Tricia Holly Davis
BRITAIN will go cap in hand to Middle East oil producers this week to seek funds to prop up the recession-hit green energy industry.
Every year Abu Dhabi, holder of 8% of the world’s oil reserves, hosts the World Future Energy Summit, a showcase event for the $3 trillion (£1.8 trillion) global clean technology sector.
UK Trade & Investment (UKTI), the international business development organisation, has sent its biggest delegation to the event, which opens tomorrow, in the hope of helping British firms get cash from oil-rich backers. Last year investment in the sector collapsed by a third, according to Cleantech Group, a research firm.
“The Middle East is known for its huge oil industry but British companies are visiting the region to highlight cutting-edge sustainable energy,” said Sir Andrew Cahn, UKTI’s chief executive.
Ed Miliband, the energy secretary, will also be attending the summit.
Abu Dhabi has the world’s largest sovereign wealth fund after China, estimated to be worth $700 billion. It may have been built up through oil but in recent years the emirate has invested billions in an effort to transform itself into a global hub of green technology.
It has also invested its money abroad, backing big projects such as the London Array, the wind farm proposed off the Thames estuary.
The government is hoping that it and other wealthy Arab investors can plug the financing hole. “Given the liquidity in the Middle East, the region is a key source of finance for the future energy sector and is helping to fill the gap left by the recession,” said Simon Currie of Norton Rose, the law firm.
Dean Cook, head of I-CanNano, a London nano-technology company, is heading to Abu Dhabi in search of capital. His firm’s technology can be used to make lightweight plastics to replace heavier steel car frames. “We’re very excited about the prospects in the Middle East,” he said.
Plumina, a Newcastle-based developer of low-energy street lamps, landed a multi-million pound contract to install more efficient highway lighting in Qatar.
Tim Cantle-Jones, the chief executive, has already raised $2m from Middle East investors to develop heat controls that allow LED lights to withstand extreme desert temperatures. He hopes to get fresh funding to build two manufacturing plants, one of which will be in Britain.
The irony of petrodollars funding a green industry is not lost on investors. “It’s not normal for an oil economy that is thriving to go into renewable energy,” said Azhar Iqbal Qureshiof Al Sarya, a Qatari investor who over the next three years will put $700m into green businesses.
“The Arab world realises that we need to change our image and look for new business opportunities. We have trillions of dollars to spend — it can’t all go toward oil.”
Sunday, 17 January 2010
Greenhouse Effects: Raising chickens
Tony Juniper
If you have a garden, why not get some chickens? It may not feel like it at the moment, but spring is not that far away, so this is a good time to think about whether they might work for you.
After consistent lobbying from one of our children, we got some a few years ago. We bought an incubator, got fertile eggs from a local rare-breed farm and hatched our own chicks. It was a great thing to do, but, as well as a couple of hens, we finished up with a cockerel. His early-morning crowing gained a mixed reception locally, so he’s gone to live in the country. We have since bought more hens from a local breeder, and now have a flock of six laying birds.
We keep them in a wooden-framed run, covered with mesh attached to an old shed. They have sufficient indoor and outdoor space to be content, but come into the garden as well. You can make your own hen house and run, but there are dozens of good designs on the market (poultry.allotment.org.uk).
We feed ours pellets, grain and kitchen waste. We put straw on the brick floor of the outside run and a product called Hemcore in the shed. Inside are a couple of nest boxes and various perches.
Before you take the plunge, do pause to think. Do you have space for a fox-proof hut and run? Will someone clean, feed and water them, even in midwinter? Do you have room to store food and fresh straw? Is there somewhere to put waste straw and droppings?
If you think it will work, there is nothing nicer than picking eggs from a straw-lined nest box, taking them indoors and making breakfast. If you have children, chickens are a wonderful way to help them understand the source of food and to have a connection with at least some of it.
Tony Juniper is an environmental campaigner and former director of Friends of the Earth; tonyjuniper.com
If you have a garden, why not get some chickens? It may not feel like it at the moment, but spring is not that far away, so this is a good time to think about whether they might work for you.
After consistent lobbying from one of our children, we got some a few years ago. We bought an incubator, got fertile eggs from a local rare-breed farm and hatched our own chicks. It was a great thing to do, but, as well as a couple of hens, we finished up with a cockerel. His early-morning crowing gained a mixed reception locally, so he’s gone to live in the country. We have since bought more hens from a local breeder, and now have a flock of six laying birds.
We keep them in a wooden-framed run, covered with mesh attached to an old shed. They have sufficient indoor and outdoor space to be content, but come into the garden as well. You can make your own hen house and run, but there are dozens of good designs on the market (poultry.allotment.org.uk).
We feed ours pellets, grain and kitchen waste. We put straw on the brick floor of the outside run and a product called Hemcore in the shed. Inside are a couple of nest boxes and various perches.
Before you take the plunge, do pause to think. Do you have space for a fox-proof hut and run? Will someone clean, feed and water them, even in midwinter? Do you have room to store food and fresh straw? Is there somewhere to put waste straw and droppings?
If you think it will work, there is nothing nicer than picking eggs from a straw-lined nest box, taking them indoors and making breakfast. If you have children, chickens are a wonderful way to help them understand the source of food and to have a connection with at least some of it.
Tony Juniper is an environmental campaigner and former director of Friends of the Earth; tonyjuniper.com
Scottish Power's Nick Horler reveals 'carbon capture hubs' scheme
Published Date: 17 January 2010
By Erikka Askeland
SCOTTISHPOWER chief executive Nick Horler has revealed plans to develop a series of carbon capture hubs across the UK as he steps up moves to tackle greenhouse gas emissions.
