have the cash to emulate America, where the government has earmarked tens of billions of dollars in public funds to kickstart the sector. Instead, it is hoping that it can create a regulatory environment attractive enough to motivate the private sector to put up the billions that are needed.
Golby at Eon, which plans to build up to three nuclear reactors and the largest wind farm in the world, the Thames Array, is not convinced.
He said: “If there is not a clear path to payback on a new plant, we won’t build it.
It’s unclear whether the current market mechanisms will deliver that.”
Tom Murley, head of renewable-energy investment at HG Capital, was more blunt. “The UK is just a hard place to do business,” he said. “America is clearing the decks so people can do this stuff, but Britain doesn’t have that kind of money. They spent it all on bailing out the banks.
“Planning is a big issue and because of the recession the capital isn’t there. This will permeate the market for the next five to ten years.”
Miliband set aside £120m to help establish a wind industry manufacturing base in Britain but it is unclear how that money will be distributed.The government also extended a subsidy called renewable obligation certificates (ROC), meant to make wind power competitive with cheaper, dirtier forms of power by 2027 to 2037. Other low-carbon technologies, like waste-to-energy and biomass (see panel at top right), will also benefit from the extension.
The critical technologies, however, are farther off in the distance. The first of a new generation of nuclear stations is, by most estimates, a decade away. These won’t do much to help cut Britain’s carbon footprint because they will be replacing old nuclear stations going offline.
Clean coal technology, which strips carbon dioxide from the chimney exhaust of coal and gas power stations and stores it underground, could take just as long to be developed.
Recognising the size of the task, the government has relaxed a previously recommended timeline for achieving the transformation. The independent advisory Committee on Climate Change said this year that the power sector should remove virtually all emissions by 2030. This has now been pushed to 2050.
The other two main areas of focus are energy efficiency and transport. The government has extended a £3.2 billion programme, funded by the utilities, to insulate homes. It is also pushing ahead with a £7 billion process to fit the UK’s 26m homes with “smart meters” that provide real-time data on energy usage. The hope is that such measures will cut demand, thereby reducing the need for new power plants.
Transport is the area over which the government has the least control. The development of low-carbon cars will be driven not by Whitehall but carmakers responding to international fuel-efficiency standards.
The government is doing its best to encourage them but the value of a pilot scheme testing 340 electric and low-emission vehicles – “the largest in the world” – is unclear. As is a £5m project to increase bicycle parking at train stations.
What is certain is that it is all going to be very expensive – and we will be footing a big chunk of the bill, either through public subsidies or higher energy bills. The government predicts an 8% rise in household energy bills, and 17% for industry.
“None of this is going to be free,” said Garry Felgate, chief executive of the Energy Retail Association. “It’s good that the government is now being honest about it.”
Yet for all the government’s soaring aspirations, the two biggest obstacles to our green future remain money and planning.
In 2007, the top three banks lending money for renewable projects were Lehman Brothers, Morgan Stanley and Gold-man Sachs. Lehman no longer exists, and the other two are directing their shrunken resources elsewhere.
“None of these guys is doing much any-more and nobody has really stepped into the breach,” said Fraser McLachlan, chief executive of G-Cube, an insurer of green-energy projects. “Despite the push from government, we have seen a real drop in investment.”
According to figures from New Energy Finance, funding for renewables in Britain fell from £6.8 billion in 2007 to £4.5 billion in 2008 – far below the £7.5 billion a year the CBI says is needed, on average, over the next 20 years.
The other big worry is planning reform. It is not unusual for a wind farm, for example, to spend five years in planning – and to then get rejected. The government last year proposed the formation of an Infrastructure Planning Commission, to decide on projects of “national importance” that might otherwise be bogged down for years by local councils.
Steve Holliday, chief executive of National Grid, said: “Getting planning reform through is the next crucial step and we are very concerned that the new planning act is not yet finalised.” He added: “It’s running late and the situation will be critical if it doesn’t happen in the very near future.” The energy white paper is a commendable piece of policy, if for no other reason than the blizzard of acronyms, statistics, targets and quangos it produced. There is a danger, however, that the government is spreading its stretched resources too thinly, funding an array of initiatives so vast that no one sector gets the support that it truly needs.
“This transition is going to be a 20-to 30-year process and what we need to do now is focus on what can get us the biggest gains now,” said Murley.
“This is very scattershot. It’s like Frederick the Great said: ‘If you defend everything, you defend nothing’.”
Turbine tariffs
THE government’s green energy boost could do Proven Energy, a small wind-turbine maker, a power of good,writes Tricia Holly Davis.
Based in East Kilbride, Proven, which employs 70 people, makes turbines for homes and businesses. To date, it has installed 2,500 around the world and will have sales of about £9m this year. Steve Mahon of Low Carbon Accelerator, the renewable-energy fund and main shareholder in Proven, said sales will soar thanks to a new feed-in tariff regime taking effect in April.
Small-scale wind power has remained a niche market because of the questionable economics and planning constraints. Feed-in tariffs guarantee the price at which utilities buy power from generators and allow individuals and businesses that generate all their own power to sell any excess to the grid.
Mahon said: “We will see an explosion in the growth of small-scale turbines.”
Pine beetle’s creative destruction
DEEP in the pine forests of western Canada, an army of mountain pine beetles is doing its part for Britain’s green-energy plans.
Last week, the government gave the green light to a 295MW wood-fired power station on Teesside. The plant, proposed by the MGT power company, will be one of the largest biomass-fuelled stations in the world, incinerating 2.4m tonnes of wood a year to power more than 600,000 homes.
Within the past few months, companies have applied or received planning consent for biomass power stations that would generate 2.5GW of electricity – a tenfold increase over today’s level.
The quantity of wood needed to feed them is simply not available in Britain – nearly all of it will be shipped in from abroad. The MGT plant alone will need one shipload of wood chips or pellets a week to keep the fires burning. Drax, owner of Europe’s biggest coal-fired station, plans to build three MGT-sized biomass plants.
