P03

A new age of transition

to sustainable energy

P06

Keeping the lights on

with clean energy

POWERING
THE FUTURE

P16

The dazzling rise of

of solar power

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P03

Overview

Publishing Manager
Nada Ali
Managing Editor
Peter Archer
Head of Production
Natalia Rosek
Commissioning Editor
Jim McClelland
Design, Infographics & Illustration
The Design Surgery
www.thedesignsurgery.co.uk

Contributors
JIM McCLELLAND

Sustainable futurist, speaker, writer and social-media

commentator, his specialisms include built environment,
corporate social responsibility and ecosystem services.
FELICIA JACKSON

Editor at large of Cleantech magazine and author of

Conquering Carbon, she specialises in issues concerning
the transition to a low-carbon economy.

ITS TIME FOR THE

GRAND TRANSITION
Image: Getty

MIKE SCOTT

Freelance journalist, specialising in environment and

business, he writes regularly for the Financial Times, The
Guardian, Forbes and 2degrees Network.
RAYMOND SNODDY

Writer, presenter and media consultant, he was media

editor at the The Times and Financial Times, and presented
BBC Televisions public accountability programme
Newswatch.
BEN WILLIS

Writer and editor specialising in renewable energy and

sustainability, he is head of editorial at Solar Media,
publisher of PV-Tech.org and Photovoltaics International.

Although this publication is funded through advertising and

sponsorship, all editorial is without bias and sponsored features
are clearly labelled. For an upcoming schedule, partnership
inquiries or feedback, please call +44 (0)20 3428 5230 or
e-mail info@raconteur.net
Raconteur Media is a leading European publisher of special
interest content and research. It covers a wide range of topics,
including business, finance, sustainability, lifestyle and the arts.
Its special reports are exclusively published within The Times, The
Sunday Times and The Week. www.raconteur.net
The information contained in this publication has been obtained
from sources the Proprietors believe to be correct. However,
no legal liability can be accepted for any errors. No part of this
publication may be reproduced without the prior consent of the
Publisher. Raconteur Media

The UK may at last be approaching a new age of grand

transition as sustainable clean energy moves on to the
balance sheet, writes Jim McClelland

t is tempting to be selective and take sustainability

success stories, such as the
positive climate stance of President
Obama, Rockefeller Foundation divestment, and record-breaking solar power generation in China and
Germany, as evidence of a global
tipping-point moment for the clean
and green agenda.
The worlds energy is in the
middle of a grand transition, argues Michael Liebreich, founder
and chairman of the advisory board
at Bloomberg New Energy Finance,
from a centralised, fossil-based,
analogue, geopolitically risky system to one which will be cleaner,
more decentralised, local, smart and
lessexposed.
Systemic shift is, however, proving neither smooth nor swift, and
Mr Liebreich lays responsibility for
difficulties and delays at the door
of politicians. The single factor
holding back a faster transition is
policy uncertainty; the fact that
policymakers are all over the place,
not knowing whether to believe the
self-evidently strengthening forces
behind the clean energy transition
or to listen to the threats of the fossil incumbency that the lights will
go out and the economy will crash,
he says.
While revolution may not yet be
in the air, change is definitely on
the balance sheet, contends social
entrepreneur, author and founder

of Solarcentury, Jeremy Leggett.

There are two spectacular energy
trends that are increasingly difficult
to ignore: oil and gas, capex [capital
expenditure] cost up; and solar and
storage, cost down. Each could be
transformative in its own right. But
they are unfolding, by coincidence,
at the same time.
UK sector statistics for last year
only serve to illustrate how much
there are currently two competing
energy agendas in play at once, both
bankrolling market growth. Capital
investment for 2013 of 14.4 billion
in UK oil and gas reserves was the
highest for 30 years. At the same
time, a record year was announced
for green energy, with electricity
generation from renewables hitting
almost 15 per cent of the national total. However, this figure was still less
than half that boasted by one of the
dirtiest forms of power generation,
coal at 36 per cent.
COMMUNITY AND CONSUMERS

In terms of the geography and

architecture of tomorrows energyscape, there are many different
scales of ambition and application
for smart and intelligent systems
as the focus zooms in from country
and region, via city, community and
street, to building or house.
According to Professor Andy
Stanford-Clark, chief technologist
for smarter energy at IBM UK, community and regional energy systems

show great promise for innovation

and significant changes in the landscape of the future grid. However, this
dynamic energy equation includes
one rogue parameter the consumer.
You need three things: technology that can link systems together
appliances, houses, streets, storage systems, energy markets; scale
enough houses co-operating to
make a significant impact; and involvement the hardest part, getting
people to commit to change their behaviour, reduce consumption, act as
part of a community, he says.

ation (SEA). The SEA Manifesto

incorporates modelling using the
Department of Energy & Climate
Changes own tools that clearly
demonstrates energy goals can be
achieved through greater focus on
measures in buildings at a cost to
the economy of around 12 billion
per year less than the governments
current plans.
If the building-level business case
is clear, why then does UK government not demonstrate more policy
commitment and fiscal support in
this field?

At the most senior levels in government,

there is an absence of understanding about
the scale of the economic prize
Therefore, while sensors, actuators, communications systems and
intelligent software might help
manage the grid in balance, despite
more devices swimming around in
a decentralised system, it is people
who may prove the problem.
But the internet of things (IoT)
can help us adapt, explains Professor Stanford-Clark. IoT devices in
our homes, cars and the environment around us will help us understand our energy use. Making consumers aware is an essential first
step towards reducing use and carbon emissions. Otherwise, its like
driving a car without a speedometer
you know youre going along, but
have no idea how fast, he says.
In terms of simple economics,
though, when debate gets down to
UK building-level solutions, do the
figures actually add up? Absolutely the numbers are compelling,
says Dave Sowden, chief executive
of the Sustainable Energy Associ-

At the most senior levels in

government, there is an absence
of understanding about the scale
of the economic prize, concludes
Mr Sowden. Energy efficiency
and building-level production
of sustainable energy has never
really been regarded as an infrastructure priority. Policy instruments in this area are mostly
short term and lack the longevity
investors need.
For the UK, the challenge of powering the future is being met with a
mix of ambition, innovation and passion, but also a fair deal of frustration.
The energy picture of tomorrow is
by no means wholly green and never
black and white. There is no policy
panacea, no silver-bullet technology, but where there is change, there
is also opportunity. Welcome to the
age of the grand transition.