Horler says the company and its partners in developing the technology – Shell and the National Grid – want to install the hubs in factories, foundries and refineries in the Forth Valley, Teesside and on the Thames. He says the plan could remove 500 megatonnes of carbon dioxide from the environment annually for more than 100 years – roughly the equivalent of taking 275 million cars off the road. "If you look at the Forth Valley it emits about 15 million tons of carbon a year. You are talking about refineries, steel mills, foundries. Stretch down to the north-east of England, Tyneside and Teesside, it is even more," he said after addressing an audience in Aberdeen. "Imagine if we took it further and linked up the steel mills, the paper mills and the cement manufacturers too. That's possibly up to 500 megatonnes of CO2 every year for the next hundred years. So if you can start to create capture hubs, we are talking about a vision whereby we can decarbonise a lot of UK industry."Horler intends to exploit the "wonderful accident of geography" which makes the North Sea so suitable for burying carbon. He cites a study carried out by the Scottish Centre for Carbon Capture which said the "unique geology" of the central North Sea would be suitable to accommodate all of Europe's CO2 until well into the next century.He also sees a use for the existing networks of pipes and wells to tuck away extracted carbon.The plan is currently dependent on ScottishPower winning a £1 billion government grant to test carbon capture technology at its coal powered plant at Longannet, in Fife. ScottishPower is heading up one of two bids to win the funding. The scheme involves retro-fitting carbon capture technology, capturing 20 per cent of the station's carbon emissions. If the plan goes ahead, it will be the largest carbon capture scheme in the world."There are about 70 projects running around the world but nothing of this scale or ambition," said Horler. The government has set a deadline for the scheme to be up and running by 2014. E.on, which is competing with ScottishPower for the funding, recently announced a delay in the building of its Kingsnorth coal-fired power station in Kent, which is now not expected to be up and running until 2016.ScottishPower has brought together a team of companies to get the project off the ground. The technology will be provided by Norwegian firm Aker Clean Carbon, while National Grid will transport the carbon and Shell will bury it in the North Sea. Consultancy Accenture will work with ScottishPower to make the technology available to other coal-burning stations. Horler estimates there are 20,000 such stations around the world that could use its carbon capture system, ushering in "clean coal" use on an international scale. He insists coal remains an essential part of the mix required to meet growing energy demand in the UK. ScottishPower and its parent company Iberdrola of Spain are currently pursuing projects across the spectrum of power generation. It has established a joint venture with Perth-based Scottish & Southern Energy to develop nuclear power stations in the UK. It is working with SSE to build the controversial Beauly to Denny power line that recently received government backing. It is also currently one of the largest windfarm developers and operators in the UK and is testing a Norwegian wave power device off Orkney."Coal has an important part of the mix so long as we can do something about the CO2," said Horler. "Coal-powered stations are flexible, so the performance can be flexed to meet demand. It is a source of fuel that is indigenous to the UK and therefore we aren't subjected to the price volatily that might be associated with international supply and demand of gas. It has its place."
By Erikka Askeland
SCOTTISHPOWER chief executive Nick Horler has revealed plans to develop a series of carbon capture hubs across the UK as he steps up moves to tackle greenhouse gas emissions.
Horler says the company and its partners in developing the technology – Shell and the National Grid – want to install the hubs in factories, foundries and refineries in the Forth Valley, Teesside and on the Thames. He says the plan could remove 500 megatonnes of carbon dioxide from the environment annually for more than 100 years – roughly the equivalent of taking 275 million cars off the road. "If you look at the Forth Valley it emits about 15 million tons of carbon a year. You are talking about refineries, steel mills, foundries. Stretch down to the north-east of England, Tyneside and Teesside, it is even more," he said after addressing an audience in Aberdeen. "Imagine if we took it further and linked up the steel mills, the paper mills and the cement manufacturers too. That's possibly up to 500 megatonnes of CO2 every year for the next hundred years. So if you can start to create capture hubs, we are talking about a vision whereby we can decarbonise a lot of UK industry."Horler intends to exploit the "wonderful accident of geography" which makes the North Sea so suitable for burying carbon. He cites a study carried out by the Scottish Centre for Carbon Capture which said the "unique geology" of the central North Sea would be suitable to accommodate all of Europe's CO2 until well into the next century.He also sees a use for the existing networks of pipes and wells to tuck away extracted carbon.The plan is currently dependent on ScottishPower winning a £1 billion government grant to test carbon capture technology at its coal powered plant at Longannet, in Fife. ScottishPower is heading up one of two bids to win the funding. The scheme involves retro-fitting carbon capture technology, capturing 20 per cent of the station's carbon emissions. If the plan goes ahead, it will be the largest carbon capture scheme in the world."There are about 70 projects running around the world but nothing of this scale or ambition," said Horler. The government has set a deadline for the scheme to be up and running by 2014. E.on, which is competing with ScottishPower for the funding, recently announced a delay in the building of its Kingsnorth coal-fired power station in Kent, which is now not expected to be up and running until 2016.ScottishPower has brought together a team of companies to get the project off the ground. The technology will be provided by Norwegian firm Aker Clean Carbon, while National Grid will transport the carbon and Shell will bury it in the North Sea. Consultancy Accenture will work with ScottishPower to make the technology available to other coal-burning stations. Horler estimates there are 20,000 such stations around the world that could use its carbon capture system, ushering in "clean coal" use on an international scale. He insists coal remains an essential part of the mix required to meet growing energy demand in the UK. ScottishPower and its parent company Iberdrola of Spain are currently pursuing projects across the spectrum of power generation. It has established a joint venture with Perth-based Scottish & Southern Energy to develop nuclear power stations in the UK. It is working with SSE to build the controversial Beauly to Denny power line that recently received government backing. It is also currently one of the largest windfarm developers and operators in the UK and is testing a Norwegian wave power device off Orkney."Coal has an important part of the mix so long as we can do something about the CO2," said Horler. "Coal-powered stations are flexible, so the performance can be flexed to meet demand. It is a source of fuel that is indigenous to the UK and therefore we aren't subjected to the price volatily that might be associated with international supply and demand of gas. It has its place."