The plants, considered carbon-neutral because the organic materials they burn release carbon, were highlighted as a central component of the government’s energy white paper. And that’s where the mountain pine beetle comes in. Traditionally, the population of the tiny bark-eating pest is culled each year by the brutal winter in the mountains of North America. In the past couple of years, though, the winters have been milder, resulting in an explosion of the beetle population. Their appetite is so voracious that they are rendering useless huge tracts of forest normally logged for the building industry, but it is perfect to be used in biomass plants.
Securing a steady stream of fuel for power stations is the biggest challenge in making them work. Chris Moore, the managing director of MGT, said wood from the beetle-infested area is too far away to be of use to his project, but it is understood that other British developers are looking at importing it.
The irony is impossible to miss: a situation created by rising temperatures could help to get Britain going with its planned biomass plants, whose purpose is to curtail those temperature rises.
The winners of the review...
WIND With £120m in investment, the wind sector, both offshore and onshore, is by far the biggest technology winner, writes Tricia Holly Davis .It is further helped by the extension of the renewables obligation certificate (ROC) scheme, which will force utilities to buy green energy until 2037. The likely increase in payment from 1.5 to 2 ROCs per MWh of offshore electricity produced will provide a further boost.
Analysts said the measures clear the path for the development of the wind sector over the next 20 years. This should stimulate investment across the supply chain, providing opportunities for backers of grid infrastructure, manufacturing capacity and players such as port operators that will service the offshore wind industry. Funding remains a big obstacle, however.
BIOMASS The sector will really take off as a renewable-heat incentive is introduced in April 2011. “With biomass as the primary fuel for renewable heat (followed by heat pumps), those in the agricultural and forestry sectors can expect to see much higher demand for biomass crops,” said Ronan O’Regan of Price Waterhouse Coopers. Biomass projects have suffered significantly in Britain during the past 12 to 18 months because finance has not been available during the credit crunch. The projects being installed from this month will benefit from the introduction of the incentives and this will help with capital investment.
Some say the government could have gone a bit further by introducing a front-loaded tariff for new projects. This would have provided additional support at the beginning of the operation, giving some crumb of comfort on repayment for those whose funds are needed if these projects are to succeed.
WASTE-TO-ENERGY The process by which ordinary household and commercial waste is converted into energy that can be used for heating or to generate electricity features high on the agenda. The main technology winner is anaerobic digestion. “Developers, installers and operators will all be winners, provided they go with commercially proven technologies,” said Mark Wilson of Catalyst Corporate Finance. “It will remain extremely difficult for unproven technologies to get funding unless project sponsors have large balance sheets and will provide all the equity.”
... and the losers
SOLAR At a micro level, payments to homeowners to feed power into the grid could stimulate investment in solar photovoltaic (PV) panels, but Jeremy Leggett of Solar Century said the scheme was not nearly generous enough. “It might stimulate the market but it’s not going to push it toward the explosive growth rates seen in countries like Germany,” said Leggett.
With solar PV, the UK could be generating 5% of its electricity needs by 2020. The EU intends to generate 12% of all its electricity from PV by 2020. The government’s Renewable Energy Strategy, by contrast, assumes that solar PV will contribute only about 2% of the UK’s renewable electricity by that date.
TIDAL Half of Europe’s tidal capacity – and 15% of the entire world’s – is in Britain. Yet the sector secured only £60m for short-term development. The money will be distributed among a number of intermediaries across Britain, not providing any single region with enough capital to significantly increase the sector’s share of renewable power, according to Michelle Thomas, partner at Eversheds, the law firm. As a result, she said that energy from marine sources will meet only a fraction of Britain’s target to receive 15% of its power from renewables over the next 10 years, though its contribution to the government’s 2050 target should be more significant.
CONSUMERS Ultimately, the level of investment in the move to a low-carbon economy comes at a cost that will fall squarely on consumers. The government estimates gas prices will rise by 23% and electricity bills by 15% by 2020, in the absence of offsetting benefits such as energy-efficiency improvements. Price Waterhouse Cooper’s Ronan O’Regan observes: “One of the government’s biggest challenges will be to ensure that the costs and benefits of the proposals will be spread fairly.”
Over the longer term, however, new energy-efficiency products such as smart meters should help consumers to cut their consumption and bills.
Danny Fortson
Last October Ed Miliband, the former Cabinet Office minister and confidant of Gordon Brown, was given one of the hardest jobs in government. Chosen to head the new Department for Energy and Climate Change, he was tasked with charting a path to revolution.
New Labour has long spoken of a future in which Britain would be ringed by thousands of windmills, turning in the breeze to create pure, pollution-free power.
Dirty old coal-fired power stations would bury their harmful exhaust deep underground; underwater turbines would draw energy from the tides. Our homes would be kitted out with smart meters to give us by-the-minute updates on our energy use and carbon footprint.
The vision was there. What was missing was the detail, and it was up to Miliband and his team at the cutting-edge energy department to provide it.
Last week, he revealed the fruits of that labour. The documents comprising the latest iteration of the government’s plan for a green future weighed in at more than 1,000 pages.
They contained a few firsts. The government finally admitted in stark terms that energy bills will have to rise – by 17% for business and 8% for households – to decarbonise the economy.
It broadly laid out how the £150 billion investment required over the next 20 years will be distributed (offshore wind looks like the biggest winner).
Every government department was given a carbon budget. More than 400,000 “green jobs” are expected to be created and no fewer than half a dozen quangos will be set up to oversee the transition to deliver an 18% cut in carbon emissions from present levels by 2020.
Industry, however, was sceptical. It has seen targets come and go before. This is Labour’s fourth energy white paper since Creating a Low Carbon Economy was published in 2003. It is by far the most comprehensive but many of the hardest questions remain unanswered.
How does the government propose to kickstart investment that has plummeted by a third in the past year? Will it step in with a new mechanism if the carbon price remains low? And no new details were given on how the byzantine planning process, the bane of the stuttering revolution, will be reformed.
New Energy Finance, the alternative-energy research firm, described the white paper as “old wine in new bottles” containing “hardly any . . . strikingly new measures to support the industry”.
Instead of a bold, detailed plan, what was produced was a repackaging of previously published programmes. “There isn’t a lot new here,” said Paul Golby, chief executive of Eon UK, the gas and electricity provider. “Policy papers are great but there isn’t a sufficient sense of urgency. Without the details and timetables showing how they are going to reach these targets, policy papers become aspirations,” he said.
