The renewables firm is linking with Budapest-based Thermo KFT
John Penman
A Stirling-based renewables company is to double its workforce after tying up an innovative collaboration agreement with a Hungarian-based design team
Renewable Energy Scotland — which designs, supplies and installs heating systems that convert low-level energy stored in the ground, air, and water into heating and hot water — is linking up with Budapest-based Thermo KFT to gain access to its team of designers.
RES, based in Stirling University’s Innovation Park, is close to completing a new round of investment funding. Thermo KFT already works with major European companies including Deutsche Telekom.
“They are one of the best in Europe, where these systems are much more common than in the UK,” said RES managing director Harry Burt.
The move will allow RES to sign larger commercial contracts. The company has so far mainly focused on installing systems for houses, although it is working on a hotel project in the east of Scotland.
Ground, air and water pumps are popular in Europe, especially in Scandinavia, because they can create three times the amount of energy it takes to run the machines and they have very little impact on the environment. They can also cut energy bills dramatically.
Sunday, 17 August 2008
Hungarian deal boosts RES propects
Renewable Energy Sources has signed a deal with Hungarian heat pump designer Thermo Kft, one of Europe’s leading heat pump designers
John Penman
A frozen Norwegian lake was the unlikely setting for Harry Burt’s conversion to renewable energy.
Until then, his career had been spent almost exclusively in the construction sector, working as a senior director with companies such as Miller Group and Bovis.
But on a visit to view a specialist Norwegian house, he was intrigued to discover its heating was generated from under the frozen lake.
“I had actually parked my car on the lake next to a jetty and asked about the heating system and was astonished to be told that it came from under my car,” recalled Burt.
Ground, air and water-source heat pumps convert low-level energy stored in the ground, water and air to provide heating, cooling and hot water for homes and commercial properties. The principle is similar to how fridges operate. They are relatively common in Europe but not the UK.
Heat pumps dominate the Swedish market due to the colder climate and need for reliable cost-effective heating. Two out of three consumers there choose heat pumps when changing heating systems.
Burt knew of the principle behind heat pumps but was surprised they could operate at such low temperatures. In fact, it is possible for air-source heat pumps to extract useful heat from the air at temperatures as low as minus 15°C.
For every unit of electricity used to power the pump, 3-4 units of heat are produced, making it a hugely efficient way of heating a building.
“We were used to low energy bills in the UK until very recently so there’s been no incentive to use much more efficient systems, but the story in Scandinavia is totally different,” he said.
“They have been doing this sort of thing for years and the result is that heat-recovery systems are an integral part of their residential and commercial buildings.”
Now, driven by rapidly increasing energy costs and government legislation which will require residential and commercial property sellers to include energy ratings, interest in heat-recovery technology in the UK is on the rise. In his office at Stirling University’s Innovation Park, Burt is ready to play a major part in exploiting that interest.
Although he saw the gap in the market, Burt admits he did not predict that by the time his firm Renewable Energy (Scotland) was up and running, the cost of energy would be so high and dominating the newspaper front pages.
“It helps focus people’s minds on the cost of heating their homes and offices and there seems little prospect of prices coming sharply down,” he said.
Now, just a year after starting RES — which employs seven people — he is on the verge of finalising a round of funding designed to propel the company to its next stage. Staff numbers will double by the end of this year.
Its backers have been mainly high net worth individuals. But although it remains relatively small, a target of £4m turnover by 2010 has brought it onto the radar of Scottish Enterprise’s Fast Track Growth programme.
RES has signed a deal with Hungarian heat-pump designer Thermo Kft, giving it instant access to Kft’s designers. Kft is one of Europe’s leading heat-pump designers.
RES aims to train and develop installers and engineers, which will allow it to significantly boost the number of systems it instals and maintains and to target commercial contracts for the first time. It is now installing a system for a hotel in the east of Scotland.
“These commercial deals can be worth up to £500,000 a contract so you can see the potential for growth,” he said.
To find how big that potential is, Burt has commissioned Stirling University to study the size of the market. The results will stay private to give him a commercial edge, but his confidence suggests he believes it will back his judgment.
That judgment has been backed by others. The Energy Savings Trust’s recent report into growth potential for micro generation, which includes solar, biomass and windpower as well as heat pumps, suggested there was potential for 500,000 units by 2015 and 2-3 million by 2030. Heat-pump systems are part of that mix.
“I am loath to talk about the size of the potential market. It could be huge and there are many options for micro generation but I think that none has the advantage of heat pumps, which can create three times the energy it costs to run them,” said Burt.
The systems are not cheap. A typical air-based system for a big house costs around £9,000, but grants can cut costs by a third. Payback, through sharply reduced bills, is possible in a few years. Burt recognises that even then, the figure is steep.
“When you are talking about a retro-fit, it is expensive. But in most cases it may be that someone is replacing a boiler at the same time, so that would cost a couple of thousand pounds in itself,” said Burt.
“But it has to be considered in the context of continually high energy prices and the need to reduce our carbon footprint. Commercial properties will have to consider their energy ratings from next year. The collaboration with Thermo Kft gives us the clout to bid for major commercial contracts,” he said.
All the major housebuilders are looking at ways of building more energy-efficient homes but the market now is tough. Burt hopes that by the time it comes back, he can persuade them RES should play a part.
But RES is just one player in a field that is rapidly becoming attractive to others. All the major central heating boiler manufacturers are investing in research for the design of heat pumps. Burt believes the Hungarian deal, government legislation and rising gas bills give RES the edge on rivals.
“The timing is in our favour,” he said. “In six months, this will be a totally different company and then in another six months, totally different again.”
John Penman
A frozen Norwegian lake was the unlikely setting for Harry Burt’s conversion to renewable energy.
Until then, his career had been spent almost exclusively in the construction sector, working as a senior director with companies such as Miller Group and Bovis.
But on a visit to view a specialist Norwegian house, he was intrigued to discover its heating was generated from under the frozen lake.
“I had actually parked my car on the lake next to a jetty and asked about the heating system and was astonished to be told that it came from under my car,” recalled Burt.
Ground, air and water-source heat pumps convert low-level energy stored in the ground, water and air to provide heating, cooling and hot water for homes and commercial properties. The principle is similar to how fridges operate. They are relatively common in Europe but not the UK.
Heat pumps dominate the Swedish market due to the colder climate and need for reliable cost-effective heating. Two out of three consumers there choose heat pumps when changing heating systems.
Burt knew of the principle behind heat pumps but was surprised they could operate at such low temperatures. In fact, it is possible for air-source heat pumps to extract useful heat from the air at temperatures as low as minus 15°C.
For every unit of electricity used to power the pump, 3-4 units of heat are produced, making it a hugely efficient way of heating a building.
“We were used to low energy bills in the UK until very recently so there’s been no incentive to use much more efficient systems, but the story in Scandinavia is totally different,” he said.
“They have been doing this sort of thing for years and the result is that heat-recovery systems are an integral part of their residential and commercial buildings.”
Now, driven by rapidly increasing energy costs and government legislation which will require residential and commercial property sellers to include energy ratings, interest in heat-recovery technology in the UK is on the rise. In his office at Stirling University’s Innovation Park, Burt is ready to play a major part in exploiting that interest.
Although he saw the gap in the market, Burt admits he did not predict that by the time his firm Renewable Energy (Scotland) was up and running, the cost of energy would be so high and dominating the newspaper front pages.
“It helps focus people’s minds on the cost of heating their homes and offices and there seems little prospect of prices coming sharply down,” he said.
Now, just a year after starting RES — which employs seven people — he is on the verge of finalising a round of funding designed to propel the company to its next stage. Staff numbers will double by the end of this year.
Its backers have been mainly high net worth individuals. But although it remains relatively small, a target of £4m turnover by 2010 has brought it onto the radar of Scottish Enterprise’s Fast Track Growth programme.
RES has signed a deal with Hungarian heat-pump designer Thermo Kft, giving it instant access to Kft’s designers. Kft is one of Europe’s leading heat-pump designers.