SeaEnergy seeks China wind partner
Jane Bradley
A firm behind one of the new offshore wind farm consortia announced for Scotland, SeaEnergy Renewables, is in talks with Chinese energy companies about joint venture projects there.
The Aberdeen-based Sea-Energy, formerly Ramco, wants to tap into the Chinese wind farm market, one of the biggest in the world.
“We want to form an agreement there with a key player with whom we can partner,” said Allan MacAskill, the company’s business development director. “We want to be a minority partner with a local business. It’s a long, slow process, but it will be worth it.”
Representatives from the company recently spent more than a month in China, where the government aims to have 100gW of wind power capacity installed by 2020.
SeaEnergy is a 25% stakeholder in the winning consortium behind the proposed Moray Firth offshore wind farm, part of the Crown Estate’s round-three licensing programme.
EDP Renovaveis, the Portuguese renewable-energy giant, is the bigger player in the Scottish project, which is set to involve the construction of a wind farm featuring about 250 turbines, stretching from 16 miles off the northeast coast in an area known as the Smith Bank.
A firm behind one of the new offshore wind farm consortia announced for Scotland, SeaEnergy Renewables, is in talks with Chinese energy companies about joint venture projects there.
The Aberdeen-based Sea-Energy, formerly Ramco, wants to tap into the Chinese wind farm market, one of the biggest in the world.
“We want to form an agreement there with a key player with whom we can partner,” said Allan MacAskill, the company’s business development director. “We want to be a minority partner with a local business. It’s a long, slow process, but it will be worth it.”
Representatives from the company recently spent more than a month in China, where the government aims to have 100gW of wind power capacity installed by 2020.
SeaEnergy is a 25% stakeholder in the winning consortium behind the proposed Moray Firth offshore wind farm, part of the Crown Estate’s round-three licensing programme.
EDP Renovaveis, the Portuguese renewable-energy giant, is the bigger player in the Scottish project, which is set to involve the construction of a wind farm featuring about 250 turbines, stretching from 16 miles off the northeast coast in an area known as the Smith Bank.
Methane galore on whisky island
Distillery waste will be converted into gas to help make Islay self-sufficient in green energy.
Jonathan Leake
Energy from whisky? Lovers of the amber spirit may think it sounds like the environment movement’s worst-ever idea but the Scottish island of Islay is pioneering a system that uses whisky to create green energy.
Bruichladdich Distillery is to build an anaerobic digester to convert thousands of tons of yeasty waste into methane gas, which will be burned to make electricity.
Islay is home to some of Scotland’s best-known whiskies. Seven other distilleries on the island — Ardbeg, Laphroaig, Lagavulin, Bowmore, Caol Ila, Bunnahabhain and Kilchoman — are understood to be considering similar schemes.
If the idea is a success, the distilleries could end up generating much of the island’s electricity and may even have enough gas left over to power vehicles.
Mark Reynier, the owner of Bruichladdich Distillery, said: “We are going to install two anaerobic digesters on our site where the waste will be broken down to produce biogas, which can then be burnt to make electricity. In theory, it could meet all our power needs.”
The first digester will be installed next month. The innovation is driven by several factors. One is the whisky industry’s growing concern over its product’s carbon footprint, thought to be one of the highest for any food or drink.
None of the main distillers will release figures but the process of distilling alone is highly energy intensive. Added to this is the fact that most whisky is exported in heavy bottles and elaborate packaging.
On Islay, there is also the environmental impact of the many tons of distillery waste, which is disposed of in the sea each week. A pipeline carries this waste to the Sound of Islay.
Reynier, whose plant produces 46,000 12-bottle cases a year, spends £20,000 a year simply on ferrying waste in tankers from his distillery to the pipeline terminal. The anaerobic digestion system should remove this cost as well as supplying 80% of the power the distillery requires, currently costing £36,000 a year. These savings will be augmented by government subsidies for renewable power generation.
Reynier said: “The digesters will cost about £300,000 in capital outlay so it should take just three to five years to recoup the cost.”
He hopes to use such innovation to help market Bruichladdich as one of the greenest whiskies. “Whisky has a very high carbon footprint,” said Reynier. “We have already cut it by using locally grown and organic barley rather than importing it, and these digesters will bring it down further.” Indeed, Diageo, the drinks giant, has invested in a similar scheme at its Cameronbridge distillery.
There are other reasons for the distilleries’ interest in the technology. Islay has an antiquated power supply based on a single cable from the mainland, and voltage fluctuations exacerbated by the distilleries’ demands can cause problems with computers and other electronic equipment. Generating power on the island would help reduce this problem.
Anaerobic digestion works by allowing bacteria to break down organic waste without oxygen. This means the bacteria cannot digest the waste completely so, instead of just producing carbon dioxide they produce methane, the main constituent of natural gas.
Such systems have been known for a long time but initially they were industrial-scale installations based on huge “reactor tanks”. The waste has to be collected and brought to them, and it then takes about 30 days for bacteria to break down a single large tankful of waste. This makes such systems impractical for most small businesses. In recent years, however, systems have been developed that have reduced the size of the reactor tanks, and this allows a single tank to be processed in a matter of hours.