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Politics

Energy is a central cost of the UK

economy and is, therefore, a political
football, as Mike Scott reports

4.4% 12% 21%

increase in consumer
electricity prices,
April-June 2014

decrease in price energy

companies paid for coal,
April-June 2014

decrease in price energy

companies paid for gas,
April-June 2014

ernment Minister, in 50 renewable

energy projects that critics say local
planners should have been allowed
to determine.
The focus on affordability is inevitable and efforts to cut the cost
of renewable energy are to be welcomed, Mr Slark says, but it becomes counter-productive when it
leads to sudden changes in policy
that are not signalled in advance.
That unsettles investors. Without
clarity on how policy is going to
evolve, investments get put off or
become more expensive.
Juliet Davenport, founder and
chief executive of Good Energy and
member of the British Wind partnership, agrees that regulatory stability is
essential for long-term planning. If
long-term investment and economic
growth in renewables is to thrive, the
market must have stability. Political
volatility and policy uncertainty of the
kind were currently seeing serves only
to put all this in jeopardy, she says.

Even though the government has

cut support payments for renewable
energy projects, it has been careful
not to apply cuts retrospectively to
existing projects, as countries such
as Spain and Italy have done.
In introducing the Electricity
Market Reform, its showcase energy policy, it has stuck reasonably well to the timetable and has
given plenty of notice of changes
to renewables support, says Climate Change Capitals Mr Temperton. You cant expect to have an
open-ended subsidy regime, especially in the current age of austerity.
The government had to get to grips
with costs, but it made a point of
not affecting existing investments.
Investment is also affected by
events outside of the governments
control, such as the Scottish independence referendum, which
put a brake on the development of
manyprojects.
Independence would have been
cataclysmic for a number of years,
says Peter Dickson, technical director at Glenmont Partners. There
would have been effectively a moratorium on investment. Fiscal policy in Scotland was up in the air and
we were very concerned about what
the cost of lending would have been.
Currency, fiscal and price issues are
much more certain now.
Ultimately, says Mr Slark, the
influence of politics on the energy
sector is nothing new. Energy is
so critical to everyones daily lives
that it would be naive to think that
politics would not play a major role
init.

Source: Energy Voice

Peter Atherton, utilities analyst at

Liberum. One of the ideas behind
privatisation in the 1980s was to
take the politics out of the sector,
he says.
ENERGY TRILEMMA

Image: Getty

nergy has always been the

most political of industrial
sectors, stretching back to
the days when OPEC (Organisation
of Petroleum Exporting Countries)
imposed an oil embargo in the 1970s
that quadrupled the price of oil and
had ramifications around the world.
Dale Vince, founder of green
energy retailer Ecotricity, says
party politics are still having a
fundamental impact on the energy market. The Tories are clearly
the party of fossil and nuclear fuel.
Having moved to shut down the
solar and wind industries through
a mixture of rapid and repeated financial cuts, and adverse movement
in planning regulations. In contrast,
theyve signed up to 35 years of nuclear support at twice the price of
onshore wind and cut planning
regulations for fracking and offered
the most generous tax regime in the
world, he says.

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Commercial
Commercial Feature
Feature

TO THE LEFT AND RIGHT

OF ENERGY POLICY

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On the other hand, the Lib Dems

and Labour clearly support renewable energy, and are perhaps less
clear on nuclear and fracking. But
the real hand grenade in the room
came from Ed Milliband when he
promised to freeze energy prices
for 20 months if elected. It caused
the Tories to make a hasty response
which centred on blaming green
crap for the rise in bills and promising a 12 per household reduction in
energy bills paid for by central government. A more naked pre-election
bribe perhaps never existed.
The decisions made in the next
year or two are fundamental to
our future economy and cost of
living. Politics is the primary driver of those decisions now, for good
orbad.
Politics and energy policy are
totally intertwined because energy is the commodity on which the
rest of the economy works, says

Former Environment
Secretary Owen
Paterson was
considered to be
a climate change
sceptic

But given the conflicting demands

of the energy trilemma the need
to keep the lights on, keep energy
bills affordable and decarbonise the
energy sector that was always a
forlorn hope. Anything to do with
energy and climate change is intertwined with politics and that is just
life, says Ian Temperton, head of
advisory at Climate Change Capital.
The issue of affordability is driving the debate at the moment and
this has led to a clear step back in
ambition for renewable energy and
low carbon projects, says Richard
Slark, director of renewables at energy consultancy Poyry.
A clear bias in the Conservative
Party against renewable energy
has emerged over the course of this
government, evidenced by the appointment of climate change sceptic Owen Paterson as Environment
Secretary, who has since moved on,
and the intervention by Eric Pickles,
the Communities and Local Gov-

The issue of
affordability is driving
the debate at the
moment and this has
led to a clear step
back in ambition on
renewable energy and
carbon targets

EVEN-HANDED VOLATILITY

It is not just renewables that are

subject to this volatility. In 2011,
the North Sea oil and gas sector was
stunned by a 2-billion windfall tax;
however, tax breaks for the industry followed a year later, along with
a new bareboat chartering tax and
an exploration tax break in 2014.
But some experts say the UK government does not deserve all the
criticism it has received. It is very
easy to criticise the government, but
I commend it for the way it has acted, says Antony Skinner, an energy
lawyer at Ashurst. It has implemented policies slightly more slowly and it created a bit more uncertainty than many would have liked,
but on the whole, the decisions have
been correct.

Hydrogen is an intelligent
energy choice
Energy security and access to affordable power is essential to
the functioning of modern economies, but meeting the worlds
growing need for energy will require more than $48 trillion in
investment over the next two decades

One of the most promising routes

to accessing a reliable source of
energy supply, which is already
delivering, is the use of hydrogen,
the most abundant element in
the Universe.
It can be produced by the electrolysis
of water using electrical energy
supplied by renewable electricity
sources, such as wind and solar, or by
reforming natural gas.
The oil and gas industries are
already high-volume global producers
of hydrogen for the upgrade of heavy
crude oils into refined, cleaner fuels.
Once produced, hydrogen can be stored
for future use. For example, it can be
co-mingled into the existing gas grid or
used directly in fuel cell electric vehicles
(FCEVs) and consumer devices.
Hydrogen may be the only
alternative fuel that can significantly
reduce greenhouse gas and pollution
emission levels, says Dr Henri Winand,
chief executive at Intelligent Energy.
Hydrogen and fuel cells combined
into a highly efficient power source is
not a new concept. It has been used
extensively in industrial applications
and international space programmes for
the last 40 years. The rockets on the US
Apollo missions were fuelled by hydrogen,
and the fuel cells on board powered the
electronics and provided critical life

Intelligent Energys hydrogen fuel

cell black cab

support to the crew. Weve gone to the

Moon and back using hydrogen; the trick
is to make it available for all and that is
what we aim to do at Intelligent Energy,
says Dr Winand.
Hydrogen is very versatile and can be
utilised to make many of the products
we see today. Hydrogen is used, for
example, to heat metals, in glass
making, healthcare and in the electronics
industry. One of the key factors that has
spurred a sharp rise in the interest in
hydrogen as a new energy vector is the
need to meet economic growth in the
developing world.
Focusing on India, which harbours
17.5 per cent of the worlds population,
Dr Winand says: We are seeing a growing need for an efficient, affordable and
rapidly deployable energy supply to feed
this growth and to power the infrastructure that goes with it. A key case in point
is providing reliable energy to power the
data telecommunications networks.
The unreliable electricity grid in
India means that 70 per cent of its
cell towers are subject to eight hours
or more of power outage per day. We
estimate that the increased use of
diesel generators to back up its poor
electricity grid uses approximately 2.6
billion litres of diesel annually. This
contributes to seven million additional
metric tonnes of CO2 emissions.

