Thursday, December 30, 2010

Israel revels in gas find but faces export hurdles

By Tova Cohen

TEL AVIV, Dec 30 (Reuters) - Israel can look forward to long-term energy security after the discovery of a huge off-shore natural gas field but obstacles lie ahead in exporting its output, experts said on Thursday.

Israel will find it hard to secure foreign buyers as European gas consumption is weakening while competition is stiff in the expanding Asian market, they said.

Texas-based Noble Energy and its Israeli exploration partners described on Wednesday the Leviathan prospect -- 130 km (80 miles) off the Mediterranean port of Haifa -- as the world's biggest gas find in the past decade

Leviathan is estimated to have 16 trillion cubic feet (450 billion cubic metres) of gas. Tamar, a nearby site being drilled by Noble and Israel's Delek Energy, was the largest gas find in the world in 2009, at 8.4 trillion cubic feet.

"A world power", read a headline in Israel's mass circulation Maariv newspaper, describing its new energy muscle.

But the experts pointed to a world glut in natural gas, and noted that, unlike oil which is sold on global markets, gas is geographic and needs a specific buyer.

"It's not a great time for Israel to enter a lot of the markets," said Brenda Shaffer, an energy expert at the University of Haifa. "European consumption is going down, new suppliers are coming on. I'm not sure there's a buyer waiting by the door at this point."

Shaffer noted larger amounts have been discovered onshore, where it is also cheaper to produce than in deep water.

STABILITY

Even if the hurdles to export prove insurmountable, the gas at Leviathan will give Israel, which has always been dependent on imports, long-term energy security.

Amir Kahanovich, macroeconomist at brokerage Clal Finance, estimated the gas at the site could be worth $95 billion. "A country that supplies itself with a large part of its energy is more economically stable (and) less sensitive to swings in energy prices," he said.

Production from Tamar is slated to begin in 2013 and it is being targeted for local consumption. Leviathan, its developers said, won't be ready until 2017.

The Leviathan find raises the chances of other major discoveries in the region -- off the shores of Cyprus, Lebanon, Egypt and the Palestinian territories.

The Israeli partners have talked of exporting through a pipeline or as liquefied natural gas. Shaffer said the chances of the gas being sold to Europe were small and probably the most viable option would be using existing LNG facilities in Egypt.

"Asian markets are growing in LNG imports but Israel would have to compete with Qatar, Russia and Australia, which are already producing LNG," she said.

Israel, Shaffer said, needs to develop technologies to expand the use of natural gas beyond generating electricity and into transportation and chemicals, as happened with oil, which was initially used to make kerosene for lighting.

"I've worked in countries that depend on natural resources and dreamed of developing a high-tech based economy," she said. "Israel has this high-tech based economy and wants to become a resources exporter." (Editing by Jeffrey Heller/David Stamp)

Source: http://af.reuters.com

Wednesday, December 29, 2010

LNG mixed blessing for U.K.

LONDON, Dec. 29 (UPI) -- Liquefied natural gas may help Great Britain deal with energy security but it exposes the market to global pressures, energy analysts said.

The International Energy Agency predicted a growth in the natural gas market with energy companies like Royal Dutch Shell expected to eventually produce more gas than oil.

London estimates that, as reserves in the North Sea start to run dry, the United Kingdom will rely on imports to meet 70 percent of its gas demand by 2020. As much as 60 percent of that is expected to come from LNG.

Simon Fairman, who manages a LNG terminal on the Isle of Grain, said that LNG is a mixed blessing for the region, noting shippers tend to go where the prices are most attractive, London's Guardian newspaper reports.

The United Kingdom
can get most of its energy needs through pipelines, which are susceptible to geopolitical issues. LNG, however, exposes British markets to global concerns, warns Nick Campbell, an analyst at energy consultancy Inenco.

"With pipelines we are competing against Europe for gas," he said. "With LNG, we are competing in a global market."

Source: www.upi.com

Tuesday, December 28, 2010

Road to energy security links entire region

The array of solar panels lining the outskirts of Masdar City are but one indication of the Emirate's ambitious plans for harnessing the power of the sun. Shams 1, the largest concentrated solar power plant in the Middle East being built in Madinat Zayed, is another.

And this week's announcement by Al Maskari Holding to invest in Libya's solar market is a third. As we reported yesterday, a Dh11 billion commitment to Libya's energy market will partly include "the best solar resources in the world", according to Sheikha Aisha Al Maskari, the chairwoman of Al Maskari Holding.

The Abu Dhabi-based family company is investing in Libya for the same reason that other local entities have invested in Sweden, Qatar, and Spain: the national energy policy links the UAE not just to the region, but to the world.

Renewable energy is one long-term strategy to achieve this goal. Masdar has been a driver of this investment, pouring billions into renewable energy abroad and within its own institute. Wind turbines, solar panels, and experimental technology are all aimed at generating electricity to power the UAE's growing consumption - Abu Dhabi hopes to supply 7 per cent of demand with renewable energy by 2020.