Bruichladdich’s system is being built by Biowayste, a Northamptonshire firm that has installed five such plants, including at Muntons, a brewing company in Suffolk, and at Orchard House Foods in Northamptonshire. It has eight others in the pipeline or under construction.
Barry Howard, chairman of Biowayste, said: “There are 5,000 small food manufacturers around Britain, all generating waste material and then paying to get rid of it. We can take that waste and turn it into electricity on their own sites, saving them money on waste disposal and power. We can also use the system to generate heat for their factories.”
The green nature of the power and the capture of the heat makes such systems lucrative. Each megawatt hour of power attracts two government renewables obligation certificates, one for the power and one for the re-use of the heat. These can be sold for a profit to other companies needing to offset their pollution.
Howard believes that Islay is ideally placed to benefit from the technology. “The whisky distillers are increasingly aware of their environmental impact, so if we can prove our systems at Bruichladdich work, I hope we will get the other seven distilleries interested, too.”
The project will delight Islay’s environmental movement, which is strongly supported by the 3,200-strong population on the south Hebridean island. There is already a wave-power system near Portnahaven, which supplies electricity for the island’s grid. Islay Energy Trust and Scottish Power Renewables have plans for 10 tidal turbines fixed to the seabed in the Sound of Islay. This is a tidal race where the currents are strong and therefore ideal for generating power.
David Protherough, project manager at Re-jig (Recycle — Jura/Islay Group), said the distillery project would help to cut tanker traffic on the island’s roads and also reduce marine pollution. “We have spoken to the managers of the distilleries on the island and they are keen. Our hope is that the distilleries will make so much biogas that there will be enough to power some of the island’s vehicles too.
“If you put it all together with the wave and tidal power systems, Islay could be one of the greenest communities in Britain,” said Protherough.
Jonathan Leake
Energy from whisky? Lovers of the amber spirit may think it sounds like the environment movement’s worst-ever idea but the Scottish island of Islay is pioneering a system that uses whisky to create green energy.
Bruichladdich Distillery is to build an anaerobic digester to convert thousands of tons of yeasty waste into methane gas, which will be burned to make electricity.
Islay is home to some of Scotland’s best-known whiskies. Seven other distilleries on the island — Ardbeg, Laphroaig, Lagavulin, Bowmore, Caol Ila, Bunnahabhain and Kilchoman — are understood to be considering similar schemes.
If the idea is a success, the distilleries could end up generating much of the island’s electricity and may even have enough gas left over to power vehicles.
Mark Reynier, the owner of Bruichladdich Distillery, said: “We are going to install two anaerobic digesters on our site where the waste will be broken down to produce biogas, which can then be burnt to make electricity. In theory, it could meet all our power needs.”
The first digester will be installed next month. The innovation is driven by several factors. One is the whisky industry’s growing concern over its product’s carbon footprint, thought to be one of the highest for any food or drink.
None of the main distillers will release figures but the process of distilling alone is highly energy intensive. Added to this is the fact that most whisky is exported in heavy bottles and elaborate packaging.
On Islay, there is also the environmental impact of the many tons of distillery waste, which is disposed of in the sea each week. A pipeline carries this waste to the Sound of Islay.
Reynier, whose plant produces 46,000 12-bottle cases a year, spends £20,000 a year simply on ferrying waste in tankers from his distillery to the pipeline terminal. The anaerobic digestion system should remove this cost as well as supplying 80% of the power the distillery requires, currently costing £36,000 a year. These savings will be augmented by government subsidies for renewable power generation.
Reynier said: “The digesters will cost about £300,000 in capital outlay so it should take just three to five years to recoup the cost.”
He hopes to use such innovation to help market Bruichladdich as one of the greenest whiskies. “Whisky has a very high carbon footprint,” said Reynier. “We have already cut it by using locally grown and organic barley rather than importing it, and these digesters will bring it down further.” Indeed, Diageo, the drinks giant, has invested in a similar scheme at its Cameronbridge distillery.
There are other reasons for the distilleries’ interest in the technology. Islay has an antiquated power supply based on a single cable from the mainland, and voltage fluctuations exacerbated by the distilleries’ demands can cause problems with computers and other electronic equipment. Generating power on the island would help reduce this problem.
Anaerobic digestion works by allowing bacteria to break down organic waste without oxygen. This means the bacteria cannot digest the waste completely so, instead of just producing carbon dioxide they produce methane, the main constituent of natural gas.
Such systems have been known for a long time but initially they were industrial-scale installations based on huge “reactor tanks”. The waste has to be collected and brought to them, and it then takes about 30 days for bacteria to break down a single large tankful of waste. This makes such systems impractical for most small businesses. In recent years, however, systems have been developed that have reduced the size of the reactor tanks, and this allows a single tank to be processed in a matter of hours.
Bruichladdich’s system is being built by Biowayste, a Northamptonshire firm that has installed five such plants, including at Muntons, a brewing company in Suffolk, and at Orchard House Foods in Northamptonshire. It has eight others in the pipeline or under construction.
Barry Howard, chairman of Biowayste, said: “There are 5,000 small food manufacturers around Britain, all generating waste material and then paying to get rid of it. We can take that waste and turn it into electricity on their own sites, saving them money on waste disposal and power. We can also use the system to generate heat for their factories.”
The green nature of the power and the capture of the heat makes such systems lucrative. Each megawatt hour of power attracts two government renewables obligation certificates, one for the power and one for the re-use of the heat. These can be sold for a profit to other companies needing to offset their pollution.