In offering a solution, Dr Winand

describes how Intelligent Energy
operates at the edge of the grid,
providing power for distributed
infrastructure in emerging markets.
We provide long-term contracts,
typically eight to fifteen years, for
power provision to cell-tower operators.
Cell-tower sites with backup diesel
generators are upgraded and then
replaced by highly efficient hydrogen
fuel cells, he says.
This insatiable need for power,
in the wake of economic growth and
urbanisation, does not have to be
at the expense of the environment.
Cities and their inhabitants presently
account for 67 per cent of global
energy consumption and 70 per cent
of greenhouse gas emissions. Over
the next 20 years, these urban zones
will be where most of the worlds
population growth will occur. The
increased use of fossil fuels also brings
increased air pollution, which currently
kills seven million people a year as a
result of exposure more than any
infectious disease.
So with this very real need to
reduce global pollution, the automotive
industry is also embracing the need
to change its behaviour. One way it
is attempting to address this is to
significantly re-engineer the traditional
internal combustion engine to reduce
emissions. However, there is a need
for a cleaner, more commercially viable
alternative and many of the worlds
leading car manufacturers have publicly
stated their goal to commercialise fuel
cell powered vehicles within the next
decade. Indeed, Toyota recently
announced that their FCEV,
following its initial launch
in Japan, will be available
next year in the United
States, Germany, Denmark
and the UK.

Fuel cell electric vehicles are

viewed as a highly efficient alternative
to the internal combustion engine.
They offer a practical driving range,
do not compromise on performance,
take minutes to refuel and produce no
harmful emissions at the exhaust pipe,
only water vapour, says Dr Winand.

We will see this fuel

percolate into every
aspect of our lives,
down to powering our mobile
phones and laptops
Our customers include some
of the worlds leading automotive
manufacturers, and we provide the
technology and knowledge to make fuel
cell electric vehicles a reality. Toyota,
Honda and Hyundai have announced
series production of FCEVs in the 20152020 timeframe and hydrogen refueling
stations are under deployment.
It is not just the telecommunication
and automobile industries that are
realising the huge potential of hydrogen.
Dr Winand is confident that we will see
this fuel percolate into every aspect of
our lives, down to powering our mobile
phones and laptops.
Digital consumer devices account for
up to a fifth of total power consumption.
However, the losses associated with
converting alternating current (AC) from
the mains wall socket to direct current
(DC) for electronic devices is estimated
to waste over a trillion kilowatt-hours
of energy globally every year. Smart
DC networks and hydrogen fuel-cell
technology, which generates direct
current from hydrogen with no AC to
DC conversion, can produce a far more
efficient mobile solution to powering our
everyday lives.
Since 2000, we have seen a sharp
rise in DC energy consumption. Fuel
cells provide direct current (DC) for
digital devices using highly efficient off-

UppTM, the hydrogen fuel cell

providing power to smartphones

grid means. We are looking at innovative

ways we can power our personal
consumer electronics, which will reduce
energy lost during the conversion step.
One way we are exploring this is with
our UppTM personal energy device,
which provides smartphone users with
a weeks worth of energy in a hydrogen
fuel cell, says Dr Winand.
It is clear there is a global need
for highly distributed, efficient power
generation and not just in the developing
world. There is already a big market for
hydrogen. Intelligent Energy capitalises
on this growth through its proprietary
technology, large and growing customer
base, and its tailored business model to
deliver at scale.

For more information please visit

www.intelligent-energy.com

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UK Energy Mix

80GW 60GW 10bn

A NEW MIX TO 
KEEP LIGHTS ON

installed UK energycapacity

Source: National Grid

Tomorrows energy market will be the polar opposite of

our historical centralised distribution, but we must plan
for the future with a clear vision of how innovation and
system integration will transform the UKs energy mix,
writes Felicia Jackson

ransitioning the UKs electricity supply to accommodate a

lower carbon emission environment is going to have a significant
impact on its future generation mix
a greater use of renewables, nuclear,
gas for generation, carbon capture for
existing coal-fired stations and more.
Simon Reader, head of corporate
communications at RES, says: The
Large Combustion Plant Directive
(LCPD) will see a reduction of 13 per
cent in coal-fired generation before
2020, with an almost total phase out
of coal after 2030, other than the
more expensive route of new coal
plants fitted with carbon capture and
storage technology. This will mean
an increasingly dominant role for renewables. In its Gone Green projections to 2035, for example, National
Grid suggests that renewable generation could reach 100 gigawatts (GW)
by 2030.
How that will impact the energy mix,
however, remains down to the policy
environment. Contracts for difference long-term contracts to provide
stable and predictable incentives for
companies to invest in low-carbon
generation will have a clear impact
on the uptake of nuclear and renewables, with the biggest impact seen from
2025 onwards.

With householders
able to make up to
12 per cent return
on investment on residential
solar, its moving from niche
to mainstream
Matt Germain, associate director
in the environment group of international law firm Osborne Clarke, says
the contribution of on and offshore
wind and solar can be predictably forecast; a bit like nuclear if the new fleet
is built up. Contributions from energy
from waste and on-farm anaerobic digestions are harder to predict, yet both
can provide a decentralised source of
base-load power.