RES aims to train and develop installers and engineers, which will allow it to significantly boost the number of systems it instals and maintains and to target commercial contracts for the first time. It is now installing a system for a hotel in the east of Scotland.
“These commercial deals can be worth up to £500,000 a contract so you can see the potential for growth,” he said.
To find how big that potential is, Burt has commissioned Stirling University to study the size of the market. The results will stay private to give him a commercial edge, but his confidence suggests he believes it will back his judgment.
That judgment has been backed by others. The Energy Savings Trust’s recent report into growth potential for micro generation, which includes solar, biomass and windpower as well as heat pumps, suggested there was potential for 500,000 units by 2015 and 2-3 million by 2030. Heat-pump systems are part of that mix.
“I am loath to talk about the size of the potential market. It could be huge and there are many options for micro generation but I think that none has the advantage of heat pumps, which can create three times the energy it costs to run them,” said Burt.
The systems are not cheap. A typical air-based system for a big house costs around £9,000, but grants can cut costs by a third. Payback, through sharply reduced bills, is possible in a few years. Burt recognises that even then, the figure is steep.
“When you are talking about a retro-fit, it is expensive. But in most cases it may be that someone is replacing a boiler at the same time, so that would cost a couple of thousand pounds in itself,” said Burt.
“But it has to be considered in the context of continually high energy prices and the need to reduce our carbon footprint. Commercial properties will have to consider their energy ratings from next year. The collaboration with Thermo Kft gives us the clout to bid for major commercial contracts,” he said.
All the major housebuilders are looking at ways of building more energy-efficient homes but the market now is tough. Burt hopes that by the time it comes back, he can persuade them RES should play a part.
But RES is just one player in a field that is rapidly becoming attractive to others. All the major central heating boiler manufacturers are investing in research for the design of heat pumps. Burt believes the Hungarian deal, government legislation and rising gas bills give RES the edge on rivals.
“The timing is in our favour,” he said. “In six months, this will be a totally different company and then in another six months, totally different again.”
British Energy stalemate puts new nuclear reactors at risk
Tim Webb
The Observer,
Sunday August 17 2008
The on-off £12bn takeover saga of British Energy risks delaying plans to build new nuclear reactors on government-owned sites, it has emerged.
The Nuclear Decommissioning Authority (NDA), the government-backed body, is waiting to launch a formal auction of land surrounding its sites.
It had planned to invite energy groups to table bids at the beginning of the month when nuclear generator British Energy looked certain to accept a takeover by French group EDF. But the £12bn deal fell through at the eleventh hour. Low-level talks between the companies are continuing but it is not clear when, or if, the takeover can be resurrected, plunging the government's plans for nuclear new build into chaos.
The NDA must hold off until the ownership of the nuclear generator is resolved, because this would affect who would bid for its own sites.
British Energy's land is the most suitable for a new fleet of reactors, partly because it has better grid connections, but the NDA locations - which include Sellafield in Cumbria - are also likely to play a part.
The NDA invited general expressions of interest for its sites last April. As well as EDF, German groups Eon and RWE are among those interested.
The Observer,
Sunday August 17 2008
The on-off £12bn takeover saga of British Energy risks delaying plans to build new nuclear reactors on government-owned sites, it has emerged.
The Nuclear Decommissioning Authority (NDA), the government-backed body, is waiting to launch a formal auction of land surrounding its sites.
It had planned to invite energy groups to table bids at the beginning of the month when nuclear generator British Energy looked certain to accept a takeover by French group EDF. But the £12bn deal fell through at the eleventh hour. Low-level talks between the companies are continuing but it is not clear when, or if, the takeover can be resurrected, plunging the government's plans for nuclear new build into chaos.
The NDA must hold off until the ownership of the nuclear generator is resolved, because this would affect who would bid for its own sites.
British Energy's land is the most suitable for a new fleet of reactors, partly because it has better grid connections, but the NDA locations - which include Sellafield in Cumbria - are also likely to play a part.
The NDA invited general expressions of interest for its sites last April. As well as EDF, German groups Eon and RWE are among those interested.
Wave power all at sea until tide turns
Richard Wilson
Extract all the wave power you can from the Atlantic coast of Scotland and it would add up to the equivalent of about four nuclear power stations, says David MacKay, professor of natural philosophy in the physics department at Cambridge University. “It’s a very large amount. A ballpark estimate of what is required to get Scotland off fossil fuels is either 10 nuclear reactors, or 10,000 wind turbines.”
In terms of raw power, MacKay estimates that waves approaching Scotland’s coastline represent 30 gigawatts (GW). The tides beneath the surface have even more power — 60GW says MacKay. He calculates that 12.5GW of electrical power could be extracted from tide and wave — almost half of Scotland’s total energy consumption of 26GW.
With the UK government setting a target of 15% for clean energy by 2020 — and the Scottish Nationalist government an ambitious 50% target — the sea can no longer be considered as too challenging in which to work.
So why are we not forging ahead with this technology? The world’s first commercial wave farm has been developed and built by an Edinburgh firm, Pelamis Wave Power. Three of their football-pitch-sized turbines are bobbing about in the Atlantic — but off Portugal, not Scotland.
The government in Lisbon offers enough subsidy to make it commercially viable. The UK government — energy matters are reserved to London — is less encouraging, according to leading scientists.
This is despite the fact that the European Marine Energy Centre, a testing site for wave and tidal power, is based in Orkney. Its presence here, along with the work of our universities, makes Scotland a world leader in research into this vital alternative power source. But we need government help to transform our scientific and technical expertise into a commercial industry.
The UK government set up the Marine Renewables Deployment Fund, with a budget of £42m, to help firms develop projects, but no scheme has yet qualified for a grant. The Scottish government has been more supportive, with all of its £13.5m funding allocated.
Jim Mather, the energy minister, has described marine power as “the heart of our ambitions to develop a vibrant renewables sector”. John Griffiths, a non-executive director of the Orkney centre, is clear where blame lies. “In 1999 everybody was saying that come 2005 we should be moving towards a range of commercial tidal and wave devices. That time has gone and among the things that have held up progress has been a huge emphasis on wind. Some of the inertia has been evident from Westminster compared to the Scottish government. There is a dearth of funding in wave and tidal power.”
Turbines at sea are less controversial than windmills, whose presence has upset many communities. Islanders on Lewis who successfully opposed a giant windfarm have backed a recent application for a wave power station operated by Wavegen, an Inverness-based technology company, and Npower Renewables.
Orkney is to test a number of projects, such as Ocean Power Technology’s PowerBuoy system. Another, OpenHydro’s tidal turbine, was connected to the national grid last May, generating electricity to power up to 100 homes. But progress is slow when financial support is muted.
“The sea is a harsh environment,” says Peter Fraenkel, technical director of Marine Current Turbines, which installed a device in Northern Ireland’s Strangford Lough. Looking like an upside down windmill, the structure has the potential to generate electricity to power 1,140 homes. “The sheer force of fast moving water is horrendous,” says Fraenkel. “It takes modern engineering capabilities to come up with solutions. Marine power subsidies are not as generous as they should be.”
Some say Britain is making the same mistakes as in the early years of wind power. “We don’t have a wind industry because in the early days of wind turbine development it wasn’t taken seriously by government,” says Fraenkel. We did not invest in the technology, allowing Danish and German firms to develop it. Now they are making money across the globe.
Tide and wave power will need government help to become commercially viable. Otherwise they too could be developed abroad, and we will miss the chance of a lucrative industry offering highly skilled engineering and manufacturing jobs.
A man particularly aware of Britain’s neglect of renewables is Professor Stephen Salter, generally regarded as the pioneer of wave power. He invented a device in the 1970s called Salter’s Edinburgh Duck, which could extract 90% of energy from waves. But the UK government withdrew funding from wave power in 1982, many believe because of the influence of the nuclear industry.
“We’ve got a good resource and there was a lot of good engineering in the early days,” says Salter, professor of engineering design at Edinburgh University. “We can make ships, so we should be able to make these.”