Howard believes that Islay is ideally placed to benefit from the technology. “The whisky distillers are increasingly aware of their environmental impact, so if we can prove our systems at Bruichladdich work, I hope we will get the other seven distilleries interested, too.”
The project will delight Islay’s environmental movement, which is strongly supported by the 3,200-strong population on the south Hebridean island. There is already a wave-power system near Portnahaven, which supplies electricity for the island’s grid. Islay Energy Trust and Scottish Power Renewables have plans for 10 tidal turbines fixed to the seabed in the Sound of Islay. This is a tidal race where the currents are strong and therefore ideal for generating power.
David Protherough, project manager at Re-jig (Recycle — Jura/Islay Group), said the distillery project would help to cut tanker traffic on the island’s roads and also reduce marine pollution. “We have spoken to the managers of the distilleries on the island and they are keen. Our hope is that the distilleries will make so much biogas that there will be enough to power some of the island’s vehicles too.
“If you put it all together with the wave and tidal power systems, Islay could be one of the greenest communities in Britain,” said Protherough.
Saturday, 16 January 2010
ERI Offers a Refreshing Investment in a Thirsty World
By LIAM DENNING
Coleridge's "The Rime of the Ancient Mariner" bewailed seeing "Water, water, every where, Nor any drop to drink."
If only he had packed a seawater reverse osmosis desalination unit, he would have been fine—although, admittedly, poetic rhythm would have suffered a tad.
We will need to claim ever more fresh water from the briny seas in the years to come. The United Nations expects the global population to expand by three billion people by 2050, many in developing regions without sustainable access to safe drinking water. Growing demand for food will add pressure, given that 70% of water consumed is for crop irrigation.
Treating seawater to remove salt, either by heating it or forcing it through membranes (reverse osmosis), is one way to cope. About 60 million cubic meters a day of desalination capacity exists world-wide, according to Global Water Intelligence. That's up more than 12% from 2008 but still represents only 1% of global consumption.
Energy Recovery Inc. offers an investment angle. ERI makes advanced pressure exchangers, which capture and recycle up to 98% of excess energy otherwise wasted in reverse osmosis desalination. Energy represents the single-biggest cost in desalination. ERI's patented technology captures more energy than older products and requires less maintenance.
ERI shares were listed in July 2008 at $8.50 a share. Its stock has been volatile and Friday closed at $6.57. Besides general market turmoil, frozen credit markets and lower oil prices–arid Middle Eastern countries are big buyers—have delayed big desalination projects. In April, a competitor of ERI, Calder AG, was acquired by Flowserve Corp. Calder's technology has much lower market share. But it is now part of an industrial group with a market capitalization of $5.9 billion, compared with ERI's $344 million.
Despite delays, though, the long-term growth story remains intact. ERI's proprietary technology and net cash position provide resilience. The consensus earnings estimate for 2011 is 25 cents a share, implying a heady multiple of 26.3 times. But Jefferies & Co. estimates each incremental one million cubic meters a day of desalination capacity built translates to a $17.5 million revenue opportunity for ERI assuming its current market share, or three cents a share of earnings.
Moreover, some 43% of ERI's revenue is spent on research and development, sales, marketing and administrative expenses. That should be leveraged across more end markets to improve margins. Last month's acquisition of smaller rival Pump Engineering LLC, expanding ERI's product range and addressable markets, was a step toward this.
Water stress, climate change, expensive energy, and infrastructure needs weigh on the global outlook like the proverbial albatross. ERI represents one way of investing in efforts to address the burden.
Write to Liam Denning at liam.denning@wsj.com
Coleridge's "The Rime of the Ancient Mariner" bewailed seeing "Water, water, every where, Nor any drop to drink."
If only he had packed a seawater reverse osmosis desalination unit, he would have been fine—although, admittedly, poetic rhythm would have suffered a tad.
We will need to claim ever more fresh water from the briny seas in the years to come. The United Nations expects the global population to expand by three billion people by 2050, many in developing regions without sustainable access to safe drinking water. Growing demand for food will add pressure, given that 70% of water consumed is for crop irrigation.
Treating seawater to remove salt, either by heating it or forcing it through membranes (reverse osmosis), is one way to cope. About 60 million cubic meters a day of desalination capacity exists world-wide, according to Global Water Intelligence. That's up more than 12% from 2008 but still represents only 1% of global consumption.
Energy Recovery Inc. offers an investment angle. ERI makes advanced pressure exchangers, which capture and recycle up to 98% of excess energy otherwise wasted in reverse osmosis desalination. Energy represents the single-biggest cost in desalination. ERI's patented technology captures more energy than older products and requires less maintenance.
ERI shares were listed in July 2008 at $8.50 a share. Its stock has been volatile and Friday closed at $6.57. Besides general market turmoil, frozen credit markets and lower oil prices–arid Middle Eastern countries are big buyers—have delayed big desalination projects. In April, a competitor of ERI, Calder AG, was acquired by Flowserve Corp. Calder's technology has much lower market share. But it is now part of an industrial group with a market capitalization of $5.9 billion, compared with ERI's $344 million.
Despite delays, though, the long-term growth story remains intact. ERI's proprietary technology and net cash position provide resilience. The consensus earnings estimate for 2011 is 25 cents a share, implying a heady multiple of 26.3 times. But Jefferies & Co. estimates each incremental one million cubic meters a day of desalination capacity built translates to a $17.5 million revenue opportunity for ERI assuming its current market share, or three cents a share of earnings.
Moreover, some 43% of ERI's revenue is spent on research and development, sales, marketing and administrative expenses. That should be leveraged across more end markets to improve margins. Last month's acquisition of smaller rival Pump Engineering LLC, expanding ERI's product range and addressable markets, was a step toward this.
