Saturday, 29 August 2009

Water firms oppose pipe network plan

Utilities oppose moves by regulator to give rival companies access to their regional supplies
The Observer, Sunday 30 August 2009
Water companies are blocking plans to allow water to be moved from the north to the south east of England, where climate change and a growing population is making it more scarce, as part of a shake-up of the industry.
The Environment Agency, a government body, has formed a working group with regulator Ofwat to look at forcing companies to give competitors access to their regional monopolies on water supplies.
Introducing competition in this way would cut consumers' bills, according to some executives and regulators. They accuse water companies of choosing instead to build unnecessary reservoirs and desalination plants to supply customers because spending more helps them to boost profits.
The regulator fixes how much water companies can spend on infrastructure, but allows them to keep any savings they might make. This means that companies like Thames Water can make bigger profits by spending billions of pounds building new infrastructure such as new reservoirs and desalination plants to increase supplies, than by the potentially cheaper way of importing the water from different regions.
Next month, the government will also formally respond to a review of the water markets by Professor Martin Cave, which has raised the prospect of the biggest changes to the industry since privatisation, and which will then go out to consultation.
But Severn Trent Water, one of the few industry advocates of competition, and the Environment Agency say that water companies are resisting the plans, which would see supplies transferred around the country to where they were needed most.
Customer bills have to rise to pay for companies' increased spending. Companies want to raise bills by 1.7% before inflation each year on average over the next five years, with Thames Water asking for a 3% above inflation annual rise. The regulator will fix prices in November and talks with water companies will intensify over the next few weeks.
Trevor Bishop, head of water resource policy at the Environment Agency, said it was talking to the regulator and the environment department about how to remove the disincentives for water companies to transfer water to other companies. "Companies may say they are in favour of competition, but in reality, they may also benefit from a regional monopolies structure and it could be in their interests to build desalination plants and reservoirs to supply customers," he added. "We estimate some significant future investments in reservoirs and desalination plants could be cancelled if more water is shared, which could result in lower bills or at least a lower increase in bills."
Unlike the electricity industry, only limited competition exists in the water sector. Water is much more expensive to transport over long distances than electricity or gas, which means that most water used by households and businesses comes from their area via their local company. But worsening climate change and shifting demographics are forcing the government and regulators to rethink this approach. Rainfall levels are dropping in the south-east with the resulting water shortage exacerbated by a rising population. The population of London alone is expected to rise from 7.56m to 9.11m by 2031. Most companies are predicting a supply shortage over the next 25 years with the Environment Agency forecasting that only Northumbrian Water, which owns Kielder Water reservoir, will not suffer a deficit by 2035 if no new reservoirs or pipelines are built.
The idea of a "national grid for water" to move it around the country has long been mooted but dismissed as too expensive. Severn Trent argues that building "inter-connects", or small pipelines linking different regional networks, would do the same job and cost far less. The company wants the Environment Agency to make it easier for different suppliers to obtain licences to abstract water from reservoirs. The regulator would also have to force companies to give fair access to their networks of pipelines to allow these suppliers to transfer water to their customers. Rival water companies claimed Severn Trent, which stretches from the river Severn near Bristol to the Humber in the north-east, was only advocating competition because it would benefit from charging for the use of its vast network.
Jeanne Golay, economic regulation adviser at trade body Water UK, said that competition should not be introduced for the sake of it and that companies were best placed to judge how to secure supplies for customers.
If competition of this kind was introduced, it is not known how much it would cost to build the pipelines to link all the regional networks. The Environment Agency thinks that this system would be the cheapest way to ensure that water-scarce regions, particularly the south-east, are kept supplied. It estimates that a third of the new reservoirs and desalination plants planned would not be needed as a result.
But Johan van den Arend Schmidt, partner at PricewaterhouseCoopers, said it was impossible to say which option would be the cheapest, and argued that moving water around the country would be very expensive. "It's not impossible to put in some water pipes from one area to another," he said. "But building that infrastructure and pumping the water is not cheap and the main focus at the moment is on keeping bills low. Whether customers or regulator would accept an increase of up to 10% in bills to save on one or two hosepipe bans is not clear. Another way to ensure supplies of water is to cut waste and usage."