The UAE's civilian nuclear programme will also have a substantive effect to boost power not only domestically, but regionally as the UAE is expected to hook into the GCC-wide power grid early next year.

This grid has the potential to create a regional hub for energy trading that could reduce electricity costs for individual countries and eventually allow the GCC access to larger markets, such as the pan-Arab and European grids. Over the summer, countries already linked to the grid avoided rolling blackouts by more efficiently trading energy.

An interconnected GCC-wide market is the key to stability and security in countries where energy demand will continue to expand. By partnering with countries who have technological know-how or raw resources, the UAE not only has the potential to meet its own demand, but to become a producer for the region's needs.

Source: The national
www.thenational.ae

Monday, December 27, 2010

Why America Needs a 21st Century Power Grid

When the west wind blows hard across the prairies, its power can be seen in swirling leaves and bending trees.

Here in Illinois, we're harnessing more of that power every day, with 25 wind farms -- from one-turbine to utility-scale projects -- capturing the energy of the wind and converting it into electricity.

But we are facing a major obstacle in our push to build more and better wind farms and create clean energy jobs in Illinois and across the country. Because while we have the technology to generate a large proportion of America's electricity from wind power and solar energy, we don't yet have the infrastructure to store it or transmit it. That's an enormous problem - and one that can undermine our country's progress toward energy security, carbon reduction and job creation.

Here in America, we already have vast resources for "grow-your-own" renewable energy. The potential of land-based wind power is estimated at more than 8,000 gigawatts, and solar cells could generate far more. (To put those numbers in perspective, ConEd's all-time record demand for northern Illinois was just over 23 gigawatts, set on Aug. 3, 2006.)

But all that potential energy generation does us little good if we can't save that electricity for use at the times when the wind doesn't blow and the sun doesn't shine, and if we can't send it from the rural areas where it's created to the cities where it's needed the most. And that will require major investment in the electric grid -- the outdated, barely adequate system that moves electric power from generating stations to consumers nationwide.

As the director of the Argonne National Laboratory, I understand the great fiscal challenges facing our government. But I also know that a substantial American investment in clean energy generation, storage and transmission today could yield enormous returns for generations to come.

Recently, the American Physical Society -- the nation's leading physics association - tackled this critical issue in a new report from its Panel on Public Affairs, Integrating Renewable Electricity on the Grid. The report from the panel, which is co-chaired by George Crabtree, a Senior Scientist and Distinguished Fellow at Argonne, makes some fundamental recommendations:

The United States must develop an overall strategy for energy storage at every level -- from car batteries to the national grid.

We must create new, more powerful technology for long-distance transmission of renewable electricity, to balance rural supply and urban demand, and to integrate wind- and solar-generated electricity into the grid.

The APS also recommends a thorough review of the technological potential for a range of battery chemistries and a significant increase in R&D in basic electrochemistry. Achieving these goals would be great news, for our nation and for Illinois.

At Argonne, we have been working for decades to build new electrical energy storage systems and improve our nation's energy security. As a Department of Energy laboratory, we are committed to keeping the United States in the forefront of energy storage technology. Our lithium-ion battery technology powers electric cars, and our advanced materials research promises to create new electrochemical storage systems to light, heat and cool large buildings, industrial sites and even small cities.

With adequate resources, Argonne and other laboratories like ours could speed the pace of innovation and help to bring America's electric grid into the 21st century. Working in collaboration with universities and private industry, we can assemble "dream teams" that can keep our country in the forefront of energy technology.

Right now, America's aging power grid resembles the patchwork of narrow, winding, badly maintained highways of the 1920s and 1930s. Without the vision -- and substantial public investment -- that led to the nationwide Interstate Highway System, it would have been impossible for trucks to move large quantities of goods swiftly, safely and affordably to American cities and towns from coast to coast.

Today, we need to make the same kind of long-term, strategic investment in our power grid, making it possible to capture and store wind- and solar-generated energy and transmit it quickly and efficiently to businesses, manufacturers, and consumers nationwide.

The stakes are huge, for our nation and for Illinois. According to a new study by the Environmental Law and Policy Center in Chicago, there are more than 100 Illinois companies -- with a total of 15,000 employees -- working in the wind power supply chain. The study estimates that every megawatt of power developed creates 17 new manufacturing jobs.

President Eisenhower's investment in the Interstate Highway System, which created a 20th century infrastructure for 20th century transportation, has yielded extraordinary dividends for our country and our economy. It's time to build a 21st century electricity grid to transmit and store the clean, renewable power America needs to remain competitive in this century.

Source: The Huffington Post

http://www.huffingtonpost.com

Friday, December 24, 2010

Government announces 5 year energy strategy

The ruling National Democratic Party (NDP) has devised a five-year strategy aimed at securing Egypt's energy needs.