Water stress, climate change, expensive energy, and infrastructure needs weigh on the global outlook like the proverbial albatross. ERI represents one way of investing in efforts to address the burden.
Write to Liam Denning at liam.denning@wsj.com
India State Oil Firms May Invest $15 Billion Next Year
By SUNIL RAGHU AND RAKESH SHARMA
NEW DELHI -- India's state-run oil and gas companies plan to raise their total investment by about a fifth in the next financial year to raise crude output, expand refineries and produce cleaner fuels, a senior government official said Friday.
The companies are likely to end the current fiscal year through March with a total investment of 580.95 billion rupees and plan to spend 694.58 billion rupees ($15 billion) next year, the official, who didn't wish to be identified, told Dow Jones Newswires.
Indian energy companies are increasing investment to meet rising demand for fuels in the world's second-fastest growing major economy. India's top policy think tank, the Planning Commission, has forecast the economy to grow at 9% between April 2007 and March 2012.
The federal government aims to raise spending in the sector to assure energy security through higher local output and investment in oil equity abroad. The South Asian nation currently imports more than three-fourths of its crude oil needs.
Oil & Natural Gas Corp., India's largest explorer, is likely to raise capital expenditure next year by about 7% to 265.23 billion rupees as it speeds up drilling at exploratory blocks, including the Cauvery and western offshore basins, the official said.
ONGC--which contributed about three quarters of India's crude oil output and two-thirds of natural gas production in the last fiscal year--hasn't kept up with output targets as its fields are ageing and it hasn't brought any new blocks into production for many years.
The company had planned to invest 208.68 billion rupees this financial year, which is now estimated at 247.20 billion rupees due to an increase in exploratory targets, higher rig charter rates and a rise in offshore drilling wells for marginal fields, the official said.
ONGC's overseas investment arm, ONGC Videsh Ltd., will step up spending by 23% next fiscal year to 86.63 billion rupees on its assets in Nigeria, Russia's Sakhalin, Sudan, Vietnam, Myanmar and Brazil.
OVL produced 8.77 million metric tons oil and oil equivalent gas in the last financial year. It has set a target to produce 20 million metric tons a year of oil and oil equivalent gas by 2020.
Oil India Ltd., the nation's second-largest oil producer, expects to invest 44.65 billion rupees in the next fiscal year, up 88%. It has set aside 20 billion rupees to acquire overseas assets.
Indian Oil Corp. plans to spend INR128.25 billion in the next fiscal year, up 11% on year. The country's largest listed company by revenue aims to expand and upgrade refineries, lay crude and product pipelines and start new projects.
Indian Oil's other two state-run rivals--Hindustan Petroleum Corp. and Bharat Petroleum Corp. --plan to spend 39.24 billion rupees and 30.22 billion rupees, respectively. HPCL's investment will go up by 79% as it aims to complete its projects to supply fuels that meet tighter emission standards.
BPCL's investment will fall by 18% due to lesser outlay on projects to supply clean fuels which are nearing completion.
Gas transmission company GAIL India Ltd. will raise investment by 31% to 55.10 billion rupees as it speeds up work on various pipeline projects, the official said.
NEW DELHI -- India's state-run oil and gas companies plan to raise their total investment by about a fifth in the next financial year to raise crude output, expand refineries and produce cleaner fuels, a senior government official said Friday.
The companies are likely to end the current fiscal year through March with a total investment of 580.95 billion rupees and plan to spend 694.58 billion rupees ($15 billion) next year, the official, who didn't wish to be identified, told Dow Jones Newswires.
Indian energy companies are increasing investment to meet rising demand for fuels in the world's second-fastest growing major economy. India's top policy think tank, the Planning Commission, has forecast the economy to grow at 9% between April 2007 and March 2012.
The federal government aims to raise spending in the sector to assure energy security through higher local output and investment in oil equity abroad. The South Asian nation currently imports more than three-fourths of its crude oil needs.
Oil & Natural Gas Corp., India's largest explorer, is likely to raise capital expenditure next year by about 7% to 265.23 billion rupees as it speeds up drilling at exploratory blocks, including the Cauvery and western offshore basins, the official said.
ONGC--which contributed about three quarters of India's crude oil output and two-thirds of natural gas production in the last fiscal year--hasn't kept up with output targets as its fields are ageing and it hasn't brought any new blocks into production for many years.
The company had planned to invest 208.68 billion rupees this financial year, which is now estimated at 247.20 billion rupees due to an increase in exploratory targets, higher rig charter rates and a rise in offshore drilling wells for marginal fields, the official said.
ONGC's overseas investment arm, ONGC Videsh Ltd., will step up spending by 23% next fiscal year to 86.63 billion rupees on its assets in Nigeria, Russia's Sakhalin, Sudan, Vietnam, Myanmar and Brazil.
OVL produced 8.77 million metric tons oil and oil equivalent gas in the last financial year. It has set a target to produce 20 million metric tons a year of oil and oil equivalent gas by 2020.
Oil India Ltd., the nation's second-largest oil producer, expects to invest 44.65 billion rupees in the next fiscal year, up 88%. It has set aside 20 billion rupees to acquire overseas assets.
Indian Oil Corp. plans to spend INR128.25 billion in the next fiscal year, up 11% on year. The country's largest listed company by revenue aims to expand and upgrade refineries, lay crude and product pipelines and start new projects.
Indian Oil's other two state-run rivals--Hindustan Petroleum Corp. and Bharat Petroleum Corp. --plan to spend 39.24 billion rupees and 30.22 billion rupees, respectively. HPCL's investment will go up by 79% as it aims to complete its projects to supply fuels that meet tighter emission standards.