Salter wrote an energy review document for the SNP two years ago that suggested previous calculations of the energy potential of the Pentland Firth, the deep body of water that separates the Orkney Islands from Caithness and is renowned for the strength of its tides, were underestimated.
He believes that if turbines can be designed to work on the bottom of the sea bed, 70m down, and be placed close together, up to 20GW of energy could be extracted from the firth.
Yet having spent 35 years in the field, he, too, is dismayed by the lack of drive from Westminster. “Marine power should be getting a different flavour of subsidies because the wind people are now building in such quantity they are getting their price reduction,” he says. “If we just go on the way we are, nobody will do anything except wind. I think there are still people around who don’t want it to work and who want to go to nuclear.”
Britain boasts almost half of Europe’s tidal stream sites — where the underwater currents can be used to drive turbines — and 47% of Eu-rope’s wave resource. Des Browne, secretary of state for Scotland, is robust in his defence of the UK government’s input, arguing that Britain has the “most comprehensive package of support measures for marine energy anywhere in the world.” He says Westminster is determined to commercialise the technology and has committed more than £100m since 2000. This includes the renewables fund that has still to allocate grants to marine projects and the new Energy Technologies Institute, based at Loughborough University.
“Wave and tidal power . . . could be key for sustainable UK electricity generation in the long term, and provide huge commercial opportunities. We want to lead the way, and that’s why we are undertaking a feasibility study on whether to support a barrage or another project to exploit the tidal power of the Severn estuary,” he said.
Griffiths is less convinced. “The government put into research and development for nuclear something like half a billion a year, for about 17 years,” he says. “If they had put 10% of that [into wave and tidal power] every year since 1999, the marine power situation would look different.”
Extract all the wave power you can from the Atlantic coast of Scotland and it would add up to the equivalent of about four nuclear power stations, says David MacKay, professor of natural philosophy in the physics department at Cambridge University. “It’s a very large amount. A ballpark estimate of what is required to get Scotland off fossil fuels is either 10 nuclear reactors, or 10,000 wind turbines.”
In terms of raw power, MacKay estimates that waves approaching Scotland’s coastline represent 30 gigawatts (GW). The tides beneath the surface have even more power — 60GW says MacKay. He calculates that 12.5GW of electrical power could be extracted from tide and wave — almost half of Scotland’s total energy consumption of 26GW.
With the UK government setting a target of 15% for clean energy by 2020 — and the Scottish Nationalist government an ambitious 50% target — the sea can no longer be considered as too challenging in which to work.
So why are we not forging ahead with this technology? The world’s first commercial wave farm has been developed and built by an Edinburgh firm, Pelamis Wave Power. Three of their football-pitch-sized turbines are bobbing about in the Atlantic — but off Portugal, not Scotland.
The government in Lisbon offers enough subsidy to make it commercially viable. The UK government — energy matters are reserved to London — is less encouraging, according to leading scientists.
This is despite the fact that the European Marine Energy Centre, a testing site for wave and tidal power, is based in Orkney. Its presence here, along with the work of our universities, makes Scotland a world leader in research into this vital alternative power source. But we need government help to transform our scientific and technical expertise into a commercial industry.
The UK government set up the Marine Renewables Deployment Fund, with a budget of £42m, to help firms develop projects, but no scheme has yet qualified for a grant. The Scottish government has been more supportive, with all of its £13.5m funding allocated.
Jim Mather, the energy minister, has described marine power as “the heart of our ambitions to develop a vibrant renewables sector”. John Griffiths, a non-executive director of the Orkney centre, is clear where blame lies. “In 1999 everybody was saying that come 2005 we should be moving towards a range of commercial tidal and wave devices. That time has gone and among the things that have held up progress has been a huge emphasis on wind. Some of the inertia has been evident from Westminster compared to the Scottish government. There is a dearth of funding in wave and tidal power.”
Turbines at sea are less controversial than windmills, whose presence has upset many communities. Islanders on Lewis who successfully opposed a giant windfarm have backed a recent application for a wave power station operated by Wavegen, an Inverness-based technology company, and Npower Renewables.
Orkney is to test a number of projects, such as Ocean Power Technology’s PowerBuoy system. Another, OpenHydro’s tidal turbine, was connected to the national grid last May, generating electricity to power up to 100 homes. But progress is slow when financial support is muted.
“The sea is a harsh environment,” says Peter Fraenkel, technical director of Marine Current Turbines, which installed a device in Northern Ireland’s Strangford Lough. Looking like an upside down windmill, the structure has the potential to generate electricity to power 1,140 homes. “The sheer force of fast moving water is horrendous,” says Fraenkel. “It takes modern engineering capabilities to come up with solutions. Marine power subsidies are not as generous as they should be.”
Some say Britain is making the same mistakes as in the early years of wind power. “We don’t have a wind industry because in the early days of wind turbine development it wasn’t taken seriously by government,” says Fraenkel. We did not invest in the technology, allowing Danish and German firms to develop it. Now they are making money across the globe.
Tide and wave power will need government help to become commercially viable. Otherwise they too could be developed abroad, and we will miss the chance of a lucrative industry offering highly skilled engineering and manufacturing jobs.
A man particularly aware of Britain’s neglect of renewables is Professor Stephen Salter, generally regarded as the pioneer of wave power. He invented a device in the 1970s called Salter’s Edinburgh Duck, which could extract 90% of energy from waves. But the UK government withdrew funding from wave power in 1982, many believe because of the influence of the nuclear industry.
“We’ve got a good resource and there was a lot of good engineering in the early days,” says Salter, professor of engineering design at Edinburgh University. “We can make ships, so we should be able to make these.”
Salter wrote an energy review document for the SNP two years ago that suggested previous calculations of the energy potential of the Pentland Firth, the deep body of water that separates the Orkney Islands from Caithness and is renowned for the strength of its tides, were underestimated.
He believes that if turbines can be designed to work on the bottom of the sea bed, 70m down, and be placed close together, up to 20GW of energy could be extracted from the firth.
Yet having spent 35 years in the field, he, too, is dismayed by the lack of drive from Westminster. “Marine power should be getting a different flavour of subsidies because the wind people are now building in such quantity they are getting their price reduction,” he says. “If we just go on the way we are, nobody will do anything except wind. I think there are still people around who don’t want it to work and who want to go to nuclear.”
Britain boasts almost half of Europe’s tidal stream sites — where the underwater currents can be used to drive turbines — and 47% of Eu-rope’s wave resource. Des Browne, secretary of state for Scotland, is robust in his defence of the UK government’s input, arguing that Britain has the “most comprehensive package of support measures for marine energy anywhere in the world.” He says Westminster is determined to commercialise the technology and has committed more than £100m since 2000. This includes the renewables fund that has still to allocate grants to marine projects and the new Energy Technologies Institute, based at Loughborough University.
“Wave and tidal power . . . could be key for sustainable UK electricity generation in the long term, and provide huge commercial opportunities. We want to lead the way, and that’s why we are undertaking a feasibility study on whether to support a barrage or another project to exploit the tidal power of the Severn estuary,” he said.
Griffiths is less convinced. “The government put into research and development for nuclear something like half a billion a year, for about 17 years,” he says. “If they had put 10% of that [into wave and tidal power] every year since 1999, the marine power situation would look different.”
Christofferson Robb hedge fund to sell Thanet windfarm in Kent
Danny Fortson
THE Christofferson Robb hedge fund is in talks to sell one of Britain’s largest proposed offshore wind farms less than a year after it bought the project.
Utilities and financial buyers have bid for the £800m Thanet wind farm, off the coast of Margate in Kent, after its owner began negotiations with potential partners about the building and financing of the project. The 300MW site is expected to begin operation next year and will provide power for up to 240,000 homes, increasing the UK’s total offshore wind power capacity by 30%.
“We need a lot of debt and equity to finance this and in the course of those discussions parties have said they would like to buy it all,” said Mark Petterson of Warwick Energy, the site developer. Christofferson Robb declined to comment.
The developers have increased the value of the project in the past year, gaining planning consent, debt commitments and a connection slot to the national grid. The hedge fund paid £47m for the site last year but is expected to pocket as much as £80m if it sells.