The plan--to be announced next week at the party's final conference before the presidential elections--aims both to increase domestic production and pursue regional partnerships to fulfil Egypt's needs. It deals with energy security on a domestic, regional and international level.

Egypt aims to take advantage of opportunities in neighbouring countries, using its strategic location, one of the authors of the strategy told Al-Masry Al-Youm.

Kuwait, Saudi Arabia and Yemen have recently built technologically advanced refineries, which will increase their need to create markets for their oil products, the source said. Egypt can use its location to broker marketing partnerships with neighboring countries, at the same time as meeting its domestic needs.

Another source, also speaking on condition of anonymity, said that an extension of gas pipes to import natural gas from Qatar was unlikely due to technical difficulties despite the improvement in relations between Egypt and Qatar.

The source said no decision to import gas had been made, while the NDP strategy paper leaves the question open, saying Egypt must first establish its capacity and needs.

But the paper stresses the need to increase local production of oil and gas, and to improve research and development agreements so that Egypt becomes more appealing to international firms. Incentives are needed to attract foreign investment in the sector, it said.

It notes the need to pay close attention to international oil markets and their fluctuations.

The source said there would be no discussion of subsidies in the upcoming period to avoid a public outcry, and because of disagreements within the government on the subject. A number of economic models are being considered, the source said.

Most of the recommendations presented by the NDP's energy committee have been implemented over the past few years, including the recommendation to pursue a peaceful nuclear energy program to generate electricity and to expand electric stations to liberalize energy prices for factories, the source said.

Source: Al-Masry Al-Youm

http://www.almasryalyoum.com/en

Thursday, December 23, 2010

2011 Florida Renewable Energy announces Miami Tour Stop

The Global Energy Security Forum at Florida International University (FIU) and the Greater Miami-Dade/Kendall Chamber of Commerce are set to host events focused on job creation & energy security.

Miami, FL The Florida Alliance for Renewable Energy (FARE) is excited to announce the next confirmed tour stops in its 2011 Renewable Energy Tour which is set to feature events at the Global Energy Security Forum at Florida International University (FIU) and the Greater Miami-Dade/Kendall Chamber of Commerce (Chamber South) and is set for Friday, February 11th, 2011. The tour will consist of visits to various renewable energy and energy efficiency installations in the area as well as a Town Hall event including local and state legislators and industry experts, featuring discussions about advancing renewable energy and energy efficiency in Florida.

The 2011 Renewable Energy Tour will be traveling across Florida, visiting 10 cities in the month of February, leading up to the beginning of March legislative session. The tour will focus on renewable energy policy, and discussion will include local job creation, manufacturing and export, and local economic resurgence.

Miami, Florida, known as "The Gateway to the Americas", is home of a multi-billion dollar trade industry with Latin America and a growing economy. The focus of the Global Energy Security Forum at FIU is to inform and educate diverse audiences about the economic, political, business, environmental and security realities of energy. Chamber South is a leading business organization in South Florida, and serves as the voice of businesses in South Miami, Kendall, Cutler Bay, Pinecrest, Palmetto Bay and Greater South Dade. (www.chambersouth.com)

According to Mike Antheil, Executive Director of FARE: "As one of the largest cities in the country, Miami could soon lead the country in many aspects of the renewable energy industry too. With the creation of Florida's first true long term marketplace, Miami could be the renewable energy export hub to Latin and South America, an opportunity that could bring billions of dollars and bountiful job creation for Florida."

By FARE Staff

Source: Renewable Energy Network for News & Information

http://www.renewableenergyworld.com

Wednesday, December 22, 2010

US wants trade talks on China wind power 'subsidies'

The US says China is illegally subsidising the production of wind power equipment and has asked the World Trade Organisation (WTO) for talks.

It estimates China has given several hundred million dollars in questionable government grants to its companies which has distorted trade and made it tougher for American exporters.

It is the latest in a series of trade disputes between the two countries.

In 2008, China set up a "Special Fund for Wind Power Manufacturing."

US wind turbine manufacturers, including the giant General Electric and United Technologies want to sell their wares to China, which is potentially the biggest wind turbine market in the world.

'Expressly prohibited'

Its Trade Representative, Ron Kirk, said in a statement: "Import substitution subsidies are particularly harmful and inherently trade distorting, which is why they are expressly prohibited under WTO rules."

The announcement follows a filing in September by the United Steelworkers Union (USW) which listed a number of industries it accused China of subsidising or otherwise distorting trade from non-nationals.

It included a complaint about China's restrictions on rare earth minerals, which are used in production of wind turbines, electric vehicles, solar cells and energy efficient lighting.

The trade representative announced no decision on that, but spokeswoman Nefeterius McPherson said the United States was "very concerned about China's export restraints on rare earth materials, antimony and tungsten" and could still file a case on that at the WTO.