Distributed energy, especially residential solar, could also potentially be

a game changer. Ian Thomas, managing
director at Turquoise International,
points out: There is a societal change
where people want to control their energy usage; there is a growing interest
in distributed generation of all kinds,
he says.
And as Toby Ferenzci, founder of
home energy service provider Hanergy UK, says with householders able
to make up to 12 per cent return on
investment on residential solar, its
moving from niche to mainstream.
NEW LIFESTYLES

Efficiency, both industrial and domestic, will have an impact on demand and the energy mix. Mr Reader
says: Once if the poor participation
in the governments efficiency programmes are overcome, then further
increases will largely depend on the
adoption of new lifestyles, for example
self-consumption using PV [photovoltaic solar panels] and new policies,
such as those that support residential
battery storage combined with PV, as is
the case in Germany.
It is efficiency in combination with
demand response that has the greatest
potential to impact the energy mix, by
manipulating load to match demand.
The implementation of smart meters
and smart grid enable more active local
networks, which also impacts market
structure.
David Hill, business development
director of Open Energi, says: Other
new technologies, such as active network management systems and new
electricity storage techniques, are also
facilitating an entirely different way to
balance supply and demand, where demand can be as flexible as generation.
The introduction of the capacity
market should encourage the development of demand response especially where it is allowed to compete
on a level playing field with traditional
generation.
Yet its possible that demand response operators will not be able to participate in the December 2014 capacity
market auction, only in subsequent
2015 and 2016 auctions, for a capped

peak demand in the UK, but the

government has estimated this
could increase six-fold by 2050
Source: DECC

annual savings in the UK by 2050

from energy storage technologies
Source: Imperial College London, Energy Futures Lab

Power Stations of the Future

LANDFILL GAS TO ENERGY

400-900 megawatt
(MW ) volume.
This assumes
that demand
response will
contribute
just 1 per cent
of peak demand,
with no prospect of this increasing any
time soon,
as generators
will have a 15-year
hold on capacity contracts.
The biggest question though is
the future role of energy storage.
Given the intermittent nature of
many renewable sources, demand
for grid-scale energy storage is
growing rapidly. Storage supports
the grid in terms of avoided wind
curtailment and infrastructure upgrades, reduced reserve power and
CO2 from open-cycle gas turbines,
and in absorbing reactive power.

Where's
the money?
Page 08
At the moment the UK has just
2.8GW of grid-scale storage at four
sites, all of it pumped hydro and the
most recent of which was built more
than 30 years ago. As such, the UK
has 2GW less storage than it needs
now and is expected to have a 6GW
deficit by 2020. One of the challenges is the difficulty in comparing
different types of energy storage.
There are a broad range of available technologies, with different
sizes targeting different markets,
from power management, large
scale, micro and so on, ranging from
flywheels, batteries, compressed air,
pumped storage and power-hydrogen storage.
The use of a chemical storage
solution, such as hydrogen, offers a
very viable and practical option for
mass energy storage, says Dr Hen-

ri Winand,
chief
executive
of
Intelligent
Energy.
When renewable
energy is converted
to hydrogen, using
electrolysis, it can be
used and stored in a
number of ways. For instance, it can be co-mingled into the
existing natural gas infrastructure
as a method of storage and transportation for when energy is needed most. Gas-fired power stations
could also use this natural gas/hydrogen feedstock directly for energy
production using upgraded turbine
combustion technology for gas-topower re-electrification.
The problem is there is no real
strategy for storage in the UK. In
Belgium, demand and generation
are treated as equivalent technologies, which would need to happen
in the UK for demand response to
operate at a significant grid scale.
As Turquoise Internationals Mr
Thomas points out, at grid scale, the
system is not set up for storage. In
the UK, the electricity supply chain
has been disaggregated, meaning no
one company can take full advantage of synergies across the supply
chain. Without a strategy, it is difficult to plan for a developing market.
The UK is set to lose some of
its old generators and that power
must be replaced, but the challenge
lies in how. Tomorrows energy
market will be the polar opposite
of our historical centralised distribution it will be bi-directional,
flexible, potentially distributed and
clearly varied.
To ensure the UK makes the most
of the opportunity, we must plan
for the future and that means more
than 1 per cent peaking demand for
demand response. Its time for vision and a clear path on how innovation and system integration will
transform the UKs energy mix.

In an industry first, Cleanergys

GasBox has been developed to
generate electricity and heat
from methane gas being emitted
at the more than 1,900 landfill
sites in Europe which are over ten
yearsold.
The European Union Landfill Directive of 1999 states that flaring is
only an option if it is impossible to
extract energy from the methane
gas. But until now, older landfill
sites have often broken these
directives because the gas combustion engines traditionally used
at newer landfills, where methane

levels are above 40 per cent, simply cannot produce electricity from
lower-grade, dirty methane.
Cleanergys GasBox addresses this
problem and is the only technology
able to produce both electricity and
heat from a methane gas concentration as low as 18 per cent. This
biogas is produced from manure,
food waste and plant residues at
landfill sites as well as at waste
water plants and on farms.
The technology has been installed
at closed landfill sites in the UK at
Norfolk, Shropshire and Yorkshire,
and also in Poland.

VIRTUAL POWER PLANT

The worlds largest manufacturer
and leading supplier of steel ArcelorMittal has partnered with demand
response aggregator REstore to
return up to 150 megawatts (MW)
of power to the transmission grid at
peak times. The company creates
a 150MW virtual power plant by
decreasing its energy demand.
REstore relieves pressure on the
grid in real-time by helping consumers curtail their power demand. In
turn, consumers receive significant
payments for their ability to reduce
power. REstore currently has the
equivalent of a virtual gas power
plant with approximately 1 gigawatt

HINKLEY POINT C
EDF Energys Hinkley Point C is
going to be a 3.2GW nuclear power
plant, with two EPR water-pressure
reactors, expected to generate 7 per
cent of UK electricity or enough for
more than five million homes. The
reactors will be the first two of four
planned by EDF, with two more due
at Sizewell.
The technology used at Hinkley Point
C will be based on the European
pressurised water reactor (EPR)
design, which is a third-generation
improvement, with increased safety
and better economic competitiveness. Using 17 per cent less uranium

than existing reactors for each unit

of electricity generated, means a corresponding reduction in spent fuel.
EDF Energy has also teamed up with
British engineering company Doosan
Babcock to extend the life of its existing advanced gas-cooled reactor
fleet, at Dungeness B, Hinkley Point
B, Hunterston B, Hartlepool, Heysham 1, Heysham 2 and Torness,
under a Lifetime Enterprise Agreement (LEA). Together, these stations
generate 7,550MW about a sixth of
UK electricity and the LEA will keep
them producing up to, and in some
cases beyond, 2023.

(GW) of peak-load energy under

management.
Given that ArcelorMittal globally
consumes approximately the same
amount of gas and electricity as
the entire country of Austria or 25
per cent of total annual energy
consumption in the UK, increasing
its ability to manage electricity
consumption could prove transformational.
To do this, ArcelorMittal set up an internal business unit in 2011, called
ArcelorMittal Energy SCA, to focus
on energy optimisation and energy
trading in its manufacturing plants
across Europe.