Over the next 11 years, the heaviest burden will fall on the power companies. Britain’s power stations, most of which burn coal or gas, produce more pollution than any other source, accounting for about a third of UK carbon emissions.
Today only 6% of our power comes from renewable sources. By 2020, the government envisages a fivefold increase to 30%.
David Porter, head of the Association of Electricity Producers, said: “Both in money terms and in the number of projects, this is the biggest undertaking the electricity industry has ever had to make.”
Wind and nuclear power will be the biggest components of the change. It is estimated that 7,000 wind turbines, both offshore and onshore, will need to be built. Today there are 2,357.
Few think this will happen. Most new wind power sources are envisaged as enormous farms out at sea. This will require even more back-up plants to be built so that power can be provided when the wind isn’t blowing. What is more, laying the hundreds of miles of cables to connect them to the grid will be a hugely complex task. And Britain has virtually no domestic capability to build turbines.
The scale of the challenge facing the wind industry is typical of all “green” sectors. The government has portrayed our scant domestic know-how as a huge opportunity. There is nowhere to go but up, the argument goes, hence the 400,000 promised “green” jobs.
However, Britain simply doesn’t have the cash to emulate America, where the government has earmarked tens of billions of dollars in public funds to kickstart the sector. Instead, it is hoping that it can create a regulatory environment attractive enough to motivate the private sector to put up the billions that are needed.
Golby at Eon, which plans to build up to three nuclear reactors and the largest wind farm in the world, the Thames Array, is not convinced.
He said: “If there is not a clear path to payback on a new plant, we won’t build it.
It’s unclear whether the current market mechanisms will deliver that.”
Tom Murley, head of renewable-energy investment at HG Capital, was more blunt. “The UK is just a hard place to do business,” he said. “America is clearing the decks so people can do this stuff, but Britain doesn’t have that kind of money. They spent it all on bailing out the banks.
“Planning is a big issue and because of the recession the capital isn’t there. This will permeate the market for the next five to ten years.”
Miliband set aside £120m to help establish a wind industry manufacturing base in Britain but it is unclear how that money will be distributed.The government also extended a subsidy called renewable obligation certificates (ROC), meant to make wind power competitive with cheaper, dirtier forms of power by 2027 to 2037. Other low-carbon technologies, like waste-to-energy and biomass (see panel at top right), will also benefit from the extension.
The critical technologies, however, are farther off in the distance. The first of a new generation of nuclear stations is, by most estimates, a decade away. These won’t do much to help cut Britain’s carbon footprint because they will be replacing old nuclear stations going offline.
Clean coal technology, which strips carbon dioxide from the chimney exhaust of coal and gas power stations and stores it underground, could take just as long to be developed.
Recognising the size of the task, the government has relaxed a previously recommended timeline for achieving the transformation. The independent advisory Committee on Climate Change said this year that the power sector should remove virtually all emissions by 2030. This has now been pushed to 2050.
The other two main areas of focus are energy efficiency and transport. The government has extended a £3.2 billion programme, funded by the utilities, to insulate homes. It is also pushing ahead with a £7 billion process to fit the UK’s 26m homes with “smart meters” that provide real-time data on energy usage. The hope is that such measures will cut demand, thereby reducing the need for new power plants.
Transport is the area over which the government has the least control. The development of low-carbon cars will be driven not by Whitehall but carmakers responding to international fuel-efficiency standards.
The government is doing its best to encourage them but the value of a pilot scheme testing 340 electric and low-emission vehicles – “the largest in the world” – is unclear. As is a £5m project to increase bicycle parking at train stations.
What is certain is that it is all going to be very expensive – and we will be footing a big chunk of the bill, either through public subsidies or higher energy bills. The government predicts an 8% rise in household energy bills, and 17% for industry.
“None of this is going to be free,” said Garry Felgate, chief executive of the Energy Retail Association. “It’s good that the government is now being honest about it.”
Yet for all the government’s soaring aspirations, the two biggest obstacles to our green future remain money and planning.
In 2007, the top three banks lending money for renewable projects were Lehman Brothers, Morgan Stanley and Gold-man Sachs. Lehman no longer exists, and the other two are directing their shrunken resources elsewhere.
“None of these guys is doing much any-more and nobody has really stepped into the breach,” said Fraser McLachlan, chief executive of G-Cube, an insurer of green-energy projects. “Despite the push from government, we have seen a real drop in investment.”
According to figures from New Energy Finance, funding for renewables in Britain fell from £6.8 billion in 2007 to £4.5 billion in 2008 – far below the £7.5 billion a year the CBI says is needed, on average, over the next 20 years.
The other big worry is planning reform. It is not unusual for a wind farm, for example, to spend five years in planning – and to then get rejected. The government last year proposed the formation of an Infrastructure Planning Commission, to decide on projects of “national importance” that might otherwise be bogged down for years by local councils.
Steve Holliday, chief executive of National Grid, said: “Getting planning reform through is the next crucial step and we are very concerned that the new planning act is not yet finalised.” He added: “It’s running late and the situation will be critical if it doesn’t happen in the very near future.” The energy white paper is a commendable piece of policy, if for no other reason than the blizzard of acronyms, statistics, targets and quangos it produced. There is a danger, however, that the government is spreading its stretched resources too thinly, funding an array of initiatives so vast that no one sector gets the support that it truly needs.
“This transition is going to be a 20-to 30-year process and what we need to do now is focus on what can get us the biggest gains now,” said Murley.
“This is very scattershot. It’s like Frederick the Great said: ‘If you defend everything, you defend nothing’.”
Turbine tariffs
THE government’s green energy boost could do Proven Energy, a small wind-turbine maker, a power of good,writes Tricia Holly Davis.
Based in East Kilbride, Proven, which employs 70 people, makes turbines for homes and businesses. To date, it has installed 2,500 around the world and will have sales of about £9m this year. Steve Mahon of Low Carbon Accelerator, the renewable-energy fund and main shareholder in Proven, said sales will soar thanks to a new feed-in tariff regime taking effect in April.
Small-scale wind power has remained a niche market because of the questionable economics and planning constraints. Feed-in tariffs guarantee the price at which utilities buy power from generators and allow individuals and businesses that generate all their own power to sell any excess to the grid.
