Thursday, 24 December 2009

Centrica feels wind in its sails after farm disposal

Peter Stiff: Market report

Skegness may be bracing, but perhaps it was that very quality that allowed Centrica to sell half a wind farm only five miles off the coast of the Lincolnshire seaside resort yesterday.
Shares in the British Gas owner rose 3.2p to 276.4p after it said that it had sold a 50 per cent stake in the 270-megawatt offshore wind farm to Dong Energy and Siemens Project Ventures for £50 million.
The two European groups will also reimburse Centrica for half of the development costs incurred to date. The total investment in the project is expected to be about £750 million, with Centrica’s share being £375 million. Construction of the wind farm is planned to start in 2010, with first power expected in the second half of 2012.
As a result of the deal, the project will use new wind turbines, which are said to be more powerful. Centrica will continue to lead the project and its British Gas business will take 75 per cent of the wind farm’s electricity production.

Dong, which is an experienced player in offshore wind projects, has also agreed to sell a 25.1 per cent stake in its 367MW Walney offshore wind farm in the Irish Sea to Scottish & Southern Energy, up 2p at £11.47, for £39 million.
Overall, the FTSE 100’s so-called Santa Claus Rally continued in earnest, with the blue-chip index briefly trading above its highest level in more than a year, before falling back in the afternoon after disappointing American new home sales data. It closed 43.72 points up at 5,372.38 after another day of weak volumes. The market will open for half a day today before closing for Christmas.
The mining sector was the biggest driver of the gains, responsible for eight of the index’s top ten risers, amid higher metal prices. Copper, for instance, rose nearly 2 per cent ahead of a strike in Chile, one of the world’s top miners of the metal. There was also speculation of increased demand from China and the United States.
Eurasian Natural Resources was the biggest gainer, climbing 33p to 901p. Xstrata rose 29½p to £10.71½ and Rio Tinto was up 80p at £32.96. Sentiment towards the sector was also buoyed after Glencore, the Swiss commodity trader, signalled that it was likely to seek an initial public offering that would value it at $35 billion.
Oil groups such as Royal Dutch Shell, up 29p to £18.97½, and BP, up 6.8p at 604.3p, also gained on the back of stronger oil prices, which rose after inventory data showed that crude oil stocks fell much more than expected last week. However, Tullow Oil fell 11p to £12.69, despite an upbeat drilling update.
BT Group was one of the biggest fallers, ending the day down 4.3p at 137½p, as the telecoms group traded without rights to its latest dividend.
In the FTSE 250, Premier Oil fell 11p to £10.79 after it plugged and abandoned a well in Vietnam after failing to find significant hydrocarbons.
BSS also slid, closing 2p down at 238p, after Goldman Sachs revised down its earnings estimates for next year and 2011, citing pressure on margins in its domestic and specialist division.
• New York: Disappointing data on new home sales kept shares largely flat on Wall Street. At the close, the Dow Jones industrial average was 1.51 points up at 10,466.44.

Pachauri: Copenhagen a Good Outcome

NEW DELHI --The climate change accord reached at the Copenhagen summit is a good outcome but is inadequate to combat global warming, the head of the United Nations' Intergovernmental Panel on Climate Change said Wednesday.
R.K. Pachauri--also the director general of India's The Energy and Resources Institute, or TERI -- told reporters that the accord "provides the foundation on which we can build upon for emission reduction."
However, the pact doesn't specify the level to which developed nations will have to cut their emissions by 2020, he said at a TERI event on the implications of the Copenhagen accord and sustainable development.
The two-week long United Nations climate change conference, which ended last week in the Danish capital, resulted in a U.S.-brokered agreement that sets a commitment to limit global warming to two degrees Celsius. The pact didn't spell out emission reduction goals for 2020 or 2050, which is key to limiting the rise in global temperatures.
"Global emissions must peak no later than 2015," said Mr. Pachauri, chairman of the UN panel which along with former U.S. Vice President Al Gore had won the 2007 Nobel Peace Prize for spreading awareness about climate change.
"If we deviate from the optimum path, then the human impact on climate change would be far too serious," he said, adding that the cost of not maintaining the two degree Celsius limit on the increase in Earth's temperature would be too high.
The agreement was struck at the last minute between the U.S. and developing countries China, Brazil, India and South Africa after several days of wrangling.
Mr. Pachauri said the emergence of the BASIC group--the term given to the four fast-growing developing nations--is one of the significant events of Copenhagen.
Despite some differences within the BASIC group on certain issues, developed nations will not be able to ignore these countries, Mr. Pachauri said.
"Whatever agreement happens in Mexico in 2010 will necessarily have to deal with the power of this group," he added.
The next climate change summit is scheduled to be held in Mexico City in December 2010.
Commenting on India's climate change stand, Mr. Pachauri said India must not give the impression of being selfish and must work together with small island nations and underdeveloped African countries.
He favored protecting the general provisions of the Kyoto Protocol, a 1997 global-warming accord that doesn't require developing nations, including India and China, to make cuts in greenhouse gas emissions.
The Kyoto Protocol also entitles poor countries to receive aid from rich nations to adopt clean energy technologies.
Mr. Pachauri said there was some apprehension during the Copengahen summit that developed countries were trying to pass on the burden of mitigating climate change to the developing nations.
He said a binding agreement to cut emissions would have been adequate to fight global warming, while developed countries should have committed the finances they are willing to part with.
Write to Sunil Raghu at