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Funding

LONG-TERM AGREEMENTS

While the role of utilities in direct

investment has diminished as their
balance sheets continue to shrink,
they are nonetheless a crucial part
of the market because they provide
long-term power purchase agreements to developers, giving them
the security of stable cash flow returns and helping them to raise the
money needed to invest in projects.
And there is a major new player
on the scene the UK Green Investment Bank (GIB). The bank

CHINA

10%

42%

$226.7

$3.200

$249.5 $214.4

TOTAL TRANSACTIONS
$34.7

$53.4

$39.7

$35.8

$102.4

$1.041

$114.8

$86.4

MIDDLE EAST
& AFRICA

37%

$48.4

$36.7

INDIA

$51.9

$59.6

21%

$56.3

$285.2 $352.8 $309.9 $268.2

42%

$40.2

TRANSPORT
Passenger cars
Other road

BRAZIL

$4.3 $3.2 $10.4 $9

21%

M&A
transactions

$8.7 $12.6 $7.2 $6.1

$455

$32.9

$284

INDUSTRY
Non-energy intensive

$279.4

$7.7$ $9.7 $6.8 $3.1

$29.8

Energy intensive
$432

$48.8

$1.293

EUROPE

23%

$39.9

UNITED STATES

21%

$1.296

BUILDINGS
Services
Residentials

COAL
Transport

Distribution

TOTAL
$40.165bn

Mining

Fossil-fuel plants

OIL

Nuclear

Refining

Renewables

Transport
Upstream

BIO FUELS

$5.857

$1.401

EQUIPMENT
MANUFACTURING

$298

Transmission and distribution

Private equity
expansion capital
$3.1

$736

GAS
LNG

$320

$6.138

$736

Upstream

$1.897

Source: OECD/IEA 2014

$18.7
$11.5

$144.2 $180.3 $154.2 $133.4

$1.061

$986

21%

TECHNOLOGY
DEVELOPMENT

$2.6

$1.7

Venture capital
$2.5

$2.5

17%

$1.4
9%

$2.4

$0.8

Public
markets
$11.4

$10.7

51%

$3.7

Government R&D
$4.6

$4.6

$11.1
10%

$4.5

$4.6

Corporate R&D
$4.2

$5.1

4%

$5

$4.7

Project
acquisition &
refinancing
25%

POWER
Transmission

2004-13 CAGR

Assset finance

PROJECTS

2013

$7.9

$2.635

2012

19%

$5.030

2011

Corporate
M&A

$11.284

2010

19%

$1.787

New investment by
value chain (BN)

$4.9

Global energy supply

investment by type,
2014-35

$0.2
$0.4
$1.7

Energy funding is splitting into

two distinct types, says Richard
Goodfellow, head of energy at Addleshaw Goddard. First is the
large-scale funding for infrastructure, such as power stations, where
traditional forms of finance will still
dominate, with some innovative
twists such as Infrastructure UK
[Treasury] guarantees. These guarantees will help certain projects to
secure funding by using the governments balance sheet to underwrite
them if commercial backers do not
come forward.
Among projects set to benefit
from the scheme are EDFs new
nuclear power station at Hinkley
Point, a number of gas-fired power plants, a wind farm in the Forth
Estuary and a biomass generation
plant in Bristol.
While the government is looking
to encourage more private-sector
capital to invest in energy projects,
increasingly the very largest projects, such as nuclear power and
offshore wind farms, are only being
funded by state actors, including the
mainly French-government-owned
EDF, Chinese state-owned companies, the Danish energy utility
DONG and its Norwegian counterpart Statkraft, both of which
are government-backed, says Ian
Temperton, head of advisory at the
investor Climate Change Capital.
The second type of project is at
a more local and business level as
the energy system becomes more
decentralised and decarbonised,

NEW INVESTEMENT

Public
markets
investor exits

FUNDING GUARANTEES

Total investments
(BN)

-3%

he world needs a whole lot

of energy infrastructure to
be built over the next few
decades. In the UK alone, the government estimates 100 billion must be
spent by the end of the decade, while
the European Union says 200 billion must be spent just on interconnectors to link the different markets
of the EU to each other to enable a
single European energy market.
Much of this funding will continue to come from traditional
sources, such as utilities, banks and
institutional investors, but a growing proportion will come from less
conventional sources, ranging from
crowdfunding to yield companies
and green bonds.
Traditional investors will continue to play a dominant role in funding
renewable energy projects in the UK,
particularly in the wind, solar and
biomass sectors. However, newer
forms of funding add an interesting
dynamic to the market and there are
enough opportunities for all parties
to participate, says Vivian Nicoli, a
partner at Eiser Infrastructure.
Commercial banks will continue
to figure in the financing of largescale renewables projects, agrees
Rinku Bhadoria, a partner in the
energy and infrastructure group at
King & Wood Mallesons SJ Berwin.
Importantly, they have the experience and capability to take construction risk for well-structured
large-scale projects, she says.

2013

2004-13 CAGR

TOTAL
$8,002bn

Aviation, navigation and rail

2012

$1.9
$3.2
$3.2
$0.6

New channels of finance

are opening up in the
energy sector alongside
traditional funding routes,
as Mike Scott discovers

was launched in 2012 as the first investment bank worldwide to invest

solely in green infrastructure projects, which would otherwise lack
funding because of their risk profile.
The government gave the GIB 3.8
billion to invest, but it is prevented
from raising money on the capital
markets until the government has
brought the deficit under control.
Given that there is little prospect
of this at the moment, many people
think the GIB, which has so far invested 1.4 billion, is unable to realise its full potential. However, says
Ms Bhadoria, it has recently won
state aid approval from the European
Commission, allowing it to manage
and co-invest alongside private capital. This has led to plans to launch a
1-billion offshore wind fund to buy
operational wind assets, giving the
sector a much needed boost.

Global energy supply

investment by enduser sector, 2014-35

New investment
bygeography (BN)

2011

Private equity
buy-outs

WHERE'S
THE MONEY?

FINANCING
GLOBAL ENERGY

2010

Source: UNEP, Bloomberg New Energy Finance

Mr Goodfellow says. Alongside

new money from pension funds,
you have the GIB and allied funds
which are very active in the market.
Balance sheet businesses are also
much more likely to take control of
their own energy destiny, he says.
However, many large investors

There have been a number of

innovative new mechanisms that
have helped to channel funds to
renewable energy projects in particular

are holding off making large investment commitments until after next
years general election because of
the growing belief that energy policy
has become too political. The key
lesson to learn from other countries
is to rebuild the political consensus
on energy, says Mr Goodfellow.
You cannot expect large-scale investment if you are reforming the
system itself and a bipartisan approach has broken down.
In addition, the governments
Electricity Market Reform, although
welcomed by many investors, will

add an element of uncertainty until

new features, such as contracts for
difference and the capacity mechanism, are bedded in and the market
sees how they work in practice.
There have been a number of innovative new mechanisms that have
helped to channel funds to renewable energy projects in particular. It
was hoped that the EU Emissions
Trading Scheme would provide a big
boost to the clean energy sector by
making high-carbon projects more
expensive, but the carbon price has
been too low as a result of political

interference and the financial crisis.