Due to the soaring price of building offshore wind farms, construction is expected to cost up to £800m, a level beyond the means or expertise of either Warwick or Christofferson Robb. “These assets get traded preconstruction because developers just don’t have the means necessary to actually build them,” said Mortimer Menzel, a partner at Augusta & Co. “Whoever buys it is basically buying the right to build it.”
The talks come at a busy time for the industry. The Crown Estate is preparing for the auction of 11 offshore wind-farm sites.
Expressions of interest are due by the end of this month.
THE Christofferson Robb hedge fund is in talks to sell one of Britain’s largest proposed offshore wind farms less than a year after it bought the project.
Utilities and financial buyers have bid for the £800m Thanet wind farm, off the coast of Margate in Kent, after its owner began negotiations with potential partners about the building and financing of the project. The 300MW site is expected to begin operation next year and will provide power for up to 240,000 homes, increasing the UK’s total offshore wind power capacity by 30%.
“We need a lot of debt and equity to finance this and in the course of those discussions parties have said they would like to buy it all,” said Mark Petterson of Warwick Energy, the site developer. Christofferson Robb declined to comment.
The developers have increased the value of the project in the past year, gaining planning consent, debt commitments and a connection slot to the national grid. The hedge fund paid £47m for the site last year but is expected to pocket as much as £80m if it sells.
Due to the soaring price of building offshore wind farms, construction is expected to cost up to £800m, a level beyond the means or expertise of either Warwick or Christofferson Robb. “These assets get traded preconstruction because developers just don’t have the means necessary to actually build them,” said Mortimer Menzel, a partner at Augusta & Co. “Whoever buys it is basically buying the right to build it.”
The talks come at a busy time for the industry. The Crown Estate is preparing for the auction of 11 offshore wind-farm sites.
Expressions of interest are due by the end of this month.
Saturday, 16 August 2008
Save the planet? Buy it
Last Updated: 12:01am BST 16/08/2008
Millionaires are purchasing entire ecosystems around the world and turning them into conservation areas. Their goal? To stop environmental catastrophe. Jonathan Franklin reports with pictures by Morten Andersen Sebastián Piñera, one of the richest men in Chile, has a CV that includes introducing credit cards to his country and many large-scale property developments. Now he has added what every chic millionaire needs - his own private ecosystem.
Parque Tantauco, which Piñera created in 2005, is on one of South America's largest islands, Chiloé, off the coast of Patagonia.
Sebastián Piñera and construction work in Parque Tantauco
Piñera bought the land and immediately set about protecting the offshore habitat of blue whales and the inland virgin forests.Pulling out a map of the park, Piñera explains his plan, tracing his finger over a trekking route that will be connected by rustic cabins.'We have been buying all the land around us. We started with 110,000 acres and now we have 150,000,' he says. 'I want my children and grandchildren to remember me for making one more million? No! So I now have many projects like this.'
While yachts and jets marked the status of last century's super rich, today the stylish accessory for millionaires is their very own ecosystem.
From Patagonia to Montana, hundreds of thousands of acres are being bought by wealthy businessmen and placed in private charities, conservation trusts or handed over to governments as a gift.
Johan Eliasch, chairman of Head, the ski and sporting goods manufacturer, and the grandson of a Swedish property developer, has taken his business skills and invested them in a new industry - Amazon Forest conservation.
Eliasch, who has a personal fortune estimated at £360m, has bought 400,000 acres in the Brazilian Amazon, near the river town of Manicore.
Deforestation, argues Eliasch, causes more carbon emissions annually than transportation, yet is often overlooked.
In his parcel of land, Eliasch estimates that some 80m tons of carbon are trapped in the forest - about the same amount the entire Swedish population will produce over the next 15 years at current rates (53m tons per year).
'The key to saving the Amazon and the rest of the world's great rainforests is actually very simple: just put a fair price on the role they play in providing a quarter of the world's oxygen, a fifth of fresh water and 60 per cent of its species,' declares Eliasch.
'I truly believe that with their values as a carbon store at last being recognised, we will see mass deforestation halted in five years.'
Eliasch's interest in the Amazon came about from a concern that one of the effects of global warming was its destruction of the European ski season due to the lack of a critical component - snow.
'The Swedish winters and summers hold the most enduring memories for me. Now when I am back in Stockholm in November, it is difficult to imagine being able to ski to school. I think that is a tragedy,' he remarked.
The efforts by Eliasch to protect the rainforest have hit a nerve among some people in Brazil who are suspicious of foreigners coming in with plans to invest in the Amazon.
Eliasch, who admits that shutting down sawmills and putting hundreds of workers out of a job is controversial, insists that hacking down the rainforest is a wildly inefficient use of natural resources.
'Once timber is cut, there is little that can be done with the land that is is sustainable,' argues Eliasch. 'Timber extraction provides big profits at the expense of local communities.'
'Providing communities with unfettered access to harvest a forest that is protected in perpetuity provides better and more reliable incomes.'
Still, some people remain unconvinced, and it might be years before Eliasch is able to fully utilise his business acumen within the complex world of conservation.
advertisement
'There are pitfalls everywhere,' says Evan Bowen-Jones of the conservation body Fauna & Flora International. 'In some countries it is possible to buy large chunks of lands and preserve it, and in other areas it is impossible.'
Bowen-Jones cautions that entering the world of large-scale conservation requires patience, and he strongly suggests consulting experienced individuals who have already been through the process.
Working with local groups or, better yet, being invited by local environmental groups is another key to success, he says.
'With the current pace of biodiversity loss posed by climate change, we are going to have to stretch the methods available to us and that is going to bring in the wealthy individuals,' says Bowen-Jones.
'If they [wealthy donors] bring the right attitude to the table, then there is a good chance for success.'
Douglas Tompkins and his Parque Pumalin, in Chile
'It is pretty hard for a country to turn down a gift of 300,000 hectares [740,000 acres],' says Douglas Tompkins, 65, the American-born founder of Esprit and The North Face.
From the late 1960s to the early 1980s, Tompkins amassed a multi-million dollar fortune. He lived in a huge estate in San Francisco's Pacific Heights neighbourhood and had a world-renowned art collection.
Then he read a book on deep ecology, the philosophy pioneered by Norwegian Arne Naess, who calls for a radical re-evaluation of man's relationship with the planet.
Tompkins was an instant convert. He sold his estate, the art and everything else, then moved to the remote wilds of Patagonia.
Since 1992, Tompkins has spent nearly £110m buying or organising the purchase of around 25 properties covering 2.2m acres in Chile and Argentina.
Once purchased, the land is placed under strict environmental protection by its new owner. Tompkins has even coined a phrase for this movement - wildlands philanthropy.
When Tompkins met someone with the same philosophy and her own pile of money - Kristi McDivitt, the former CEO of the Patagonia Clothing company - they began to focus their business acumen on building coalitions of funders, environmentalists and governments to create national parks.
'Spend your money on land conservation,' says McDivitt. 'To restore a creek is patriotic in my mind. Restoring the land in any form is a patriotic act.'
This eco-power couple have now created two national parks - Parque Nacional Corcovado in Chile and Parque Nacional Monte León in Argentina.
Another two are being finalised, with a total area of close to two million acres. At the centre of Tompkins' conservation efforts is Chile's Parque Pumalin, a pristine wooded ecosystem that includes volcanoes, old growth forests and hidden hot springs. The park's 740,000 acres are off limits to all development except small-scale enterprises.
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'I fundamentally believe in national parks,' Tompkins said. 'I don't believe in private parks. I believe that nations do best and have done best when they really value their parklands and areas that are off limits to development.'
Hansjörg Wyss, one of Europe's richest men, agrees. After amassing a fortune estimated at £4,200m from his position of CEO of Synthes - a company that produces artificial spinal discs and nails for repairing broken bones - Wyss has tackled a far larger reconstruction project: the wild areas of the American West.
Through The Wyss Foundation, he has donated millions of dollars to preserve wild lands in Utah and Montana.