Mahon said: “We will see an explosion in the growth of small-scale turbines.”
Pine beetle’s creative destruction
DEEP in the pine forests of western Canada, an army of mountain pine beetles is doing its part for Britain’s green-energy plans.
Last week, the government gave the green light to a 295MW wood-fired power station on Teesside. The plant, proposed by the MGT power company, will be one of the largest biomass-fuelled stations in the world, incinerating 2.4m tonnes of wood a year to power more than 600,000 homes.
Within the past few months, companies have applied or received planning consent for biomass power stations that would generate 2.5GW of electricity – a tenfold increase over today’s level.
The quantity of wood needed to feed them is simply not available in Britain – nearly all of it will be shipped in from abroad. The MGT plant alone will need one shipload of wood chips or pellets a week to keep the fires burning. Drax, owner of Europe’s biggest coal-fired station, plans to build three MGT-sized biomass plants.
The plants, considered carbon-neutral because the organic materials they burn release carbon, were highlighted as a central component of the government’s energy white paper. And that’s where the mountain pine beetle comes in. Traditionally, the population of the tiny bark-eating pest is culled each year by the brutal winter in the mountains of North America. In the past couple of years, though, the winters have been milder, resulting in an explosion of the beetle population. Their appetite is so voracious that they are rendering useless huge tracts of forest normally logged for the building industry, but it is perfect to be used in biomass plants.
Securing a steady stream of fuel for power stations is the biggest challenge in making them work. Chris Moore, the managing director of MGT, said wood from the beetle-infested area is too far away to be of use to his project, but it is understood that other British developers are looking at importing it.
The irony is impossible to miss: a situation created by rising temperatures could help to get Britain going with its planned biomass plants, whose purpose is to curtail those temperature rises.
The winners of the review...
WIND With £120m in investment, the wind sector, both offshore and onshore, is by far the biggest technology winner, writes Tricia Holly Davis .It is further helped by the extension of the renewables obligation certificate (ROC) scheme, which will force utilities to buy green energy until 2037. The likely increase in payment from 1.5 to 2 ROCs per MWh of offshore electricity produced will provide a further boost.
Analysts said the measures clear the path for the development of the wind sector over the next 20 years. This should stimulate investment across the supply chain, providing opportunities for backers of grid infrastructure, manufacturing capacity and players such as port operators that will service the offshore wind industry. Funding remains a big obstacle, however.
BIOMASS The sector will really take off as a renewable-heat incentive is introduced in April 2011. “With biomass as the primary fuel for renewable heat (followed by heat pumps), those in the agricultural and forestry sectors can expect to see much higher demand for biomass crops,” said Ronan O’Regan of Price Waterhouse Coopers. Biomass projects have suffered significantly in Britain during the past 12 to 18 months because finance has not been available during the credit crunch. The projects being installed from this month will benefit from the introduction of the incentives and this will help with capital investment.
Some say the government could have gone a bit further by introducing a front-loaded tariff for new projects. This would have provided additional support at the beginning of the operation, giving some crumb of comfort on repayment for those whose funds are needed if these projects are to succeed.
WASTE-TO-ENERGY The process by which ordinary household and commercial waste is converted into energy that can be used for heating or to generate electricity features high on the agenda. The main technology winner is anaerobic digestion. “Developers, installers and operators will all be winners, provided they go with commercially proven technologies,” said Mark Wilson of Catalyst Corporate Finance. “It will remain extremely difficult for unproven technologies to get funding unless project sponsors have large balance sheets and will provide all the equity.”
... and the losers
SOLAR At a micro level, payments to homeowners to feed power into the grid could stimulate investment in solar photovoltaic (PV) panels, but Jeremy Leggett of Solar Century said the scheme was not nearly generous enough. “It might stimulate the market but it’s not going to push it toward the explosive growth rates seen in countries like Germany,” said Leggett.
With solar PV, the UK could be generating 5% of its electricity needs by 2020. The EU intends to generate 12% of all its electricity from PV by 2020. The government’s Renewable Energy Strategy, by contrast, assumes that solar PV will contribute only about 2% of the UK’s renewable electricity by that date.
TIDAL Half of Europe’s tidal capacity – and 15% of the entire world’s – is in Britain. Yet the sector secured only £60m for short-term development. The money will be distributed among a number of intermediaries across Britain, not providing any single region with enough capital to significantly increase the sector’s share of renewable power, according to Michelle Thomas, partner at Eversheds, the law firm. As a result, she said that energy from marine sources will meet only a fraction of Britain’s target to receive 15% of its power from renewables over the next 10 years, though its contribution to the government’s 2050 target should be more significant.
CONSUMERS Ultimately, the level of investment in the move to a low-carbon economy comes at a cost that will fall squarely on consumers. The government estimates gas prices will rise by 23% and electricity bills by 15% by 2020, in the absence of offsetting benefits such as energy-efficiency improvements. Price Waterhouse Cooper’s Ronan O’Regan observes: “One of the government’s biggest challenges will be to ensure that the costs and benefits of the proposals will be spread fairly.”
Over the longer term, however, new energy-efficiency products such as smart meters should help consumers to cut their consumption and bills.
Clean coal powers on
THE government last week invited power companies to bid for hundreds of millions of pounds in public aid to build the country’s first clean coal power station.
Eon, RWE, Npower and Scottish Power are all expected to put forward proposals.
The technology is critical to cutting carbon emissions but companies will not start without heavy public support.
The competition has been delayed for more than a year.
Eon, RWE, Npower and Scottish Power are all expected to put forward proposals.
The technology is critical to cutting carbon emissions but companies will not start without heavy public support.
The competition has been delayed for more than a year.
GCL Solar Energy Withdraws IPO
By JAY MILLER
GCL Solar Energy Technology Holdings Inc. withdrew its filing for an initial public offering as a result of unfavorable market conditions.
The company, founded in 2006 as GCL Silicon Technology Holdings Inc., filed for the IPO nearly a year ago when soaring oil prices had investors throwing money at alternative-energy companies. The withdrawal highlights the difficulties the solar sector now faces since conventional fuels have fallen from their historic peaks.
GCL had already cut the size of the IPO in October to $600 million from $862.5 million American depositary shares.