A more encouraging development has been the emergence of the
green bond market. Green bonds
are debt instruments in which the
money raised is ring-fenced for climate-friendly projects, such as wind
farms, solar parks or energy efficiency measures. The market is growing
at a startling rate; it is expected to
top $40 billion this year, up from
$11 billion in 2013, and according
to the Climate Bonds Initiative,
$100 billion of green bonds will be
issued next year. This is still a small

fraction of the global bond market,

which is around $80 trillion, but
if growth continues at the current
rate, it could soon become a significant asset class in its own right.
There is every chance of this happening given that at the recent UN
Climate Summit in New York, investors with $2 trillion of assets under
management, including Zurich Insurance and Aviva Investors, committed to help grow the market. One
of the signatories, Barclays Bank,
announced plans to issue 1 billion
of green bonds in the next year.

Another new instrument makes

use of the equity markets rather
than the bond markets. Yieldcos
are organisations that raise money
by listing on stock markets and use
it to invest in renewable energy projects, paying investors dividends out
of the income earned by generating
power. Many project developers list
yieldcos, sell their projects to them
and use the proceeds to invest in
new developments.
Yieldcos and green bonds are not
mutually exclusive. Abengoa, the
Spanish energy company, has re-

cently issued a 500-million green

bond, and also sold two solar plants
and a wind farm to its yieldco.
Crowdfunding is another phenomenon that has shaken up energy investment and it has significant
potential to become an established
form of financing for small-scale
renewables projects for two reasons, says Ms Bhadoria. Firstly, it
provides another source of capital
for funding energy projects and
promoting more competition, by allowing startups and medium-sized
players a route to market alongside

the more dominant players. Secondly, it empowers local communities to engage directly with the
issues they face regarding energy
supply and demand, she says.
The UK crowdfunding market
is growing fast, but remains in its
infancy. However, the potential is
shown by the German market, where
54 billion has been raised since
2005 from crowdfunding platforms,
meaning that 50 per cent of Germanys renewables capacity is now
community owned as a result.

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Interview

Commercial Feature
Commercial Feature

From the Continental Shelf

to the high street

UK IS ON COURSE TO
MEET ENERGY TARGETS

What connects the Continental Shelf, some 150km off the

coast of Lincolnshire, with new apprenticeships in Fife or
money being rung through shop tills in Hartlepool? The answer
is gas; in particular, the Cygnus field, operated by GDF SUEZ
E&P UK with partners Centrica Energy and Bayerngas UK
Studies for Oil & Gas UK mapping
the supply chain of the sector as a
whole have shown it to be a 35-billion industry, supporting some
450,000 jobs in total across the UK.
It is this large and long economic
reach that is linking platforms offshore, suppliers on land, individuals
in employment and the local retail
outlets in which they spend their
disposable income.
In the case of the Cygnus field, even
before the actual gas first starts flowing
towards the end of 2015, the economic benefits of the project are already
streaming through the supply chain to
UK businesses and their communities,
with more opportunity in the procurement pipeline.
In terms of energy generation alone,
the Cygnus project is a big story, representing the UKs largest Southern gas
field discovery for 25 years. At peak
output, Cygnus will produce enough
gas to meet the demand of 1.5 million
homes, yet these numbers tell only part
of the tale.
According to a report by leading consultancy Oxford Economics, the Cygnus
project will add a total of 1.29 billion
to the UK economy and support more
than 4,820 skilled jobs during its fiveyear construction period. The initial
success of the scheme is immediately
manifested throughout the extensive
supply chain during project lead-in time,
according to Adrian Cooper, chief executive of Oxford Economics.
The Cygnus North Sea project is already supporting valuable income and

employment opportunities in the North

East, in Scotland and throughout the
UK, even though the gas production process itself has yet to start. The benefits
are being felt not just by those directly
involved in the design and build of the
required infrastructure, but also by suppliers of goods and services of all kinds
to those contractors in turn, he says.
Providing a geographic breakdown of
revenue and employment benefits, the
report has catalogued a range of positive economic impacts:
 In Scotland, where a topside,
supporting structures and subsea infrastructure are being built
in Fife and Invergordon, 323
million will be generated in the
economy, securing 1,450 jobs
including 15 apprenticeships at
yards in Fife;
 Across the North-East coast,
direct and indirect effects of
the Cygnus project will bring
nearly 90 million to the local
economy and more than 400
jobs, with particular benefit to
be felt in Hartlepool, where the
contract for three platforms
constitutes the third consecutive offshore project for Centrica
Energy won by the town;
 Investment in offshore operations, including transporting and
installing the infrastructure for
the Cygnus field, and bringing it
into production, will boost revenues further by almost 225
million and employment opportunities by nearly 300; plus

The Cygnus North Sea project is

already supporting valuable income
and employment opportunities in
the North East, in Scotland and throughout
the UK, even though the gas production
process itself has yet to start

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that the UK was third lowest in

renewable energy generation of 28
European countries and a long way
off reaching its 15 per cent renewable energy target by 2020?
The UK is on 4.2 per cent renewables, just ahead of Malta and
Luxembourg.
FUTURE IMPACT

ECONOMIC CONTRIBUTION OF
CYGNUS PROJECT IN THE UK
SCOTLAND
322.9m
1,450 JOBS

NORTH EAST
89.4m

410 JOBS

REST OF THE UK
315.8m
1,540 JOBS

UK OFFSHORE
224m
290 JOBS

LONDON
342.5m
1,120 JOBS

Above: The Ensco

80 drilling rig over
the Cygnus Alpha
wellhead platform

 Across the rest of the UK, the

overall spending of people employed by the Cygnus partners
and contractors will support
some 1,540 additional jobs,
adding 315.8 million to the
nations economy.
The cascading benefit of the
scheme to domestic industry represents a win-win scenario for Cygnus
and its UK supply chain, says Ruud
Zoon, managing director, GDF SUEZ
E&P UK Ltd. As operator of the Cygnus field, we are very pleased with
the success of UK-based companies
in securing over 80 per cent of the
contract work in competitive tender.
This is testament to the technical
and commercial excellence of the UK
supply chain. Good progress is being made with the 2014 installation
campaign now complete and drilling
under way, he says.
For Colette Cohen, senior vice-president for the UK and the Netherlands
at Centrica Energy, the research study
captures the extended supply-chain
value of the project. This report un-

derlines how significant an impact the

Cygnus project is having across the UK
both in terms of investment and jobs,
as well as strengthening our security of
gas supply. This is a great example of
what can be achieved when we invest
in skilled people across the UK, creating thriving energy coasts and securing
gas for the UK, she says.
Bayerngas UK managing director
Gerry Harrison adds: This report highlights the significance of our oil and
gas industry, and its effective relationship with the UK supply chain. We
are delighted to be part of the Cygnus
project and will continue to invest, with
our partners, in other opportunities offshore UK.
On a programme of the scale and
duration of Cygnus, the roll-call of professional and trade inputs ranges from
design and engineering, through procurement and construction, to fabrication and commissioning of everything
from platform topsides, bridges and
flare towers, to jackets and piles, export pipelines and subsea structures.
The Cygnus project is led by opera-