As chairman of the board at the Southern Utah Wilderness Alliance, a grassroots conservation group in the American southwest, Wyss has instituted a corporate structure that includes a £3.5m cash surplus, investments in stocks and mutual funds and an £800,000 office building in Salt Lake City.
In order to save thousands of acres in the Rocky Mountains of Montana from development, Wyss bankrolled a simple solution; he offered to buy up the mineral rights from the mining companies.
Thanks to Wyss's understanding of corporate America, the Foundation had discovered a strategy for effectively paying the oil and gas companies to leave the area.
In that Montana battle, The Wyss Foundation was an early funder and longtime proponent of the 'buy 'em out' strategy.
The Goldman Sachs ecosystem in Tierra del Fuego
Even investment bankers Goldman Sachs have caught the bug. In 2003, Goldman Sachs received 670,000 acres of forests in southern Chile and Argentina as the result of a bankruptcy settlement.
'It was part of a large package of distressed debt. We started asking, what do we do with a million acres of forest at the end of the earth? We had to get out an atlas,' laughs Lawrence Linden, an advisory director to Goldman Sachs.
He continues: 'As an investment bank, we know what to do with shopping malls and apartment complexes. But an ecosystem in Tierra del Fuego? So we called in The Nature Conservancy to study the land and they came back with the conclusion that it was actually a very valuable piece of land from an environmental point of view.'
Today the Goldman Sachs land is a vast tract of wilderness and is home to the guanaco, a llama-like animal that roams the forests. It also has an endowment of around £9m.
"We didn't want to be a burden for taxpayers. This is not just a question of preserving a pristine wilderness,' says Pete Rose, a Goldman Sachs spokesman. 'This is about using 21st-century science to preserve a pristine wilderness.'
Across Europe, eco-barons have also invested heavily in land conservation.
Dutch businessman Paul Fentener van Vlissingen, who died in 2006, was a leading figure in the movement. From his 82,000-acre estate in Scotland - which he proudly advertised as public lands - van Vlissingen managed supermarket chains, energy companies and investment trusts. His passion was Africa's beleaguered national parks.
In barely two years, Vlissingen poured millions of dollars into the then incomplete Marakele National Park in South Africa, a job that would have taken at least 10 years without his funding. Today Marakele is part of a far bigger park system and is a healthy home to African wildlife, including elephant, white and black rhinoceros, buffalo, hyena, cheetah, wild dog, giraffe and eland.
To consolidate his philosophy, Vlissingen helped create the African Parks Foundation, an NGO that continues to reinforce the infrastructure and funding for national parks in Africa.
Before his death, van Vlissingen was widely considered the richest man in Scotland, and with tens of thousands of acres, the country's biggest landowner.
But van Vlissingen refused that title, 'You can't own a place like this. It belongs to the planet,' he once said. 'I'm only the guardian.'
Millionaires are purchasing entire ecosystems around the world and turning them into conservation areas. Their goal? To stop environmental catastrophe. Jonathan Franklin reports with pictures by Morten Andersen Sebastián Piñera, one of the richest men in Chile, has a CV that includes introducing credit cards to his country and many large-scale property developments. Now he has added what every chic millionaire needs - his own private ecosystem.
Parque Tantauco, which Piñera created in 2005, is on one of South America's largest islands, Chiloé, off the coast of Patagonia.
Sebastián Piñera and construction work in Parque Tantauco
Piñera bought the land and immediately set about protecting the offshore habitat of blue whales and the inland virgin forests.Pulling out a map of the park, Piñera explains his plan, tracing his finger over a trekking route that will be connected by rustic cabins.'We have been buying all the land around us. We started with 110,000 acres and now we have 150,000,' he says. 'I want my children and grandchildren to remember me for making one more million? No! So I now have many projects like this.'
While yachts and jets marked the status of last century's super rich, today the stylish accessory for millionaires is their very own ecosystem.
From Patagonia to Montana, hundreds of thousands of acres are being bought by wealthy businessmen and placed in private charities, conservation trusts or handed over to governments as a gift.
Johan Eliasch, chairman of Head, the ski and sporting goods manufacturer, and the grandson of a Swedish property developer, has taken his business skills and invested them in a new industry - Amazon Forest conservation.
Eliasch, who has a personal fortune estimated at £360m, has bought 400,000 acres in the Brazilian Amazon, near the river town of Manicore.
Deforestation, argues Eliasch, causes more carbon emissions annually than transportation, yet is often overlooked.
In his parcel of land, Eliasch estimates that some 80m tons of carbon are trapped in the forest - about the same amount the entire Swedish population will produce over the next 15 years at current rates (53m tons per year).
'The key to saving the Amazon and the rest of the world's great rainforests is actually very simple: just put a fair price on the role they play in providing a quarter of the world's oxygen, a fifth of fresh water and 60 per cent of its species,' declares Eliasch.
'I truly believe that with their values as a carbon store at last being recognised, we will see mass deforestation halted in five years.'
Eliasch's interest in the Amazon came about from a concern that one of the effects of global warming was its destruction of the European ski season due to the lack of a critical component - snow.
'The Swedish winters and summers hold the most enduring memories for me. Now when I am back in Stockholm in November, it is difficult to imagine being able to ski to school. I think that is a tragedy,' he remarked.
The efforts by Eliasch to protect the rainforest have hit a nerve among some people in Brazil who are suspicious of foreigners coming in with plans to invest in the Amazon.
Eliasch, who admits that shutting down sawmills and putting hundreds of workers out of a job is controversial, insists that hacking down the rainforest is a wildly inefficient use of natural resources.
'Once timber is cut, there is little that can be done with the land that is is sustainable,' argues Eliasch. 'Timber extraction provides big profits at the expense of local communities.'
'Providing communities with unfettered access to harvest a forest that is protected in perpetuity provides better and more reliable incomes.'
Still, some people remain unconvinced, and it might be years before Eliasch is able to fully utilise his business acumen within the complex world of conservation.
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'There are pitfalls everywhere,' says Evan Bowen-Jones of the conservation body Fauna & Flora International. 'In some countries it is possible to buy large chunks of lands and preserve it, and in other areas it is impossible.'
Bowen-Jones cautions that entering the world of large-scale conservation requires patience, and he strongly suggests consulting experienced individuals who have already been through the process.
Working with local groups or, better yet, being invited by local environmental groups is another key to success, he says.
'With the current pace of biodiversity loss posed by climate change, we are going to have to stretch the methods available to us and that is going to bring in the wealthy individuals,' says Bowen-Jones.
'If they [wealthy donors] bring the right attitude to the table, then there is a good chance for success.'
Douglas Tompkins and his Parque Pumalin, in Chile
'It is pretty hard for a country to turn down a gift of 300,000 hectares [740,000 acres],' says Douglas Tompkins, 65, the American-born founder of Esprit and The North Face.
From the late 1960s to the early 1980s, Tompkins amassed a multi-million dollar fortune. He lived in a huge estate in San Francisco's Pacific Heights neighbourhood and had a world-renowned art collection.
Then he read a book on deep ecology, the philosophy pioneered by Norwegian Arne Naess, who calls for a radical re-evaluation of man's relationship with the planet.
Tompkins was an instant convert. He sold his estate, the art and everything else, then moved to the remote wilds of Patagonia.
Since 1992, Tompkins has spent nearly £110m buying or organising the purchase of around 25 properties covering 2.2m acres in Chile and Argentina.
Once purchased, the land is placed under strict environmental protection by its new owner. Tompkins has even coined a phrase for this movement - wildlands philanthropy.
When Tompkins met someone with the same philosophy and her own pile of money - Kristi McDivitt, the former CEO of the Patagonia Clothing company - they began to focus their business acumen on building coalitions of funders, environmentalists and governments to create national parks.
'Spend your money on land conservation,' says McDivitt. 'To restore a creek is patriotic in my mind. Restoring the land in any form is a patriotic act.'
This eco-power couple have now created two national parks - Parque Nacional Corcovado in Chile and Parque Nacional Monte León in Argentina.