The company had planned to use proceeds from the offering to make a $150 million contribution to its Jiangsu Zhongneng Polysilicon Technology Development Co. unit as well as to redeem $20 million in bonds and fund acquisitions.
Morgan Stanley, Credit Suisse, HSBC, Cowen & Co. and Piper Jaffray had been slated to underwrite the offering.
Write to Jay Miller at Jay.Miller@dowjones.com
GCL Solar Energy Technology Holdings Inc. withdrew its filing for an initial public offering as a result of unfavorable market conditions.
The company, founded in 2006 as GCL Silicon Technology Holdings Inc., filed for the IPO nearly a year ago when soaring oil prices had investors throwing money at alternative-energy companies. The withdrawal highlights the difficulties the solar sector now faces since conventional fuels have fallen from their historic peaks.
GCL had already cut the size of the IPO in October to $600 million from $862.5 million American depositary shares.
The company had planned to use proceeds from the offering to make a $150 million contribution to its Jiangsu Zhongneng Polysilicon Technology Development Co. unit as well as to redeem $20 million in bonds and fund acquisitions.
Morgan Stanley, Credit Suisse, HSBC, Cowen & Co. and Piper Jaffray had been slated to underwrite the offering.
Write to Jay Miller at Jay.Miller@dowjones.com
Severn tidal power scheme should not go ahead, warns Environment Agency
The contentious Weston barrage would be the largest renewable energy project in Europe but comes with a huge ecological cost
John Vidal, environment editor
guardian.co.uk, Friday 17 July 2009 15.01 BST
A giant tidal energy scheme which the government is counting on to meet ambitious new green energy targets set this week should not be built because it would be so ecologically destructive, the chair of the Environment Agency has warned ministers.
The government's roadmap to a low-carbon UK called for a 34% cut in emissions by 2020, with the power sector contributing the bulk of that saving. The Weston barrage, running 10 miles across the Severn estuary between Weston-super-Mare and Cardiff, is by far the largest of four tidal power schemes being considered by government and would be the centrepiece of the nation's renewable energy plan.
It could generate 8.6 gigawatts of zero-carbon electricity from the Severn – the equivalent of eight large coal-fired power stations – and would be the single largest renewable energy project in Europe.
But the £5bn flagship scheme would permanently flood nearly 35,000 hectares (86,000 acres) of internationally protected wetlands. It would also destroy some of Britain's most important fisheries in the Severn, Wye and Usk catchment areas, said Lord Smith in an interview with the Guardian.
"The great wall across the Severn channel poses the classic environmental dilemma. It would generate 5% of all the UK's electricity needs but at a huge cost in terms of fishing and habitats. These immense environmental impacts outweigh the carbon reduction benefits which you would get. We are advising the government on this pretty strongly," said the government's chief environmental adviser.
"There must be ways of harnessing tidal power from the estuary without the gross impacts that the Weston scheme would have. I regret that we are not putting as much effort as we could into tidal reefs and defences. We should be addressing the possibility of tidal power around the country. Tidal energy should be one of the key ways of generating electricity", he said.
Smith's comments will not be welcomed by the government which this week committed itself to generating 20% of the UK's energy from renewable sources within only 11 years, but it is meeting technical and planning delays with wind power.
A decision on the barrage will be given next year but ministers are keen to see it started because it would contribute more to emission cuts than any other scheme. The energy minister, Lord Hunt, said this week: "The Cardiff-Weston barrage has the potential to save the equivalent of the yearly CO2 emissions from all homes in Wales."
The barrage, which would be a huge engineering feat on the scale of some of the world's biggest construction projects, is shaping up to be one the most contentious environmental issues of the decade. The National Trust, the RSPB and WWF, together representing more than 5 million people, have said that a barrage would be "economically dubious" and "ecologically disastrous".
They have also argued that 5m tonnes of CO2 would be emitted during construction and another 5m tonnes during transport of the materials, undermining claims that the barrage would help reduce emissions.
Smith also warned the nuclear industry, another part of the energy and climate change secretary, Ed Miliband's "trinity" of low-carbon electricity plans, that climate change could seriously affect their costs. He said the agency would demand that nuclear power companies build major sea defences to protect nuclear power against the sea level rises expected over the next 100 years.
"Virtually all the new [nuclear] stations are by the sea. We will look at them on a case-by-case basis but all sites must be fully defensible. The power companies know that they will have to defend them on a very large scale. Protection against flood risk must be absolute."
Smith also questioned Miliband's intention to preserve low-cost mass air travel, revealed in the Guardian this week. Calling for a debate on the future of aviation, he argued that climate change made it doubtful people could fly so much in 40 years' time. "By 2050 we should have reduced greenhouse gases by 80%, which means we will have 20% left. How much of that 20% should be taken by aviation?
"Aeroplanes will get more efficient but they will not be able to completely remove their carbon emissions. By 2050 we will need to have decided how much flying we can do. "
John Vidal, environment editor
guardian.co.uk, Friday 17 July 2009 15.01 BST
A giant tidal energy scheme which the government is counting on to meet ambitious new green energy targets set this week should not be built because it would be so ecologically destructive, the chair of the Environment Agency has warned ministers.
The government's roadmap to a low-carbon UK called for a 34% cut in emissions by 2020, with the power sector contributing the bulk of that saving. The Weston barrage, running 10 miles across the Severn estuary between Weston-super-Mare and Cardiff, is by far the largest of four tidal power schemes being considered by government and would be the centrepiece of the nation's renewable energy plan.
It could generate 8.6 gigawatts of zero-carbon electricity from the Severn – the equivalent of eight large coal-fired power stations – and would be the single largest renewable energy project in Europe.
But the £5bn flagship scheme would permanently flood nearly 35,000 hectares (86,000 acres) of internationally protected wetlands. It would also destroy some of Britain's most important fisheries in the Severn, Wye and Usk catchment areas, said Lord Smith in an interview with the Guardian.
"The great wall across the Severn channel poses the classic environmental dilemma. It would generate 5% of all the UK's electricity needs but at a huge cost in terms of fishing and habitats. These immense environmental impacts outweigh the carbon reduction benefits which you would get. We are advising the government on this pretty strongly," said the government's chief environmental adviser.