tor GDF SUEZ E&P UK with a 38.75 per

cent interest, plus partners Centrica
Energy (48.75 per cent) and Bayerngas (12.5 per cent). The development
was sanctioned in 2012, following the
UK governments decision to introduce
allowances for new large gas fields in
shallow water, which provided project
partners with the certainty and confidence to go ahead.
Big projects typically require big
players and Cygnus is no exception.
GDF SUEZ, through its subsidiary GDF
SUEZ E&P UK Ltd is an increasingly
significant name in oil and gas exploration and production in the UK Continental Shelf. Since entering the region
in 1997, the company has built up a
substantial portfolio of assets in the
Central and Southern North Sea, and
West of Shetland, comprising more
than 50 licences.
Major partner Centrica is a top 30
FTSE 100 energy company with a
growing exploration and production
business, including operations in the
UK and Netherlands, Norway and
Western Canada.

Image: Getty

Energy Secretary Ed Davey (pictured) gives

Raymond Snoddy an optimistic progress report
on his Cabinet portfolio

nlike most politicians Ed

Davey, Secretary of State
for Energy and Climate
Change, can describe the challenges he faces in two well-used words
energy trilemma. They accurately sum up the often contradictory issues that have to be tackled. It
means one of the few Liberal Democrat Cabinet ministers in the UKs
Conservative-led coalition has to
keep the lights on, provide affordable energy, while still meeting climate-change targets.
Its particularly difficult for the
UK because if we do nothing at all,
we will still have to replace a lot of
electricity generation and networks
coming to the end of their natural
life, Mr Davey accepts. He was catapulted into the trilemma hot seat
20 months ago when his Lib-Dem

predecessor Chris Huhne was prosecuted for perverting the course of

justice over a speeding case.
Given the complexities of his trilemma, Mr Davey is surprisingly optimistic about the future, and how he
and the Government are doing so far.
I think we are doing exceptionally well, actually, in most areas,
insists the Secretary of State, who
points out that 45 billion has been
invested in electricity generation
over four years, more than transport, water and telecommunications
combined, with more to come.
As he talks, Mr Davey, who won a
bravery award for saving the life of a
woman in a railway incident, displays
not just optimism, but the ability to
find a sunny side to every cloud.
Didnt the European Commissions statistical body recently find

Thats historical, thats historical. I think thats changing, its

changing fast, replies Mr Davey,
who explains that a lot of the investment is front-loaded and will have
greater future impact.
He points out that transport and
heat are included, areas where we
are making slightly less progress
for a variety of reasons. A 30 per
cent target has been set for electricity and that will be more than met,
hebelieves.
I am pretty sure we will meet the
2020 target partly because we have
been so successful in renewable
electricity, says Mr Davey.
Doesnt the fact that, despite hundreds of new turbines being built,
power produced by wind farms
fell by a fifth in the second quarter
of this year because of low wind
speeds, raise questions?
I disagree. We always knew
winds would blow strongly at different times of year. In January nearly
20 per cent was coming from wind,
a record. People forget you dont pay
for the windmills zero unless
they are producing electricity, Mr
Davey explains.
The reduction in feed-in tariffs for solar panels surely cant
havehelped?
The truth is we are all learning
in this space and the question is do
you learn in a way that encourages
or hinders investment, he says,
claiming a 60 per cent increase in
solar energy generated.
The UK honoured existing contracts, unlike Spain or Romania, and
moved on to produce a predictable
system where tariffs go down as deployments rise.
Guess what it has been really
successful. You know what? No one
reported that. But they reported it
when we were having problems,
says Mr Davey with passion.
But wasnt launching the Green
Deal to finance home energy efficiency and then closing it in July when
the money ran out unfortunate?
The Green Deal has not hit all
our metrics, but it has hit some,
argues the Energy Secretary, who

believes many of the more than

325,000 who had Green Deal home
assessments will pay for improvements themselves or be helped by
the big energy companies.
Is he worried UK lights could go
out either because of political wrangling over energy prices or a lack of
investment, as some senior energy
industry executives have warned?
I am as sure as I possibly can be
that this wont happen, insists Mr
Davey, who has powers under existing legislation to call on supplementary reserves from moth-balled
power stations.
I think that takes us very powerfully through the next two winters,
adds the politician, who believes that
even if England had won the World
Cup in Brazil on penalties there
would have still been enough electricity to power the millions of kettles put on to make tea afterwards.
POLITICAL BATTLES

Mr Davey also faces the difficulty

of being a Lib Dem in a Conservative-led government with reports
of battles with Chancellor George
Osborne over budgets and carbon
targets, and even more public spats
with Communities Secretary Eric
Pickles over calling in around 50
onshore wind-farm applications,
despite many having local authority approval.
The Energy Secretary saw off
attempts by Mr Osborne to water
down the UKs legally binding obligation to reduce emissions by 80 per
cent on 1990 levels by 2050.
The battle with Mr Pickles over
the future of on-shore wind farms
continues. While Mr Davey believes
the Communities Secretary has the
power to act as he has, there could
be further legal challenges from the
industry to see whether he has gone
too far.
As a Lib Dem, both Ed Davey and
his party have had to drop their
long-seated opposition to nuclear
power and last year he was able to
announce plans for the first new nuclear plant in a generation, Hinkley
Point C in Somerset.
Partly his concerns were, and
remain, the cost of nuclear. He believes third-generation nuclear is
on the verge of being cost effective
compared with some renewables, although that could change as future
renewable energy costs fall.
The environmental impact of
fracking could also be problematical
for a Lib Dem, but Mr Davey favours

further exploration as long as there

is a regulatory framework in place at
the outset.
You can only persuade people if
you can show that the government
has gone about it in a responsible
way, says the Energy Secretary, who
sees a long-term gain.
CARBON PLAN

As part of the carbon plan for

2050, replacing liquefied natural gas
from Qatar with domestic gas from
fracking could cut prices, increase
energy security and reduce the UKs
carbon footprint.
Mr Davey is optimistic about
the impact of his 2013 Energy Act,
which created the worlds first
low-carbon electricity market.
The Act is one of the things I
am proudest of because it is a very
flexible framework, which you can
adapt to the low-carbon winners of
the future, he says.
The politician, who controversially called climate sceptics diabolical, also has increasingly high
hopes for the United Nations Climate Change Conference in Paris
in December 2015.
He set up a Green Growth Group
of major EU countries, including the
UK, France and Germany, to push
the ambition levels of the European
Commission.
Mr Davey is optimistic that the
proposals, if accepted, would get
close to a European Climate Change
Act at least up to 2030.
I would have liked to go beyond
2030, but you cant swallow the elephant in one go, he says, believing that an early and ambitious
offer from Europe would raise the
bar and put pressure on China,
the US and India to accept more
stretching targets.
Unfortunately, if it happens, Mr
Davey may not be there to see it.
Before Paris he faces his own political trilemma a general election
in a three-party system that could
end coalition government for the
Lib Dems.