China has made some moves to open up the wind turbine market to outside countries.

It no longer requires foreign companies bidding for large-scale wind power projects in China to have had experience in China.

Source: BBC
www.bbc.co.uk

Tuesday, December 21, 2010

Shale gas: an energy saviour?

There's a damp chill in the Louisiana bayou as dawn casts a pink light on the swamp cypresses festooned in moss.

This is a wooded state, and timber is a steady earner for people in the countryside.

But follow the new roads snaking into the forests and you'll find a new source of wealth - brought up from nearly two and a half miles below ground.

Louisiana is cashing in on its slice of the great American boom in shale gas.

Engineers have known for decades that huge reserves of gas lay trapped tight in shale rocks - but they couldn't extract it economically.

Now that they have found a way to get it out, shale gas is being hailed as the saviour of America's energy independence.

Clay metamorphises to shale under geological heat and pressure. Shale can eventually metamorphose to slate.

Over a few years since commercial operations began at scale, shale gas has helped consumer gas prices in the US to fall by about a third; it's offered gas security to the US and Canada for maybe 100 years; and it's presented an opportunity to generate electricity at half the CO2 emissions of coal.

Safety question

Shale gas has also been accused of poisoning water supplies, killing livestock, destabilising the landscape and of sucking investment from the renewable technologies said to be vital for combating climate change.

The industry vigorously denies that shale gas is unsafe - and blames pollution incidents as examples of bad practice, rather than an inherently risky technique.

And the technique of smashing the gas out of shale is certainly impressive.

Conventional gas-bearing rocks like sandstone and limestone are porous - so if you bore into a gas-bearing seam the pressure difference brings the gas flowing to the surface.

Not shale, though. Its clay particles traps gas molecules so tight that it's been impossible to extract commercially until engineers combined existing technologies of horizontal drilling and "fracking".

I visited Shell's shale operations drilling in the Louisiana forests to see the operation first hand.

They're tapping part of the Haynesville field which has made millionaires out of landowners in Louisiana, Texas and Arkansas and has helped insulate thse states from the recession. The field contains an estimated 20-30 trillion cubic feet of gas.

Phase one involves a drilling a nine-inch hole 12,382 ft down, then turning a five-inch bore horizontally for 4,389ft along the shale seam.

Once in a century

Then the rig is removed, and the frack team arrives. They feed a "perf gun" down the bore. It's a steel tube packed with a string of explosives that blow holes the width of a fine knitting needle 18 inches into the surrounding shale.

Then the perf gun is withdrawn and 16 massive trucks move in. Together they generate 7,800 psi pressure to force a mixture of fine sand, water and lubricant chemicals into the bore. The sand blasts into the piercings in the shale and jams open crevices so the gas can find its way into the bore.

Phase three is to remove almost all the equipment leaving just a few bits of kit in the cleared square in the forest. Production from this incongruously modest installation will peak over the first two years but will keep drawing out shale gas for decades.

"Shale gas is a once-in-a-century opportunity," Shell's Russ Ford told me. "It's giving north America energy security from imports, it's offering a lower-carbon fuel, and it's creating jobs." He estimates that shale will be providing 20% of US gas by 2020, and more thereafter.

But there are several controversies over environmental impacts. Some geologists fear that fracking may destabilise the ground. Then, when the drillers plunge through aquifers - water-bearing rocks supplying homes - they must seal the borehole so water doesn't leak in and waste doesn't leak out. If this isn't done right, there's trouble.

Some of the fracking water injected into the well gets absorbed by the shale. But some burps back contaminated with chemicals and has to be disposed of as hazardous.

At Shell's site in Louisiana it's injected under licence into exhausted deep gas fields sealed off from the surface by impervious layers of rock.

Methane escape

But not far from here in Shreveport cows were killed at an American firm's gas site after drinking frack water that had belched up to the surface.

Homes were evacuated when methane escaped uncontrollably from a well-head. And a documentary, Gaslands, shows extraordinary scenes of householders in New York State running taps with well water so laced with methane that they can set light to the gas in the sink.

Some of the gas operations are close to major population centres, and many people are angry that firms say the chemicals in fracking are a commercial secret. The Environmental Protection Agency (EPA) is investigating shale gas extraction and expects to report in 2012.

A spokesman from the US Environmental Protection agency told us: "There are serious concerns about whether the process of hydraulic fracturing impacts drinking water, human health and the environment and further study is warranted. We will make every effort to produce a final report as swiftly as possible."

The gas firms have half an eye on the electoral calendar as the head of the EPA is a political appointment. Gas states tend to be Republican whilst coal states tend to vote for Democrats. So politics might play a part in how tightly shale gas is regulated.

Shale gas is just one of three types of booming "unconventional" gas supplying America with what the gasmen call "indigenous molecules".

"Tight gas" previously trapped in sandstone can now be harvested by fracking and there's also a rush to suck methane out of coal beds.