"There must be ways of harnessing tidal power from the estuary without the gross impacts that the Weston scheme would have. I regret that we are not putting as much effort as we could into tidal reefs and defences. We should be addressing the possibility of tidal power around the country. Tidal energy should be one of the key ways of generating electricity", he said.
Smith's comments will not be welcomed by the government which this week committed itself to generating 20% of the UK's energy from renewable sources within only 11 years, but it is meeting technical and planning delays with wind power.
A decision on the barrage will be given next year but ministers are keen to see it started because it would contribute more to emission cuts than any other scheme. The energy minister, Lord Hunt, said this week: "The Cardiff-Weston barrage has the potential to save the equivalent of the yearly CO2 emissions from all homes in Wales."
The barrage, which would be a huge engineering feat on the scale of some of the world's biggest construction projects, is shaping up to be one the most contentious environmental issues of the decade. The National Trust, the RSPB and WWF, together representing more than 5 million people, have said that a barrage would be "economically dubious" and "ecologically disastrous".
They have also argued that 5m tonnes of CO2 would be emitted during construction and another 5m tonnes during transport of the materials, undermining claims that the barrage would help reduce emissions.
Smith also warned the nuclear industry, another part of the energy and climate change secretary, Ed Miliband's "trinity" of low-carbon electricity plans, that climate change could seriously affect their costs. He said the agency would demand that nuclear power companies build major sea defences to protect nuclear power against the sea level rises expected over the next 100 years.
"Virtually all the new [nuclear] stations are by the sea. We will look at them on a case-by-case basis but all sites must be fully defensible. The power companies know that they will have to defend them on a very large scale. Protection against flood risk must be absolute."
Smith also questioned Miliband's intention to preserve low-cost mass air travel, revealed in the Guardian this week. Calling for a debate on the future of aviation, he argued that climate change made it doubtful people could fly so much in 40 years' time. "By 2050 we should have reduced greenhouse gases by 80%, which means we will have 20% left. How much of that 20% should be taken by aviation?
"Aeroplanes will get more efficient but they will not be able to completely remove their carbon emissions. By 2050 we will need to have decided how much flying we can do. "
Toyota Will Make Hybrids in Britain
By YOSHIO TAKAHASHI
TOKYO -- Toyota Motor Corp. said it will produce hybrid vehicles in Europe for the first time next year, as it pushes ahead with its leading gas-sipping hybrid cars across the globe.
Toyota, the world's largest hybrid maker, aims to gather momentum by enticing cost-conscious customers with its hybrids in the region, where it is struggling with a relatively small 5% share of the overall market.
The world's biggest car maker by sales volume said it will manufacture a hybrid version of the Auris subcompact hatchback in the U.K. from the middle of 2010. It will spend three billion yen ($32 million) to prepare for production.
The U.K. will be the fifth country outside Japan where Toyota makes hybrid cars or plans to do so. The company already builds hybrids in China and the U.S. and will begin production in Thailand later this month and in Australia in early 2010.
The latest decision on U.K. production follows a strategy that the company's newly appointed president, Akio Toyoda, outlined late last month. He aims to promote hybrid car sales in Europe where customers looking for more fuel-economic vehicles tend to buy diesel-powered cars.
Toyota is betting on its leading technology combining combustion engines with electric motors to spur demand in Europe for low-emission cars that are cheaper to run.
The auto giant also aims to offer hybrid versions of all of its vehicles by 2020.
Core components of the system such as the batteries and the motors will be shipped from Japan, a Toyota spokesman said.
Nissan Motor Co. said it is considering expanding its limited offerings of hybrid vehicles by installing its own gasoline-electric system technology in more models to catch up with rivals such as Toyota.
The Japanese car maker, in which Renault SA holds a 44% stake, follows Honda Motor Co. and Mazda Motor Corp. in seeking to beef up its hybrid lineup.
Honda said July 13 that it will launch two new gasoline-electric hybrid vehicles next year, while Mazda is in talks with Toyota over using components of Toyota's system for its hybrid vehicles.
Nissan has lagged behind major hybrid makers including Toyota, Honda and Ford Motor Co. as the company has focused more on developing electric cars. It plans to roll out electric vehicles next year in Japan and the U.S.
Write to Yoshio Takahashi at yoshio.takahashi@dowjones.com
TOKYO -- Toyota Motor Corp. said it will produce hybrid vehicles in Europe for the first time next year, as it pushes ahead with its leading gas-sipping hybrid cars across the globe.
Toyota, the world's largest hybrid maker, aims to gather momentum by enticing cost-conscious customers with its hybrids in the region, where it is struggling with a relatively small 5% share of the overall market.
The world's biggest car maker by sales volume said it will manufacture a hybrid version of the Auris subcompact hatchback in the U.K. from the middle of 2010. It will spend three billion yen ($32 million) to prepare for production.
The U.K. will be the fifth country outside Japan where Toyota makes hybrid cars or plans to do so. The company already builds hybrids in China and the U.S. and will begin production in Thailand later this month and in Australia in early 2010.
The latest decision on U.K. production follows a strategy that the company's newly appointed president, Akio Toyoda, outlined late last month. He aims to promote hybrid car sales in Europe where customers looking for more fuel-economic vehicles tend to buy diesel-powered cars.
Toyota is betting on its leading technology combining combustion engines with electric motors to spur demand in Europe for low-emission cars that are cheaper to run.
The auto giant also aims to offer hybrid versions of all of its vehicles by 2020.
Core components of the system such as the batteries and the motors will be shipped from Japan, a Toyota spokesman said.
Nissan Motor Co. said it is considering expanding its limited offerings of hybrid vehicles by installing its own gasoline-electric system technology in more models to catch up with rivals such as Toyota.
The Japanese car maker, in which Renault SA holds a 44% stake, follows Honda Motor Co. and Mazda Motor Corp. in seeking to beef up its hybrid lineup.
Honda said July 13 that it will launch two new gasoline-electric hybrid vehicles next year, while Mazda is in talks with Toyota over using components of Toyota's system for its hybrid vehicles.
Nissan has lagged behind major hybrid makers including Toyota, Honda and Ford Motor Co. as the company has focused more on developing electric cars. It plans to roll out electric vehicles next year in Japan and the U.S.