Supercomputer in the firing line over carbon footprint

It's impossible to ignore the irony that the Met Office supercomputer dedicated to modelling climate change has an enormous carbon footprint. But critics just miss the point
In the past I've written about the internet's energy footprint, and raised the question of whether we should consider ways to drastically reduce the power consumed by data centres as our lives go increasingly online.
So it was with more than a little interest that I read this story about the Met Office's weather-predicting supercomputer - and how, ironically, it has a pretty big carbon footprint.
According to a study by the Department of Communities looking into the footprints of public buildings around the UK, the £33m IBM cluster produces up to 75% of the carbon emissions from the Met Office's HQ in Exeter. That means it's responsible for a good deal of their annual output of 12,000 tonnes of carbon dioxide - one of the highest totals in the country.
It's an easy headline, of course - and probably feels particularly sweet for those who revel in poking at climate change scientists (and they are certainly a vocal group). But the delight in this irony is also driven, in part, by the misplaced assumption that a climate scientist would think that all carbon emissions are bad.
Are all CO2 emissions equal? Well I'm certainly happier to see carbon being spent solving the world's biggest problems than ferrying people around the globe for business meetings they could do through teleconferencing.
And, of course, it's all relative in any case. Supercomputers in the past used vast amounts of energy to run, and were extremely primitive by comparison to today's beasts - on a visit to the Museum of Computer History earlier this year, I saw an old IBM machine that used the same amount of power as a small town but had just a few KB of memory. The Met Office machine hopes to be able to run at a Petaflop soon - that's 1 thousand trillion (1,000,000,000,000,000) calculations every second.
The truth is that while the public rarely thinks about supercomputers - except, perhaps, when there's a chess game at stake - these machines do amazing work that is impossible to replicate elsewhere. These are the machines that fold proteins, that crunch data from particle accelerators; they are the sort of machines that could help cure cancer - or, in the case of the Met's cluster, save thousands of lives by accurately modelling a climate-related disaster. It's worth thinking about.

Leave population out of climate talks, Indian minister says

Jairam Ramesh claims there is a move among western countries to bring India's rapidly growing population into climate change negotiations
Randeep Ramesh in Delhi, Friday 28 August 2009 17.10 BST
Western nations are trying to use India's "profligate reproductive behaviour" to force Delhi to accept legally binding emission reduction targets, India's environment minister said today.
Speaking at a conference in the Indian capital, organised by Delhi's Centre for Science and Environment, Jairam Ramesh said there was a "move in western countries to bring population into climate change [negotiations]. Influential American thinktanks are asking why should we reward profligate reproductive behaviour? Why should we reward India which is adding 14 million people every year?"
Ramesh's speech comes as the 100 day countdown begins to the UN climate change summit in Copenhagen, which will agree on a successor to the Kyoto agreement, due to expire in 2012. Developing nations such as India and China were not constrained by the Kyoto agreement, and western nations now argue that these rapidly growing economies should sign up to legally binding emission targets.
India's population of over 1 billion means that while it is the world's fifth biggest emitter of greenhouse gases, its per capita emissions are just one-twentieth of the United States. However, its population is rising quickly and the United Nations predicts India will have 1.7 billion people by 2050 – while China will by then have a population of 1.4 billion.
It is understood that American diplomats had raised the issue of overpopulation with the Indian delegation during talks when US secretary of state, Hillary Clinton, visited New Delhi earlier this year.
Ramesh said that at "today's state of development" India could not and should not accept "legally binding reduction targets". The minister added that the Indian government saw per capita emissions rising from one tonne of carbon dioxide to "three or four" by 2030.
"For us this is about survival. We need to put electricity into people's homes and do it cleanly. You in the west need to live with only one car rather than three. For you it is about luxury. For us survival."
The Indian government – along with 37 other developing nations – has argued that rich nations such as the US should set a goal of cutting emissions by 40% from 1990 levels by 2020.
"Once developed countries have shown demonstrable proof of their seriousness then India can think of going to next stage. At a time when every (rich) country is in violation of the Kyoto protocol obligation to ask China and India to take on legal targets smacks of hypocrisy."
Finance is one of the key sticking points, as poorer nations demand huge amounts of cash to buy technologies and adapt their nations to climate change. Richer nations have proved reluctant to commit. One recent estimate, highlighted by Pakistan's chief Copenhagen negotiator, Farrukh Iqbal Khan, who has worked closely with Indian counterparts, put the cost at £265bn a year.
Asked what he might say to the UK climate change minister, Ed Miliband, who arrives next week, Ramesh said pointed out that the only leader to come up with a "concrete offer (of money)" was Gordon Brown. "He said earlier this year that there should be a fund of $100bn (£60bn). We don't know if that is every year or what. But it is an offer on the table."
Ramesh, who has just returned from Beijing, said that India and China had agreed to "coordinate all actions" before multilateral meetings. He said that the only difference was that a Chinese thinktank had called for Beijing to "peak emissions" by 2030. Ramesh said the Chinese chief negotiator on climate change had assured him that this was "thinktank policy not government policy".