US gas prices have dropped about 50% over the past few years, partly thanks to the recession but partly thanks to America's sigh of relief that it won't need to import much gas.

Converting terminals

Some terminals built to import liquid natural gas are now being converted to exports.

The boom in unconventional gas looks to be globally significant. With the US no longer seeking imports, the pressure is off international prices. China is also believed to have very large deposits of unconventional gas. Poland, Germany, Holland and even the UK may have commercially viable deposits.

Europe will still import gas from Russia, but every unconventional gas development erodes Moscow's role as energy superpower.

Dr Manouchehr Takin from the Centre for Global Energy Studies said: "Shale gas is definitely a phenomenon. Shale is deposited all round the world and we can expect there to be shale gas reserves in many many countries, although it's not clear yet how much will be commmercially viable.

"It will depend on how much organic material has been laid down with the shale and how much gas has already escaped. It is going to allow almost every country a degree of energy independence."

The gas may have an impact on energy policies worldwide. In the UK, for instance, energy policy offers incentives for nuclear and wind to promote low-carbon growth but also to avoid dependency on "unreliable" gas supplies.

Unconventional gas is making those supplies more reliable, and some firms may press for a greater role for gas, which is more polluting than renewables but cheaper and more flexible.

The other impact may be on investment patterns. The International Energy Agency (IEA) identifies a major shortfall in capital for renewables.

There is finite energy cash globally, and some big firms seeking assured profits are already switching their investment from offshore wind farms - untested in the long term - to those familiar hydrocarbon molecules emerging from unfamiliar places.

By Roger Harrabin

Source: BBC
www.bbc.co.uk

Monday, December 20, 2010

YLighting Expands Energy Efficient Lighting Options in Preparation for Industry Growth

By Walnut Creek

With the Energy Efficient Lighting market estimated to grow 35% per year through 2012, YLighting, the largest retailer of modern lighting, continues to expand its energy efficient lighting options. In addition to introducing a range of new Light Emitting Diode (LED) and fluorescent lamp designs, YLighting now provides educational content to guide consumers and trade professionals on selecting the best energy efficient lamp for their needs.

Key drivers in the growth of the energy efficient lamping market include consumers' preference to be more eco-conscious, improvements in LED and fluorescent technology, and the upcoming phase-out of incandescent lighting in the U.S. market through the Energy Independence and Security Act of 2007.

"Modern design enthusiasts have always been early adopters of eco-friendly technologies, such as LED lighting," said Sean Callahan, CEO of YLighting. "Until recently, usage of LEDs was limited by the upfront price difference. However, as technology improves and the prices of LEDs drop, homeowners, interior designers and other trade professionals have a growing number of options that combine energy efficient lamps with elegant design. YLighting continues to work with renowned lighting manufacturers throughout the world to obtain new energy efficient designs and make them available in the U.S. market as quickly and economically as possible."

Significant advances in technology and innovations in lighting design make energy efficient LED and fluorescent lamps more cost effective, functional and beautiful than ever. State of the art LEDs are brighter and warmer than earlier LED generations and they remain drastically more energy efficient, durable and longer lived than traditional incandescent lamps. Due to their miniature footprint, they are also inspiring a host of new lighting designs, as they can be embodied into almost any form.

While fluorescents have been around for quite some time, manufacturers continue to tailor lighting designs to accommodate them. "We continue to see more and more manufacturers release modified versions of their classic designs to now utilize fluorescent and compact fluorescent lamp options," said Callahan.

Another driving factor of both consumer and manufacturer interest in energy efficient lamping options is the Energy Independence and Security Act of 2007, which requires roughly 25 percent greater efficiency for light bulbs, phased in from 2012 through 2014. "As the phase-out of incandescent nears, we're excited to see manufacturers' commitment to not only producing energy efficient lamping, but to producing high-quality lamps that marry energy efficiency and elegant design," said Callahan.

YLighting also recently launched the first in a series of energy efficient lighting resources.

About YLighting:
YLighting was founded in 2001 with the idea that modern lighting is functional art but buying it shouldn't be a project in itself. We travel the world to find exciting new designs and give our customers the finest in modern and contemporary lighting, ceiling fans and accessories. We carry over 6,000 designs across more than 110 brands and are one of the largest retailers for brands such as Artemide, FLOS, Modern Fan, Nelson Bubble Lamps, Foscarini and Louis Poulsen. YLighting serves design-savvy customers, trade professionals and businesses. Our website is a comprehensive lighting resource with the largest collection of product-specific lighting data available. YLighting's sister-store, YLiving offers the best in modern furnishings and accessories.

Source:SFGate
www.sfgate.com

Thursday, December 16, 2010

Energy firms to get new low-carbon incentives

The government is to guarantee prices for electricity to persuade the private sector to invest in new low-carbon forms of generation.