Write to Yoshio Takahashi at yoshio.takahashi@dowjones.com
Britain’s dirty little secret as a dumper of toxic waste
Ben Webster, Environment Editor, and Dom Phillips in São Paulo
Britain was accused yesterday of dumping toxic household and industrial waste in developing countries on two continents in breach of an international convention.
The Government last night was considering tightening the enforcement of rules after the discovery of hazardous medical and electrical waste in Brazil and Ghana.
Hilary Benn, the Environment Secretary, ordered an investigation into two British companies linked to 90 shipping containers containing 1,400 tonnes of waste. They included syringes, condoms and nappies. The companies that received the waste — sent from Felixstowe to three Brazilian ports — said that they had been expecting recyclable plastic.
In a separate case, the Ministry of Defence was unable to explain how one of its computers was found by The Times on a notorious dump on the outskirts of Accra, Ghana. Children as young as 5 extract scrap metal from electrical items there and are exposed to potentially lethal chemicals.
Inspectors from Brazil’s environment agency, Ibama, found hospital waste in several containers, reportedly including bags of blood. Another container was full of dirty toys with a note in Portuguese saying they should be washed before being given to “poor Brazilian children”.
Ingrid Oberg, an Ibama official, who opened containers found in the port of Santos on national television news, said: “Whoever put this rubbish into the containers in the UK knew what they were doing and knew where they were going, so it is a criminal act. England needs to assume responsibility.”
Roberto Messias, Ibama’s president, said: “We will ask for the repatriation of this garbage. Clearly, Brazil is not a big rubbish dump of the world.” The agency said that it was considering taking action against two British companies it believed were connected to yesterday’s find — Worldwide Biorecyclables Ltd and UK Multiplas Recycling Ltd.
Mr Benn admitted that there could be weaknesses in the enforcement of rules on sending waste overseas, including a European directive banning the export of any electrical waste. Speaking to The Times about the discoveries in Brazil, he said: “If, having looked into this particular case, there are lessons that need to be learnt about enforcement, then we will do that.”
Britain was accused yesterday of dumping toxic household and industrial waste in developing countries on two continents in breach of an international convention.
The Government last night was considering tightening the enforcement of rules after the discovery of hazardous medical and electrical waste in Brazil and Ghana.
Hilary Benn, the Environment Secretary, ordered an investigation into two British companies linked to 90 shipping containers containing 1,400 tonnes of waste. They included syringes, condoms and nappies. The companies that received the waste — sent from Felixstowe to three Brazilian ports — said that they had been expecting recyclable plastic.
In a separate case, the Ministry of Defence was unable to explain how one of its computers was found by The Times on a notorious dump on the outskirts of Accra, Ghana. Children as young as 5 extract scrap metal from electrical items there and are exposed to potentially lethal chemicals.
Inspectors from Brazil’s environment agency, Ibama, found hospital waste in several containers, reportedly including bags of blood. Another container was full of dirty toys with a note in Portuguese saying they should be washed before being given to “poor Brazilian children”.
Ingrid Oberg, an Ibama official, who opened containers found in the port of Santos on national television news, said: “Whoever put this rubbish into the containers in the UK knew what they were doing and knew where they were going, so it is a criminal act. England needs to assume responsibility.”
Roberto Messias, Ibama’s president, said: “We will ask for the repatriation of this garbage. Clearly, Brazil is not a big rubbish dump of the world.” The agency said that it was considering taking action against two British companies it believed were connected to yesterday’s find — Worldwide Biorecyclables Ltd and UK Multiplas Recycling Ltd.
Mr Benn admitted that there could be weaknesses in the enforcement of rules on sending waste overseas, including a European directive banning the export of any electrical waste. Speaking to The Times about the discoveries in Brazil, he said: “If, having looked into this particular case, there are lessons that need to be learnt about enforcement, then we will do that.”
Should the plans for eco-towns be scrapped?
A shortlist published this week names the first four 'green' communities approved for construction. Is it just tokenism?
Yes: Adrian Ramsay, Deputy leader of the Green Party
There’s an argument that the Government started using the label “eco-towns” to rush through developments it wouldn’t otherwise get away with under its own planning system. In any case, eco-towns are a tokenistic attempt to appear green and do not take into account broader social and environmental concerns.
Genuine eco-towns would be about sustainable communities in the widest possible sense. The Green Party is not convinced that eco-towns live up to this standard. The current proposals are not fully thought through. While the standards for buildings are set high, the proposals fall down in other areas such as transport and jobs.
We want every town to be an eco-town, not simply a label that’s applied to certain developments to make them sound more acceptable. To do this, we need all new developments to be of the highest environmental standard, not only eco-towns.
In general, rather than building new towns, there needs to be more concentration on improving energy efficiency, housing stock and public transport in existing communities. Not enough attention is being given to improving energy efficiency within existing houses to help people to reduce their fuel bills and save carbon.
While we understand the need for new affordable housing, we have concerns about that level of housing growth in the countryside. At present, eco-towns are primarily intended for greenfield sites and will take up large swaths of the countryside. But there are ample brownfield sites around the country that could be used instead — derelict industrial sites or areas with a number of empty homes that could be developed into eco-towns.
Eco-town developments are going ahead without the transport links having been properly considered, without local services and jobs being available to try to minimise the need to travel. Even if the towns are built to a high environmental standard, this will be undermined if the prime mode of transport is car based.
This is the case in the proposals for the Rackheath eco-town near Norwich, which are closely linked to a major new ring road around the city. It suggests the Government is not taking the eco-town seriously. The road would result in a massive increase in carbon emissions and mean the development was entirely car based.
The eco-towns will not create the local jobs and services needed to be self-sufficient. In the case of Rackheath, it is seen as part of Norwich getting bigger — people won’t necessarily be working near home and many will need to travel every day. Rather than the road relieving the city’s congestion problems, it will exacerbate them.
We want strong local communities where there are work opportunities and a full range of services locally to reduce the need to travel. We are not convinced that eco-towns will offer that. There is too much concentration on housing targets and roadbuilding and not on sustainable communities.
No: Gideon Amos, chief executive of the Town and Country Planning Association
The concept of eco-towns is absolutely right in environmental and demographic terms. We have to develop them in an entirely different way to cope with our changing climate and understand better how we can reduce carbon emissions.