Another two are being finalised, with a total area of close to two million acres. At the centre of Tompkins' conservation efforts is Chile's Parque Pumalin, a pristine wooded ecosystem that includes volcanoes, old growth forests and hidden hot springs. The park's 740,000 acres are off limits to all development except small-scale enterprises.
advertisement
'I fundamentally believe in national parks,' Tompkins said. 'I don't believe in private parks. I believe that nations do best and have done best when they really value their parklands and areas that are off limits to development.'
Hansjörg Wyss, one of Europe's richest men, agrees. After amassing a fortune estimated at £4,200m from his position of CEO of Synthes - a company that produces artificial spinal discs and nails for repairing broken bones - Wyss has tackled a far larger reconstruction project: the wild areas of the American West.
Through The Wyss Foundation, he has donated millions of dollars to preserve wild lands in Utah and Montana.
As chairman of the board at the Southern Utah Wilderness Alliance, a grassroots conservation group in the American southwest, Wyss has instituted a corporate structure that includes a £3.5m cash surplus, investments in stocks and mutual funds and an £800,000 office building in Salt Lake City.
In order to save thousands of acres in the Rocky Mountains of Montana from development, Wyss bankrolled a simple solution; he offered to buy up the mineral rights from the mining companies.
Thanks to Wyss's understanding of corporate America, the Foundation had discovered a strategy for effectively paying the oil and gas companies to leave the area.
In that Montana battle, The Wyss Foundation was an early funder and longtime proponent of the 'buy 'em out' strategy.
The Goldman Sachs ecosystem in Tierra del Fuego
Even investment bankers Goldman Sachs have caught the bug. In 2003, Goldman Sachs received 670,000 acres of forests in southern Chile and Argentina as the result of a bankruptcy settlement.
'It was part of a large package of distressed debt. We started asking, what do we do with a million acres of forest at the end of the earth? We had to get out an atlas,' laughs Lawrence Linden, an advisory director to Goldman Sachs.
He continues: 'As an investment bank, we know what to do with shopping malls and apartment complexes. But an ecosystem in Tierra del Fuego? So we called in The Nature Conservancy to study the land and they came back with the conclusion that it was actually a very valuable piece of land from an environmental point of view.'
Today the Goldman Sachs land is a vast tract of wilderness and is home to the guanaco, a llama-like animal that roams the forests. It also has an endowment of around £9m.
"We didn't want to be a burden for taxpayers. This is not just a question of preserving a pristine wilderness,' says Pete Rose, a Goldman Sachs spokesman. 'This is about using 21st-century science to preserve a pristine wilderness.'
Across Europe, eco-barons have also invested heavily in land conservation.
Dutch businessman Paul Fentener van Vlissingen, who died in 2006, was a leading figure in the movement. From his 82,000-acre estate in Scotland - which he proudly advertised as public lands - van Vlissingen managed supermarket chains, energy companies and investment trusts. His passion was Africa's beleaguered national parks.
In barely two years, Vlissingen poured millions of dollars into the then incomplete Marakele National Park in South Africa, a job that would have taken at least 10 years without his funding. Today Marakele is part of a far bigger park system and is a healthy home to African wildlife, including elephant, white and black rhinoceros, buffalo, hyena, cheetah, wild dog, giraffe and eland.
To consolidate his philosophy, Vlissingen helped create the African Parks Foundation, an NGO that continues to reinforce the infrastructure and funding for national parks in Africa.
Before his death, van Vlissingen was widely considered the richest man in Scotland, and with tens of thousands of acres, the country's biggest landowner.
But van Vlissingen refused that title, 'You can't own a place like this. It belongs to the planet,' he once said. 'I'm only the guardian.'
Turbine plant closure hits Salmond's green dreams
Published Date: 16 August 2008
By Jenny Haworth
THE First Minister's plans for the nation to become the green capital of Europe were dealt a blow yesterday after a major wind turbine manufacturer announced plans to close its Scottish factory.
Vestas, which has its headquarters in Denmark, said it would be starting talks with its 91 employees about the future of its site in Campbeltown, Argyll, because it does not make enough money.However, insiders say the factory has been dogged by problems from the start, particularly the lengthy planning process in Scotland that has led to a lack of stability in the turbine market.Vestas made the announcement on the same day it revealed its orders for wind turbines, and its share price, had increased.The decision comes just weeks after Alex Salmond gave the go-ahead for Europe's largest wind farm to be built in Scotland, as he expressed a desire for this country to become the green capital of Europe.An industry insider said from the start the lengthy planning system brought difficulties for the factory."In 2002 there was an awful lot of confidence that the wind industry would be able to grow in Scotland quite significantly and quite quickly," he said. "That gave confidence for a lot of positive investment decisions at the time from people like Vestas. They were hoping the industry would have a regular throughput of planning decisions that would lead to orders."However, he said the reality of the Scottish planning system – which has taken up to four years to make decisions about whether to give the go-ahead to wind farms – put an end to the initial optimism.It is believed the factory has also struggled because it is not set up to build the larger turbines that are expected to be in high demand with the growth in offshore plants. It is thought Vestas was also at a disadvantage due to its remote location in Campbeltown that makes transportation of the turbine towers difficult.Hugh Scullion, regional political officer for the union Unite Scotland, said he could not believe Vestas had made this decision at a time when the renewables industry was thriving.He called for government intervention to make sure the manufacturing industry that builds turbines becomes established close to the wind farms, to make sure jobs are brought to the area.Scotland's enterprise minister, Jim Mather, said he was seeking an urgent meeting with senior management at Vestas.He added: "As a government, we are ready to do whatever we can to try and find a sustainable future for the yard."In a statement Vestas said: "Evaluations have shown that the products for which the factory was designed and streamlined do not generate satisfactory earnings."
Vestas cites huge order book in wind turbines
Bloomberg News, Reuters
Published: August 15, 2008
COPENHAGEN: Vestas of Denmark, the world's No.1 wind turbine maker, said Friday that its order backlog had ballooned, sending its shares up nearly 8 percent despite profit coming in slightly below expectations.
Vestas is riding a surge in demand for renewable energy amid soaring oil prices and increasing concerns about the effects of greenhouse gas emissions.
Vestas, which competes with Gamesa of Spain, India's Suzlon Energy and units of global power generation giants Siemens and General Electric, had an order backlog on June 30 of €7.2 billion, or $10.73 billion. This compared with €4.8 billion at the end of the first quarter and was 67 percent up on the figure at end-June last year.
Net income climbed to €65 million from €51 million a year earlier, the Randers, Denmark-based company said. Profit missed the €69 million median estimate of six analysts surveyed by Bloomberg News.
"I think there are some very strong growth signals in these results, stronger than I can ever remember seeing in Vestas," said a Sydbank analyst, Jacob Pedersen. "In particular I want to highlight the order book of €7.2 billion, I might have bid €5.5 billion if I had been optimistic."
Government subsidies and incentives for wind-energy generation have spurred demand for turbines and pushed prices 74 percent higher in the past three years, according to BTM Consult APS, a Danish wind power consultant.
Vestas said that it would expand production facilities in China and the U.S. to meet demand and offset the weaker dollar.
Vestas shares were 5.8 percent higher at 620 crowns, outperforming the Copenhagen top-20 OMX index, which was 0.8 percent up.
Vestas shares closed up almost 5 percent on Thursday and are up 15 percent this year.
Sales grew 3 percent to €1.1 billion in the quarter.
The company retained its full-year outlook, predicting sales of €5.7 billion.
"The continuing improvement in profitability is attributable to the higher prices which Vestas initiated in 2005 and the ongoing enhancement of operational efficiency," the company said in a statement.
Shares in Gamesa, Vestas's Spanish rival, gained in Madrid trading after the Vestas announcement.
Gamesa gained as much as 4.8 percent to €30.19, the biggest one-day gain since July 29.
Published: August 15, 2008
COPENHAGEN: Vestas of Denmark, the world's No.1 wind turbine maker, said Friday that its order backlog had ballooned, sending its shares up nearly 8 percent despite profit coming in slightly below expectations.
Vestas is riding a surge in demand for renewable energy amid soaring oil prices and increasing concerns about the effects of greenhouse gas emissions.