The move is part of a range of proposals outlined by Energy Secretary Chris Huhne.

Mr Huhne dismissed reports that consumers' electricity bills could rise by £500 a year as a result of the measures as "absolutely bonkers".

He said prices would rise by less than they would without the measures.

'Sustainable future'

Mr Huhne said the government's proposals were fourfold:

* to increase the long-term certainty about investment in power generation by providing greater support to the price of carbon to encourage new entrants into the market
* to introduce long-term contracts for low carbon generation to make clean energy more attractive, including top up payments to low carbon generators if the wholesale price of electricity is low
* to make additional payments to develop reserve plants to ensure "the lights stay on" during periods of high demand
* to limit the amount of carbon emissions from "dirty" power stations, including reinforcing current requirements that new coal power stations must incorporate carbon capture and storage.

Mr Huhne said the measures "were a once-in-a-generation chance to lay the foundations for the sustainable economy of the future".

He said the recommendations would now go out for consultation, and hoped a White Paper would be in place by the Spring of next year.

Opposition MPs said they welcomed the proposed measures, but said the government must ensure that consumers did not bear their costs.

Some, however, expressed concerns that the proposals amounted to subsidies for the nuclear industry.

Mr Huhne responded by saying that subsidies would be available for all forms of low carbon power generation, whichever proved to be the most attractive.

However, he said there would be no subsidies for the construction of any plant, nuclear or otherwise.

"All risks of construction fall on the investor, not on the government," he said.
'Huge cost'

Price comparison website uSwitch has estimated that bills will rise by £500 a year if the measures are introduced.

But Mr Huhne told the BBC that the average electricity bill of £500 a year would rise by £160 a year over the next 20 years, and if the new measures were not put in place, bills would rise by £190 a year.

The industry regulator Ofgem has estimated that bills could rise by as much as 25% over the coming decade.

David Porter, chief executive of the Association of Electricity Producers said: "Politicians and the regulator seem to recognise that the huge cost of doing this will push up customers' bills.

'Best deal'

The aim of the new framework is to ensure the UK has the electricity generating capacity it needs, while still meeting its climate change targets.

"We've got to replace about a quarter of our ageing coal and nuclear power stations anyway, and since energy companies are not the Salvation Army and are going to have to make a return if they are going to make this investment, there is going to be a rise in energy bills," Mr Huhne said.

He said the new framework would provide certainty that would "remove the risks of being buffeted by oil and gas [price] shocks".

This certainty "would ensure consumers get the best possible deal by encouraging more competition into the marketplace", he added.
Energy gap

In the next 10 years a quarter of our generation capacity is due to come off line.

Roughly half of that is due to tightening environmental regulation. But many of Britain's ageing nuclear plants are also due to close.

The government wants industry to build a new generation of power plants using low-carbon technologies including renewables, nuclear, and clean coal and gas.

So it is proposing a range of incentives to give investors the certainty they will need, saying its plans represent the biggest reform of the electricity generation market in 25 years.

For low carbon generation - including nuclear - it is proposing a feed-in tariff with long contracts. This will give investors a guaranteed price for their electricity.

There would be extra support for what are described as younger technologies like offshore wind and wave power.

But the government maintains that there will be no specific subsidy for nuclear.

There will also be capacity payments to ensure there is back-up plant available on those days when the wind doesn't blow.

There will be disincentives too. These will include support for the carbon price - which would make it expensive to generate power using dirty coal.

And an emissions performance target will also ensure there is no new unabated coal-fired electricity generation.

Environmental groups are likely to welcome the plans.

In a statement, Friends of the Earth described the reforms as a once-in-a-generation chance to set energy policy for the next 20 years, adding that "it's crucial the government makes the right decisions to ensure renewable power thrives instead of locking us into a dangerous high-carbon world."

Source: BBC
www.bbc.co.uk

Can you fit a wind turbine in a housing estate?

Money Talk
By Ian Blake
Associate director, Sutton Griffin Architects

How many people are actually going to be able to install renewable energy-generating technology in their homes?

That is the burning question which goes unanswered in the government's strategy document called "Warm Homes, Greener Homes", which outlines how it plans to cut carbon emissions from homes by 29% by 2020.

The plan includes helping as many households as possible install loft and cavity wall insulation within the next five years, and fitting seven million homes with solid wall insulation or renewable energy-generating technology such as solar panels or wind turbines by 2020.

This is a major commitment by the government, but while the document goes into detail about how it intends to deliver on this commitment, it does not really answer the question about how it will work.

For example, will a wind turbine work in the middle of a housing estate?

And, in a country that is hardly known for year-round sun, is it feasible that millions of homeowners can rely on solar electricity systems to power their homes?

Much has been written on the theory of renewable energy-generating technology in the home, but what about the practice?

Bring me sunshine

It is a misconception that solar electricity systems, which convert sunlight into electricity by capturing the sun's energy using photovoltaic (PV) cells, need direct sunlight.