It is vital these places work socially as well as environmentally. They have to be places where people want to live, homes where people want to bring up children and invest in their future. They have to be attractive places that work as successful neighbourhoods, not just low-carbon communities.
We believe the successful eco-town sites proposed can achieve this. ln already built-up areas it is much more difficult to put in new infrastructure and provide open space. Building major new settlements means that in most cases a much higher standard of sustainability can be provided through putting in different transport systems and different energy systems, community heat and power, heat exchanges and the kind of infrastructure that you can’t as easily put into neighbourhoods such as Hackney, [East London] where I live.
As new sites, eco-towns also offer opportunities for really high-quality green space — parks, gardens and open spaces that are extremely difficult to provide in existing cities.
There are huge challenges, too. Some of the biggest challenges are getting the public transport right. We want to see eco-town sites with excellent public transport links. We hope priority will be given to those with rail stations. We need tough measures to ensure that car use is kept to a minimum. In our guidance, which is supported by Government, we set tough standards for the maximum number of journeys by cars.
A lot of environmentalists support eco-towns but there were concerns about some of the locations. Some were never likely to be sustainable. Now those have been weeded out, the remaining locations stand up to much better scrutiny. We will be pushing to make sure that’s the case.
It would be foolish to pretend that all the opposition was well founded. Some is based on a simple case of “not in my back yard”.
We need to move away from the old dichotomy of “greenfield bad, brownfield good” and come up with a new form of development, which doesn’t impinge on the environment in the way we have in the past. If we are going to tackle the huge environmental challenges we face, we have to find ways of using land, including greenfield. Some use of greenfield is necessary, although we would like to see most development on brownfield sites.
Every eco-town must be linked to an adjoining and existing town through top-quality public transport. As exemplar new developments, they have the opportunity to boost their neighbouring communities through their investment in new infrastructure and transport services and provide a stimulus to make existing towns more sustainable.
Yes: Adrian Ramsay, Deputy leader of the Green Party
There’s an argument that the Government started using the label “eco-towns” to rush through developments it wouldn’t otherwise get away with under its own planning system. In any case, eco-towns are a tokenistic attempt to appear green and do not take into account broader social and environmental concerns.
Genuine eco-towns would be about sustainable communities in the widest possible sense. The Green Party is not convinced that eco-towns live up to this standard. The current proposals are not fully thought through. While the standards for buildings are set high, the proposals fall down in other areas such as transport and jobs.
We want every town to be an eco-town, not simply a label that’s applied to certain developments to make them sound more acceptable. To do this, we need all new developments to be of the highest environmental standard, not only eco-towns.
In general, rather than building new towns, there needs to be more concentration on improving energy efficiency, housing stock and public transport in existing communities. Not enough attention is being given to improving energy efficiency within existing houses to help people to reduce their fuel bills and save carbon.
While we understand the need for new affordable housing, we have concerns about that level of housing growth in the countryside. At present, eco-towns are primarily intended for greenfield sites and will take up large swaths of the countryside. But there are ample brownfield sites around the country that could be used instead — derelict industrial sites or areas with a number of empty homes that could be developed into eco-towns.
Eco-town developments are going ahead without the transport links having been properly considered, without local services and jobs being available to try to minimise the need to travel. Even if the towns are built to a high environmental standard, this will be undermined if the prime mode of transport is car based.
This is the case in the proposals for the Rackheath eco-town near Norwich, which are closely linked to a major new ring road around the city. It suggests the Government is not taking the eco-town seriously. The road would result in a massive increase in carbon emissions and mean the development was entirely car based.
The eco-towns will not create the local jobs and services needed to be self-sufficient. In the case of Rackheath, it is seen as part of Norwich getting bigger — people won’t necessarily be working near home and many will need to travel every day. Rather than the road relieving the city’s congestion problems, it will exacerbate them.
We want strong local communities where there are work opportunities and a full range of services locally to reduce the need to travel. We are not convinced that eco-towns will offer that. There is too much concentration on housing targets and roadbuilding and not on sustainable communities.
No: Gideon Amos, chief executive of the Town and Country Planning Association
The concept of eco-towns is absolutely right in environmental and demographic terms. We have to develop them in an entirely different way to cope with our changing climate and understand better how we can reduce carbon emissions.
It is vital these places work socially as well as environmentally. They have to be places where people want to live, homes where people want to bring up children and invest in their future. They have to be attractive places that work as successful neighbourhoods, not just low-carbon communities.
We believe the successful eco-town sites proposed can achieve this. ln already built-up areas it is much more difficult to put in new infrastructure and provide open space. Building major new settlements means that in most cases a much higher standard of sustainability can be provided through putting in different transport systems and different energy systems, community heat and power, heat exchanges and the kind of infrastructure that you can’t as easily put into neighbourhoods such as Hackney, [East London] where I live.
As new sites, eco-towns also offer opportunities for really high-quality green space — parks, gardens and open spaces that are extremely difficult to provide in existing cities.
There are huge challenges, too. Some of the biggest challenges are getting the public transport right. We want to see eco-town sites with excellent public transport links. We hope priority will be given to those with rail stations. We need tough measures to ensure that car use is kept to a minimum. In our guidance, which is supported by Government, we set tough standards for the maximum number of journeys by cars.
A lot of environmentalists support eco-towns but there were concerns about some of the locations. Some were never likely to be sustainable. Now those have been weeded out, the remaining locations stand up to much better scrutiny. We will be pushing to make sure that’s the case.
It would be foolish to pretend that all the opposition was well founded. Some is based on a simple case of “not in my back yard”.
We need to move away from the old dichotomy of “greenfield bad, brownfield good” and come up with a new form of development, which doesn’t impinge on the environment in the way we have in the past. If we are going to tackle the huge environmental challenges we face, we have to find ways of using land, including greenfield. Some use of greenfield is necessary, although we would like to see most development on brownfield sites.
Every eco-town must be linked to an adjoining and existing town through top-quality public transport. As exemplar new developments, they have the opportunity to boost their neighbouring communities through their investment in new infrastructure and transport services and provide a stimulus to make existing towns more sustainable.
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