BPCL's investment will fall by 18% due to lesser outlay on projects to supply clean fuels which are nearing completion.
Gas transmission company GAIL India Ltd. will raise investment by 31% to 55.10 billion rupees as it speeds up work on various pipeline projects, the official said.
India to tackle pollution with energy cuts
Rhys Blakely in Mumbai
India is planning to create a £10 billion-a-year market in energy-saving certificates that officials hope will burnish the country's green credentials and help to avert a looming energy crisis.
Under the plans, due to be implemented in April next year, more than 700 of the country’s most polluting industrial units, such as steel and cement plants, will be given targets for reducing energy consumption.
Those that better their targets will be able to sell energy savings credits to those that fail to make the required cuts.
Ajay Mathur, director-general of the Bureau of Energy Efficiency, the government department leading the project, told The Times he believed that the scheme could save the equivalent of 10 million tonnes of oil a year.
Officials believe that transactions in energy savings certificates could reach £10 billion a year and help to save about 5 per cent of the national energy consumption by 2015.
The move comes as India struggles to provide power to its people, 400 million of whom live in houses that are not connected to the national grid.
Manmohan Singh, the Prime Minister, has pledged "power for all" by 2012, but demand for electricity is likely to increase more than fivefold to 3,870 terawatt hours a year by 2030, according to McKinsey, the consultancy.
In the same period, the number of vehicles on India’s already congested roads is expected to rise sevenfold, to about 380 million vehicles.
If those predictions are realised, India, which relies on its modest coal reserves for the lion’s share of its power and already imports 70 per cent of the oil it uses, would become the third-largest consumer of energy, after the United States and China.
Its share of world energy consumption will nearly double, pitting it against international rivals in a fierce battle for scarce resources.
The energy savings trading scheme is one of several projects designed to tackle the power deficit and cut the emissions blamed for climate change.
There are also plans to distribute 200 million solar powered lamps in the next few years, and to install solar panels on all government buildings by 2012.
Among the more eye-catching experiments is a recent bonus plan for banking executives.
Those whose lending results in villages becoming “fully solar electrified” — by funding small photovoltaic systems capable of powering portable TV sets and street lights — will receive a 100,000 rupee cash prize from the Ministry of New and Renewable Energy, enough to buy a car.
The grandest scheme of all is a $19 billion (£11.67 billion) plan to make India a global leader in solar power.
The plan, which was launched this week, calls for India to generate 200GW of power from solar sources by 2050.
The entire world can generate about 14GW of solar power today.
India will join a growing number of counties exploring energy savings trading schemes.
Several states in the US have instituted similar initiatives, as has New South Wales in Australia.
Italy, Britain and France have also established schemes for energy-saving certificates.
However, only a handful of trades have occurred in the British scheme, which is overseen by Ofgem, the regulator of gas and electricity markets, according to the World Resources Institute, meaning that effective prices have not been set.
India is planning to create a £10 billion-a-year market in energy-saving certificates that officials hope will burnish the country's green credentials and help to avert a looming energy crisis.
Under the plans, due to be implemented in April next year, more than 700 of the country’s most polluting industrial units, such as steel and cement plants, will be given targets for reducing energy consumption.
Those that better their targets will be able to sell energy savings credits to those that fail to make the required cuts.
Ajay Mathur, director-general of the Bureau of Energy Efficiency, the government department leading the project, told The Times he believed that the scheme could save the equivalent of 10 million tonnes of oil a year.
Officials believe that transactions in energy savings certificates could reach £10 billion a year and help to save about 5 per cent of the national energy consumption by 2015.
The move comes as India struggles to provide power to its people, 400 million of whom live in houses that are not connected to the national grid.
Manmohan Singh, the Prime Minister, has pledged "power for all" by 2012, but demand for electricity is likely to increase more than fivefold to 3,870 terawatt hours a year by 2030, according to McKinsey, the consultancy.
In the same period, the number of vehicles on India’s already congested roads is expected to rise sevenfold, to about 380 million vehicles.
If those predictions are realised, India, which relies on its modest coal reserves for the lion’s share of its power and already imports 70 per cent of the oil it uses, would become the third-largest consumer of energy, after the United States and China.
Its share of world energy consumption will nearly double, pitting it against international rivals in a fierce battle for scarce resources.
The energy savings trading scheme is one of several projects designed to tackle the power deficit and cut the emissions blamed for climate change.
There are also plans to distribute 200 million solar powered lamps in the next few years, and to install solar panels on all government buildings by 2012.
Among the more eye-catching experiments is a recent bonus plan for banking executives.
Those whose lending results in villages becoming “fully solar electrified” — by funding small photovoltaic systems capable of powering portable TV sets and street lights — will receive a 100,000 rupee cash prize from the Ministry of New and Renewable Energy, enough to buy a car.
The grandest scheme of all is a $19 billion (£11.67 billion) plan to make India a global leader in solar power.
The plan, which was launched this week, calls for India to generate 200GW of power from solar sources by 2050.
The entire world can generate about 14GW of solar power today.
India will join a growing number of counties exploring energy savings trading schemes.
Several states in the US have instituted similar initiatives, as has New South Wales in Australia.
Italy, Britain and France have also established schemes for energy-saving certificates.
However, only a handful of trades have occurred in the British scheme, which is overseen by Ofgem, the regulator of gas and electricity markets, according to the World Resources Institute, meaning that effective prices have not been set.