Vestas, which competes with Gamesa of Spain, India's Suzlon Energy and units of global power generation giants Siemens and General Electric, had an order backlog on June 30 of €7.2 billion, or $10.73 billion. This compared with €4.8 billion at the end of the first quarter and was 67 percent up on the figure at end-June last year.
Net income climbed to €65 million from €51 million a year earlier, the Randers, Denmark-based company said. Profit missed the €69 million median estimate of six analysts surveyed by Bloomberg News.
"I think there are some very strong growth signals in these results, stronger than I can ever remember seeing in Vestas," said a Sydbank analyst, Jacob Pedersen. "In particular I want to highlight the order book of €7.2 billion, I might have bid €5.5 billion if I had been optimistic."
Government subsidies and incentives for wind-energy generation have spurred demand for turbines and pushed prices 74 percent higher in the past three years, according to BTM Consult APS, a Danish wind power consultant.
Vestas said that it would expand production facilities in China and the U.S. to meet demand and offset the weaker dollar.
Vestas shares were 5.8 percent higher at 620 crowns, outperforming the Copenhagen top-20 OMX index, which was 0.8 percent up.
Vestas shares closed up almost 5 percent on Thursday and are up 15 percent this year.
Sales grew 3 percent to €1.1 billion in the quarter.
The company retained its full-year outlook, predicting sales of €5.7 billion.
"The continuing improvement in profitability is attributable to the higher prices which Vestas initiated in 2005 and the ongoing enhancement of operational efficiency," the company said in a statement.
Shares in Gamesa, Vestas's Spanish rival, gained in Madrid trading after the Vestas announcement.
Gamesa gained as much as 4.8 percent to €30.19, the biggest one-day gain since July 29.
Making a big splash: Hydro has the power once again
Published Date: 16 August 2008
By Jenny Haworth
AS RECENTLY as five years ago power companies would have balked at the idea of spending £20 million sprucing up ageing hydro-electric plants.
However, in a sign of the times, with soaring oil and gas prices and the attraction of clean, green energy, ScottishPower has decided this is a wise way to spend its money.The power company is to pump the cash into maintaining the dams, refurbishing the turbines and sprucing up the waterways at its three hydro-electric schemes, at Cruachan, Galloway and Lanark.The upgrading programme, which will take place over the next two years, will help keep the plants running for at least the next 25 years.Some of them were designed in the 1920s and Sandy Rae, energy management director at Scottish Power, said investing such large sums on upgrading them might, in the past, have seemed unwise.He said world energy markets just five years ago were so different it would have been an unlikely way to spend £20 million."It might have been difficult to justify the investment in them," he said."That would be a world with very low gas prices and maybe not the same focus on carbon and renewables."Certainly, the way the world looks there's a very strong future for them."The investment means the schemes at Lanark and Galloway will still be in operation when they celebrate their centenary years in 2027 and 2036. This would hardly have been expected when they were built all those decades ago. Rae explained: "We are investing this to maintain the plants, refurbish them, keep them safe and reliable and extend their life – and the environment for doing that now is very favourable."He said high oil prices, leading to high gas and coal prices, made hydro-power highly attractive."These things are leading to high power prices so the prices these generators get when they run is relatively higher than a few years ago," he said."All the benefits of the high gas and carbon prices get captured by these plants."These plants have a rosy future looking at the world as it might be in 2020."Rae continued: "Certainly in Europe we will still have a carbon trading scheme, which could be generating high carbon prices."There will be a big demand for gas in Europe, so we will have pretty high gas prices. We may even have a lack of generation, which will point towards high power prices."In that world, being a carbon-free generator, and sustainable at that, the future looks rosy."Frank Mitchell, generation director at ScottishPower, agreed hydro-electric power had many benefits over other forms of generating electricity."In a climate of global volatility in the wholesale energy markets, hydro-electric plants are proving an extremely efficient method of generating electricity as input costs are relatively low," he said. "With no signs that global markets will level off any time soon, hydro will continue to be an important aspect of our generation business, and this is reflected in our investment."Hydro is also very versatile and can be brought online quickly when required, so is an essential element in guaranteeing secure supplies of power across the entire network."Despite the age of the existing plants, ScottishPower insists they were well-enough built to survive."They were built to very high standards," said Rae. "In modern times we probably couldn't afford to spend the money on them that we had then."They would have been built with the view that we would get 50 to 60 years out of them, so the fact that they are still running might not have been expected."He said the technology had changed little since they were built."The technology around the turbines is pretty much the same. "There might be some modest efficiency gains in new turbines but there has been no significant development."Despite the strong decades ahead for the existing plants, there is little scope for new hydro-power schemes due to a lack of suitable locations.The latest large hydro-power plant to be built in Scotland is the Glendoe Hydro Scheme alongside Loch Ness, run by Scottish and Southern Energy. Building started in 2006 and it is due to come online in March 2009.It is the first large-scale conventional hydro-electric station built in Scotland for almost 50 years, and generally considered the last likely to be possible in this country."In the UK there are very few places left to do this," said Rae. "It will be more a case of maintaining the existing plants and getting the best out of them."However, he said there was scope for small schemes, maybe serving individual homes or communities. Those with a river running through their land could potentially avoid high power prices. Planning permission would also be easier to get for a smaller scheme, and it would be easier to get a grid connection.Despite advances in other areas, such as wave, wind and tidal, hydro-power still accounts for almost half of Scotland's renewable energy generation capacity.ScottishPower mainly runs its hydro-electricity when prices are highest, such as the early evening peak.The company's three schemes have a combined output of 562MW. The largest – Cruachan power station– has a capacity to power more than 225,000 homes.It opened in 1965 and consists of a machine hall hidden inside a giant cavern deep within Ben Cruachan mountain, and a reservoir at the top with a 316m-long dam. The staircase in the cable shaft has 1,420 steps, making it the tallest in Britain.To build the plant, 220,000 cubic metres of rock and soil had to be excavated and it now serves a catchment area of 23 sq km.Galloway Hydro Scheme consists of six power stations, at Glenlee, Drumjohn, Kendoon, Carsfad, Earlstoun and Tongland, which between them generate 106MW.Lanark Hydro Scheme consists of two power stations, at Bonnington and Stonebyres. It has a total output of 16MW.
Compost bug offers hope for biofuel industry
A detritus-loving bug found in garden compost heaps has been genetically 'turbo-charged' to help it break down tough plant matter at speed, a process that could be about to transform the way the world makes biofuels
James Randerson, science correspondent
guardian.co.uk,
Friday August 15 2008 13:00 BST
A detritus-loving bug that can be found in nearly every garden compost heap in the land could be about to transform the way the world makes biofuels.
Initially, it is set to make bioethanol production from corn in the US more efficient, but the British company that has developed it says it can be applied much more broadly.
Unlike the yeasts traditionally used in brewing and bioethanol production it is more tolerant of tough plant matter, so raw materials such as grasses, willow, forest waste, wheat stalks and waste cardboard could all be converted into fuel.
The company, TMO Renewables, has built a trial plant near Guildford in Surrey to demonstrate the process. It is the first plant in the UK to use so-called "second generation" raw material - inputs that are not themselves foodstuffs. "It completely eliminates the debate about food versus fuel," says the company's CEO, Hamish Curran.
Curran is no hair-shirted, lentil-eating ecowarrior. He began his career in the oil and gas industry and now has a fondness for burning around the Surrey countryside in his convertible BMW. "You have to be a petrol-head to work here," he says as we drive with the wind in our hair to TMO's demonstration plant. The hot maze of hissing and clanging silver-grey pipework is sited next to the track and hangar where the TV show Top Gear is filmed. "Whilst we want to save the planet, if it's not profitable it's not going to be sustainable," says Curran.
Critics argue that the massive expansion of biofuel production in the US has displaced food crops and taken land out of food production, contributing to a massive hike in food prices worldwide. According to a World Bank report obtained by the Guardian earlier this month, the extra demand for agricultural produce and land from biofuels has pushed food prices up by 75%. The US government claims the figure is 3%.