Permission is still needed from the local authority to install a domestic wind turbine

The PV cells can actually generate electricity on a cloudy day. However, the cells do need to be installed on a roof or wall that has an aspect that is within 90 degrees of south and is not overshadowed by buildings or trees.

Any shadow on the cells during the day will decrease the output of the system.

Then there is the issue of attaching the PV cells. The cells need to be attached to either a roof or wall strong enough to take their weight. They are not light and it is definitely worth checking with a qualified installer before proceeding.

If you live in an apartment and do not have roof access, then you will need your landlord's permission before mounting PV panels on the roof and connecting a cable from the panels to your flat. This is likely to be an issue with older, high-rise buildings.

Trusting gusts

Wind turbines generate electricity by harnessing the power of the wind. There are two types of domestic small wind-turbines: mast-mounted, which are free standing, and roof-mounted, which can be installed on the roof of a home.

Small wind turbines work best in exposed locations where there are no large obstacles like other houses, trees or hills, so this immediately rules out a large number of properties in urban and suburban areas.

Also, to work effectively, wind turbines need an average wind speed of no less than five metres per second, which counts out many areas of the UK. The ideal location is a smooth-top hill, with a flat, clear exposure, free from excessive turbulence and large obstructions.

In April 2008, the government relaxed the planning requirements for the installation of domestic microgeneration equipment, although permission is still needed from the local authority to install a domestic wind turbine.

This is not the case for solar electricity devices as long as they are below a certain size, although it is worth checking with the local planning office if your property is listed or in a conservation area or World Heritage site.

If the property is a listed building it is likely to require an application for listed building consent, even where planning permission is not required.

It is worth noting that these permitted development rights only apply to houses. Flat owners will need to make a planning application for any outside installations.

Prices

The cost of installing a solar electricity system can be anything from £8,000 to £14,000 depending on type and size. Also, PV panels that are built into a roof will cost more than those that sit on existing roof tiles.

Again, domestic wind turbines are not cheap, although a roof mounted system can be purchased from as little as £1,500. Larger mast-mounted systems are a lot pricier, costing between £10,000 and £19,000.

To install PV panels you will need a MCS (Microgeneration Certification Scheme) electrician. The existing electrical meter will also have to be replaced with an input/output meter, and cable connections will be required from the roof to the meter.

This will cause some minor disturbance to the fabric of the house, such as lifting of floorboards and drilling holes through walls.

The homeowner will also be required to satisfy Part P of the Building Regulations (electrical safety), which, like the planning application, will involve a fee.

Maintenance

Fortunately, PV panels need very little maintenance, other than being kept relatively clean and free from any shade from trees growing nearby.

The wiring and components of the system need to be checked regularly by an MCS-qualified electrician, who will require access to the panels. Depending on location and property, this could involve temporary scaffolding.

As for wind turbines, maintenance checks are advisable every few years, and a well-maintained turbine should last more than 20 years. You should also consider insuring your equipment, whether solar or wind. Your existing home insurance company may offer cover but if not try a specialist insurer.

For many homeowners, location, property type and the wrong weather conditions will make solar panels and wind turbines completely impractical as a green solution for their properties, irrespective of cost.

And for those who can benefit from this energy generation technology, many will consider the savings made are not impressive enough to justify the effort and expense, even with the help of the government's "green loan" scheme that is intended to circumvent the punitive up-front costs.

Although eco-makeovers will be right and convenient for some, for the majority of us the practice of installing energy generation technology is lagging behind the theory.

We are moving in the right direction, that much is sure, but it could be a few more years before people can make a seamless transition to domestic renewable energy generation.

The opinions expressed are those of the author and are not held by the BBC unless specifically stated. The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Links to external sites are for information only and do not constitute endorsement. Always obtain independent, professional advice for your own particular situation.

Source: BBC
www.bbc.co.uk

Gas and electricity prices: How are they calculated?

Money Talk by Ben Essex
Lead energy analyst at ICIS Heren

Energy prices are going up. Both British Gas and Scottish and Southern Energy (SSE) are putting up gas tariffs in December, and other major energy providers may follow suit soon.

The companies have blamed a 25% increase in wholesale costs this year. But have wholesale prices gone up? And how does the wholesale price relate to the figure that appears on your energy bill?

Is blaming the wholesale price justified?

Wholesale prices

With other costs to supply energy relatively fixed and constituting a small part of your overall energy bill, energy suppliers almost always cite wholesale prices as the reason behind a change in their tariffs.

But at any one time there are many different wholesale prices, so to say they have gone up by 25% is meaningless. All of these wholesale prices have in fact gone up over the period quoted by SSE and British Gas.

But anyone who knows anything about the energy market also knows that a wholesale price movement can be found to support pretty much any retail energy price change - whether up, down, big or small.