Climate Exchange weathers 'perfect storm'
Date: Friday 15 Jan 2010
LONDON (ShareCast) - Neil Eckert, chief executive of Climate Exchange, said the emissions exchange operator had to weather a ‘perfect storm’ of events in 2009 that hit activity in financial markets and pushed the reduction of global emissions further down the political agenda. Nevertheless, the company continued ‘to demonstrate outstanding growth in volumes and open interest’ in its mandatory market products, Eckert claimed, and maintained its dominant market shares of exchange traded volumes. European Climate Exchange (ECX) futures contract volumes in the second half of 2009 were 47% higher than in the second half of 2008, while options contract volumes grew 88%. ECX traded 2,436,072 contracts in the second half of 2009, an increase of 40% over the corresponding period of 2008, while ECX average daily volumes for toalled 18,603 contracts versus 13,311 contracts in the second half of 2008. Chicago Climate Futures Exchange (CCFE) average daily volumes improved to 18,603 contracts from 13,311 in the latter half of 2008 while Chicago Climate Exchange (CCX) trading volumes declined by 31% year on year in the second half.
LONDON (ShareCast) - Neil Eckert, chief executive of Climate Exchange, said the emissions exchange operator had to weather a ‘perfect storm’ of events in 2009 that hit activity in financial markets and pushed the reduction of global emissions further down the political agenda. Nevertheless, the company continued ‘to demonstrate outstanding growth in volumes and open interest’ in its mandatory market products, Eckert claimed, and maintained its dominant market shares of exchange traded volumes. European Climate Exchange (ECX) futures contract volumes in the second half of 2009 were 47% higher than in the second half of 2008, while options contract volumes grew 88%. ECX traded 2,436,072 contracts in the second half of 2009, an increase of 40% over the corresponding period of 2008, while ECX average daily volumes for toalled 18,603 contracts versus 13,311 contracts in the second half of 2008. Chicago Climate Futures Exchange (CCFE) average daily volumes improved to 18,603 contracts from 13,311 in the latter half of 2008 while Chicago Climate Exchange (CCX) trading volumes declined by 31% year on year in the second half.
A123 to Produce Batteries for Fisker
By ALEX P. KELLOGG And MARA LEMOS STEIN
A123 Systems Inc. said it will produce batteries for electric cars made by Fisker Automotive Inc., and will invest up to $23 million in the start-up auto maker as part of the agreement.
A123, based in Watertown, Mass., also said it will expand a battery-assembly plant in Livonia, Mich., with a goal of raising capacity enough to produce 320,000 hybrid-vehicle battery systems and more than 24,000 plug-in hybrid systems a year.
The company expects the plant to create more than 500 jobs.
The partnership between the two companies underscores the critical role the U.S. government has taken in trying to spur the development of electric vehicles.
A123 received $249 million in grant money from the U.S. Department of Energy's Advanced Technology Vehicles Manufacturing Incentive Program, or ATVM. Fisker received a $529 million federal loan from the program in the fall to build plug-in hybrid cars.
Fisker is using some of the money to retool a Delaware auto plant that had been owned by General Motors Co., which was bailed out by the federal government.
"The federal money has been a catalyst," said David Vieau, president and chief executive of A123 Systems.
Fisker is producing a luxury sports car called the Karma, due later this year at about $87,900. It also is working on what it calls a more "affordable" sedan that will cost about $48,000. The vehicles would run on battery power alone and owners could recharge them by plugging into a power source at home.
A123, which held an initial public offering last fall, said $13 million of its investment in Fisker will be in cash.
Last year, A123 formed joint ventures with SAIC Motor Corp., China's largest auto maker by volume, to develop battery systems for hybrid and pure electric vehicles.
The Livonia plant is expected to go online in the second half of this year. The company also said Thursday it would establish operations at a site it leased in Romulus, Mich., last month. That site is expected to start production in the first half of next year.
Write to Alex P. Kellogg at alex.kellogg@wsj.com and Mara Lemos Stein at mara.lemos-stein@dowjones.com
A123 Systems Inc. said it will produce batteries for electric cars made by Fisker Automotive Inc., and will invest up to $23 million in the start-up auto maker as part of the agreement.
A123, based in Watertown, Mass., also said it will expand a battery-assembly plant in Livonia, Mich., with a goal of raising capacity enough to produce 320,000 hybrid-vehicle battery systems and more than 24,000 plug-in hybrid systems a year.
The company expects the plant to create more than 500 jobs.
The partnership between the two companies underscores the critical role the U.S. government has taken in trying to spur the development of electric vehicles.
A123 received $249 million in grant money from the U.S. Department of Energy's Advanced Technology Vehicles Manufacturing Incentive Program, or ATVM. Fisker received a $529 million federal loan from the program in the fall to build plug-in hybrid cars.
Fisker is using some of the money to retool a Delaware auto plant that had been owned by General Motors Co., which was bailed out by the federal government.
"The federal money has been a catalyst," said David Vieau, president and chief executive of A123 Systems.
Fisker is producing a luxury sports car called the Karma, due later this year at about $87,900. It also is working on what it calls a more "affordable" sedan that will cost about $48,000. The vehicles would run on battery power alone and owners could recharge them by plugging into a power source at home.
A123, which held an initial public offering last fall, said $13 million of its investment in Fisker will be in cash.
Last year, A123 formed joint ventures with SAIC Motor Corp., China's largest auto maker by volume, to develop battery systems for hybrid and pure electric vehicles.
The Livonia plant is expected to go online in the second half of this year. The company also said Thursday it would establish operations at a site it leased in Romulus, Mich., last month. That site is expected to start production in the first half of next year.
Write to Alex P. Kellogg at alex.kellogg@wsj.com and Mara Lemos Stein at mara.lemos-stein@dowjones.com
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