Using woody non-food plants would get away from the displacement problem and has long been the goal of the biofuels industry. But so far the technology to do it has proved elusive. The problem is breaking down tough molecules such as cellulose into smaller sugars that can be fermented into ethanol or other fuels.
Curran has big plans. "I see the opportunity within the UK to leapfrog the first generation and go directly to the second generation, making ethanol from biomass," he said. But he knows that is not going to happen anytime soon because the infrastructure for supplying the raw materials will take years to build up.
In the meantime TMO plans to license its technology to US corn ethanol producers. "The market is gigantic because of the legislative agenda in the US," he said. The fuel ethanol industry is currently worth around $30bn (£16bn) and this year is expected to produce between 9bn and 9.5bn gallons of fuel this year.
But making corn ethanol requires a substantial input of fossil fuels, which partially cancels out its green benefits. After fermenting the corn, producers are left with a cloudy ethanol mixture. The cloudiness is a cellulose-rich waste product that needs to be settled out, dried and then disposed of. At the moment producers recover some costs by selling the waste - called distillers dried grains - as cattle feed. That typically means transporting it from a bioethanol plant in the mid-West to a farmer in Texas using huge amounts of energy.
However, by feeding it into TMO's process, Curran says a plant could make 15% more ethanol and reduce its energy consumption by 35% to 50%. He says he has already had interest from 22 US bioethanol producers in buying the technology.
TMO Renewables began by testing thousands of bacteria from compost heaps, farm silage pits, forest leaf litter - in fact, anywhere where there were rotting plants - and testing how good they were at decomposing plant matter. They eventually settled on a Geobacillus bacterium which was particularly unfussy about what it ate, and set about genetically tweaking it so it stopped converting food into other waste products. That boosted the bug's ethanol production and at the same time the team "turbo-charged" its metabolism, as Curran puts it. So rather than taking days to ferment a batch of raw material as yeast would, it can do the same job in hours.
The genetically altered bug - christened TM242 to distinguish it from Geobacillus in the wild - is still only part of the way toward the ultimate goal of munching on raw cellulose, however. The fibrous input needs first to be blown apart with high pressure steam and then treated with enzymes to partially break up the long chains that make up cellulose molecules and convert them into sugars. That means adding enzymes to the mix, but unlike other bacteria TM242 can handle longer chain sugars so the cellulose only needs to be partially broken down.
Another advantage is that because TM242 operates at 65C to 70C and generates its own heat, the hot beer that comes out of the end of the fermentation process needs less warming to distil off the ethanol, thus saving energy.
"I think they are half way there," said Edward Green of Green Biologics in Abingdon, another company that is researching the use of bacteria to create biofuels. "Whether or not that gives them something unique - probably not. There are other people out there with similar types of microbe, but TMO probably has more of an advanced position in terms of demonstration scale up."
Some environmental campaigners remain unconvinced, however. A spokesperson for Friends of the Earth, which campaigns against biofuels, says that so-called second generation technologies are not the answer.
"Sustainable second generation biofuels are a PR promise, not a commercial reality – and are a distraction from real green transport solutions, like more fuel efficient cars, better public transport and safer routes for walking and cycling," she said.
"The EU must scrap its proposed biofuels targets and vote instead to double the fuel efficiency of new cars."
James Randerson, science correspondent
guardian.co.uk,
Friday August 15 2008 13:00 BST
A detritus-loving bug that can be found in nearly every garden compost heap in the land could be about to transform the way the world makes biofuels.
Initially, it is set to make bioethanol production from corn in the US more efficient, but the British company that has developed it says it can be applied much more broadly.
Unlike the yeasts traditionally used in brewing and bioethanol production it is more tolerant of tough plant matter, so raw materials such as grasses, willow, forest waste, wheat stalks and waste cardboard could all be converted into fuel.
The company, TMO Renewables, has built a trial plant near Guildford in Surrey to demonstrate the process. It is the first plant in the UK to use so-called "second generation" raw material - inputs that are not themselves foodstuffs. "It completely eliminates the debate about food versus fuel," says the company's CEO, Hamish Curran.
Curran is no hair-shirted, lentil-eating ecowarrior. He began his career in the oil and gas industry and now has a fondness for burning around the Surrey countryside in his convertible BMW. "You have to be a petrol-head to work here," he says as we drive with the wind in our hair to TMO's demonstration plant. The hot maze of hissing and clanging silver-grey pipework is sited next to the track and hangar where the TV show Top Gear is filmed. "Whilst we want to save the planet, if it's not profitable it's not going to be sustainable," says Curran.
Critics argue that the massive expansion of biofuel production in the US has displaced food crops and taken land out of food production, contributing to a massive hike in food prices worldwide. According to a World Bank report obtained by the Guardian earlier this month, the extra demand for agricultural produce and land from biofuels has pushed food prices up by 75%. The US government claims the figure is 3%.
Using woody non-food plants would get away from the displacement problem and has long been the goal of the biofuels industry. But so far the technology to do it has proved elusive. The problem is breaking down tough molecules such as cellulose into smaller sugars that can be fermented into ethanol or other fuels.
Curran has big plans. "I see the opportunity within the UK to leapfrog the first generation and go directly to the second generation, making ethanol from biomass," he said. But he knows that is not going to happen anytime soon because the infrastructure for supplying the raw materials will take years to build up.
In the meantime TMO plans to license its technology to US corn ethanol producers. "The market is gigantic because of the legislative agenda in the US," he said. The fuel ethanol industry is currently worth around $30bn (£16bn) and this year is expected to produce between 9bn and 9.5bn gallons of fuel this year.
But making corn ethanol requires a substantial input of fossil fuels, which partially cancels out its green benefits. After fermenting the corn, producers are left with a cloudy ethanol mixture. The cloudiness is a cellulose-rich waste product that needs to be settled out, dried and then disposed of. At the moment producers recover some costs by selling the waste - called distillers dried grains - as cattle feed. That typically means transporting it from a bioethanol plant in the mid-West to a farmer in Texas using huge amounts of energy.
However, by feeding it into TMO's process, Curran says a plant could make 15% more ethanol and reduce its energy consumption by 35% to 50%. He says he has already had interest from 22 US bioethanol producers in buying the technology.
TMO Renewables began by testing thousands of bacteria from compost heaps, farm silage pits, forest leaf litter - in fact, anywhere where there were rotting plants - and testing how good they were at decomposing plant matter. They eventually settled on a Geobacillus bacterium which was particularly unfussy about what it ate, and set about genetically tweaking it so it stopped converting food into other waste products. That boosted the bug's ethanol production and at the same time the team "turbo-charged" its metabolism, as Curran puts it. So rather than taking days to ferment a batch of raw material as yeast would, it can do the same job in hours.
The genetically altered bug - christened TM242 to distinguish it from Geobacillus in the wild - is still only part of the way toward the ultimate goal of munching on raw cellulose, however. The fibrous input needs first to be blown apart with high pressure steam and then treated with enzymes to partially break up the long chains that make up cellulose molecules and convert them into sugars. That means adding enzymes to the mix, but unlike other bacteria TM242 can handle longer chain sugars so the cellulose only needs to be partially broken down.
Another advantage is that because TM242 operates at 65C to 70C and generates its own heat, the hot beer that comes out of the end of the fermentation process needs less warming to distil off the ethanol, thus saving energy.
"I think they are half way there," said Edward Green of Green Biologics in Abingdon, another company that is researching the use of bacteria to create biofuels. "Whether or not that gives them something unique - probably not. There are other people out there with similar types of microbe, but TMO probably has more of an advanced position in terms of demonstration scale up."
Some environmental campaigners remain unconvinced, however. A spokesperson for Friends of the Earth, which campaigns against biofuels, says that so-called second generation technologies are not the answer.
"Sustainable second generation biofuels are a PR promise, not a commercial reality – and are a distraction from real green transport solutions, like more fuel efficient cars, better public transport and safer routes for walking and cycling," she said.
"The EU must scrap its proposed biofuels targets and vote instead to double the fuel efficiency of new cars."
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