Plants and animals race for survival as climate change creeps across the globe

Lowland tropics, mangroves and deserts at greater risk than mountainous areas as global warming spreads, study finds

David Adam, Wednesday 23 December 2009 18.20 GMT

Global warming creeps across the world at a speed of a quarter of a mile each year, according to a new study that highlights the problems that rising temperatures pose to plants and animals. Species that can tolerate only a narrow range of temperatures will need to move as quickly if they are to survive. Wildlife in lowland tropics, mangroves and desert areas are at greater risk than species in mountainous areas, the study suggests.
"These are the conditions that will set the stage, whether species move or cope in place," said Chris Field, director of the department of global ecology at the Carnegie Institution in the US, who worked on the project. "Expressed as velocities, climate change projections connect directly to survival prospects for plants and animals."
The study, by scientists at the Carnegie Institution, Stanford University, the California Academy of Sciences, and the University of California, Berkeley, combined information on current and projected future climate to calculate a "temperature velocity" for different parts of the world.
They found that mountainous areas will have the lowest velocity of temperature change, meaning that animals will not need to move very far to stay in the temperature range of their natural habitat. However, much larger geographic displacements are required in flatter areas such as flooded grasslands, mangroves and deserts, in order for animals to keep pace with their climate zone. The researchers also found that most currently protected areas are not big enough to accommodate the displacements required.
Healy Hamilton, director of the centre for applied biodiversity informatics at the California Academy of Sciences, said: "One of the most powerful aspects of this data is that it allows us to evaluate how our current protected area network will perform as we attempt to conserve biodiversity in the face of global climate change."
He added: "When we look at residence times for protected areas, which we define as the amount of time it will take current climate conditions to move across and out of a given protected area, only 8% of our current protected areas have residence times of more than 100 years. If we want to improve these numbers, we need to both reduce our carbon emissions and work quickly towards expanding and connecting our global network of protected areas."
The study found that global warming would have the lowest velocities in tropical and subtropical coniferous forests, where it would move at about 80 metres a year, and montane grasslands and shrublands - a biome with grass and shrubs at high elevations - with a projected velocity of about 110 metres each year.
Global warming is expected to sweep more quickly across flatter areas, such as mangrove swamps and flooded grasslands and savannas, where it could have velocities above 1km a year. Across the world, the average velocity is 420 metres each year. The results are published in the journal Nature.
Wildlife in areas with low projected climate change velocities are not necessarily better protected, the scientists point out. Habitats such as broadleaf forests are often small and fragmented, which makes it harder for species to move.
The study examines the movement of climate zones, not species, the scientists stress, which means it is difficult to predict what the impacts may be on individual trees, insects and animals. Some are more tolerant to changing temperature than others, and the movement of species can be difficult to track. While trees are estimated to have spread northwards through a warming Europe after the end of the last ice age at a speed of about 1km per year, this could be down to dormant seeds reseeding the landscape, which would not be possible if species are forced to shift to new territories.
The scientists say that global warming will cause temperatures to change so rapidly that almost a third of the globe could see climate velocities higher than even the most optimistic estimates of plant migration speeds.
Some plants and animals may have to be physically moved by humans to help them cope, the scientists say, while protected areas must also be enlarged and joined together.