So, how does the wholesale market work?

Before gas and electricity gets into your home, it is first sold to the energy suppliers.

In the UK, some of the big household suppliers produce or generate a proportion of their own energy. But they buy most of it either direct from the producers who generated the power or sourced the gas, and the rest is bought from the traded wholesale markets.

In either of these scenarios, the UK suppliers are usually paying the price set by the traded market, where a variety of producers, utilities and speculators are active every day.

Each energy supply company will have a small team of energy traders and analysts in their central office trading and monitoring price movements in the gas and electricity markets throughout each day. These energy traders are not dealing with a singular wholesale gas or electricity product - but a myriad of gas and electricity "contracts" which are defined by the period within which the energy is to be delivered.

So, as an energy trader, today I can buy energy for today. And that energy will be priced differently to gas or electricity which I buy for delivery tomorrow. Both of these prices will be different to energy priced for delivery this weekend, next week, next month, next year, or even in five years time.

Complications

To further complicate matters, contract prices can change every second, as sometimes hundreds of trades are made on the same contract each day. So the difference in price between contracts, and even for the same contract over the course of the day, leads to a plethora of wholesale prices.

The traded price of a gas or electricity contract on the wholesale market will be defined by a number of factors.

In the near-term price changes are usually supply and demand-based. For instance, if it is colder next week, then the country will need more energy as households turn up central heating.

As a consequence the price of energy for delivery next week will probably go up. Longer-term prices, for example, energy for delivery in 2014, are more likely to change on broader macro-economic factors, as well as the prices of other energy commodities, primarily oil.
What do the suppliers pay?

Because there is not a single wholesale price, energy suppliers are over-simplifying the matter when they say their prices went up as wholesale prices have gone up by 25%.

In fact the gas and electricity flowing into households and businesses across the country today will have been bought by the energy suppliers anytime between now, and as far back as five years ago.

Suppliers will likely have spread out their purchases of energy for delivery today over a long period of time, to mitigate risk caused by volatility in the wholesale market.

Furthermore, each energy supply company will then buy and re-sell energy constantly in a bid to secure lower wholesale prices, further blurring the calculation of a wholesale price change.

This makes the 25% figure even more disingenuous. It also means that the company with the most effective trading strategy can end up paying much less for their supplies of gas and power than a competitor.

To give an example, if a supplier bought gas for delivery in the fourth quarter 2010, back in July 2008, it would have cost it over 100 pence per therm (p/th). Yet in spring this year, the same contract fell below 40p/th.

Competition

Since the liberalisation of the energy markets in the 1990s six major suppliers have emerged competing to supply us with gas and electricity. The "big six" - British Gas, E.ON Energy, EDF Energy, npower, Scottish and Southern Energy, ScottishPower - have successfully tied up 99% of the market share for both gas and electricity supply for the residential market.

With only six companies dominating the market, many people question whether competition exists. An allegation given credence each time the suppliers change tariffs en masse, even if the tariffs change by different amounts.

However, last year British energy regulator, Ofgem, investigated just this, gaining access to the suppliers' energy trading portfolios, and concluded there was competition in the residential energy supply market.

If there is competition, why do they change prices in unison?

From the suppliers' perspective, when they set residential energy tariffs, they have one thing in mind - profit maximisation. Tariffs need to be low enough to beat the competition, but high enough to keep their shareholders happy.

But when one supplier changes their tariff, it is as if they are revealing their hand in a game of cards. Other companies become emboldened to either increase prices or are forced to slash them to remain competitive.

So what can you do? From a consumer's perspective, the key factor which will promote competition and fair pricing in the energy market is if individuals respond to price changes, and switch suppliers frequently. The more customers respond to price signals, the more the suppliers will be forced to compete with each other.

The opinions expressed are those of the author and are not held by the BBC unless specifically stated. The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Links to external sites are for information only and do not constitute endorsement. Always obtain independent, professional advice for your own particular situation.

Source: BBC
www.bbc.co.uk

Monday, December 13, 2010

The Isle of Man to reduce its energy dependency

The Isle of Man must strive to reduce its energy dependency according to Environment Minister John Shimmin.

The statement follows the publication of a report by consultancy firm AEA, detailing renewable energy options for the Island.

The report was commissioned by Tynwald to advise the Manx government on how to develop future energy policies.

John Shimmin said: "We must take control of our energy consumption and tap into in the renewable field."

He added: "One of the areas we are considering is on-shore wind generation but we need to see if we can actually afford it without it having a negative impact on current energy prices."

The report says significant investment is needed if the island is to achieve its target of having 15% of electricity generated from renewable sources by 2015.

It expresses concern that there appears to be "no fiscal or economic incentives to promote renewables on the island".

Mr Shimmin said: "I remain optimistic we can make those commitments, the capacity is there and the technology is there.

"Individuals on the island must look at their own energy use and be more energy efficient."