Third-generation nuclear is
on the verge of being cost
effective compared with some
renewables, although that could
change as future renewable
energy costs fall

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Solar Power

Future built on talent,

creativity and innovation
The energy sector is under pressure to freshen up its offering to the
next generation of talent says Rhead Group
Image: Getty

Nigel Curry
Chief executive at Rhead Group

The future for power portfolios

worldwide is as exciting as it is
challenging. Global spend on capital projects and infrastructure to
2025 is forecast to hit 78 trillion,
with UK figures alone set to rise by
a staggering 51 per cent.
In order to create value and secure
these projects, the UK must ensure that
it has the environment that delivers:
Programme assurance across
projects; plus
Predictability and value for
money.
The factors driving enhanced performance across projects in the energy sector
are not, however, restricted to traditional
areas of concern for business management, such as risk and cost. The industry
of tomorrow must also be one that:
Competes for talent in a global
marketplace in the STEM disciplines (science, technology,
engineering and mathematics);
Creates, fosters, and even
demands a culture of creativity
and innovation.
Construction is a borderless industry
with resources moving globally across
programme networks. If we are to deliver
the future infrastructure plan, the competition for talent must remain a priority
for the UK, says Nigel Curry, chief executive of leading international programme
management and professional services
consultancy Rhead Group.
Talent, creativity and innovation are
essential requirements in helping to deliver the next generation of programmes
with greater assurance and predictability.
At Rhead Group, we have invested
significantly in attracting and retaining

the best industry talent across the energy, power, defence and infrastructure
sectors, which has supported a high level
of client retention and expansion. Since
our formation 29 years ago, we have
retained our entrepreneurial agility coupled with an increasing strength in depth
and breadth to support some of the most
challenging construction programmes
across the globe.
As a category winner of the Ernst
and Young Award for Midlands Entrepreneur of the Year 2014, Mr Curry is
in the vanguard of project consultancy
professionals helping to drive the business agenda forward. The success of
Rhead Group in responding to current
market trends has also been formally
acknowledged, with receipt of the prestigious Queens Award for Enterprise:
International Trade, in 2014, in recognition of an increase in global business
of 20 per cent.
At Rhead Group, it is this understanding of the industry-wide need to
prioritise development of talent, creativity and innovation that has brought
forward such market-leading initiatives
as the first carbon capture and storage
(CCS) project in the UAE, National Grid
Building Information Modelling (BIM)
Bank, plus a portfolio of talent and
training initiatives.

First Carbon Capture

and Storage project
in UAE

DAZZLING RISE
OF SOLAR ENERGY
Image: Alamy

Above: Carbon
capture and
storage facility in
the United Arab
Emirates

CCS FIRST FOR THE UAE

The Abu Dhabi branch of Rhead Group
was appointed by Abu Dhabi Future Energy Company PJSC Masdar in May 2012
to provide project management consultancy services for its regionally pioneering carbon capture and storage project.
Capturing CO2 for utilisation on an Abu
Dhabi oil field for enhanced oil recovery,
the project is being delivered under an

At Rhead Group, we have

invested significantly
in attracting and retaining the
best industry talent across the
energy, power, defence and
infrastructure sectors

Abu Dhabi National Oil Company and

Masdar joint venture, and comprises
three main elements: a carbon capture
compression and dehydration facility; a
43km pipeline and associated aboveground installations; and a receiving and
transfer station to the reinjection cluster.
The CO2 is a manufacturing by-product from the Emirates Steel Industries
Plant in Mussafah and, once complete,
the project will capture up to 800,000
tonnes of carbon dioxide gas each year.
NATIONAL GRID BIM BANK
National Grids Building Information
Modelling Bank, developed by Rhead
Group, will be a free online, SharePoint
repository of 3D and intelligent 3D models of permanent and temporary works
for use by the transmission supply chain.
Using Network Innovation Allowance
funding, the project is challenging the
current approach of solution mode
engineering. Too often the jump is
made into mechanical, electrical, civil,
control, instrumentation and cathodic
protection detail, with considerations
of cost, time and carbon only coming at
the back-end of the design, too late for
fundamental changes.
By pegging cost and carbon data
to the 3D models, it should be the designers who are able to make informed
economic and environmental decisions
from the very start. The primary objec-

tive of the BIM Bank is to allow project

sponsors and teams to achieve more
consistent, predictable outcomes, at
lower cost and carbon, with increased
stakeholder satisfaction.
TALENT AND TRAINING INITIATIVES
Rhead Group is pioneering a host of
talent and training initiatives, in addition
to graduate, management and leadership programmes, including:
Project Controls Academy,
with Rhead writing the official
specification for training project
controllers, together with the Engineering Construction Industry
Training Board;
Rhead Groups training business, Construction Study Centre, has a wide range of courses
to take delegates from basic to
advanced awareness;
Rugby Players Association project
management awareness and
training, to give players approaching the end of their on-field career an insight into opportunities,
with many professional sports
skills proving transferrable.
BUILDING A SUSTAINABLE
ENERGY FUTURE
These kinds of ground-breaking
schemes and imaginative programmes
are going to prove vital to an energy sec-

800,000

The sun is the source of affordable renewable energy with

the potential to power the entire world, writes Ben Willis

tonnes of Carbon
Dioxide captured
each year once
the project is
complete

tor equipped to power the future, as Mr

Curry concludes: A sustainable energy
future is an absolute requirement for the
UK and poses an exciting challenge for
engineers and project professionals. To
deliver on that goal, the energy sector
as a whole will need to balance its portfolio, considering cost and affordability,
carbon reduction, and security of supply.
Any strategic and systemic approach
to this complex and evolving challenge
is going to require confidence in delivering programmes with greater certainty
and predictability, while demonstrating
increasing levels of efficiency. This will require creative minds and a collaborative
style of working, which challenges norms
and the traditional method of working,
while benefitting from advances in modern technology.
At Rhead Group, we recognise the
importance of this dynamic and have
committed a significant investment
to further enhance our IT and digital platform in addition to our training and development budget. This
additional investment has already
started to benefit our clients and will
continue to support our growth as
a leading independent programme
management consultancy.

For more information

www.rheadgroup.com

ll manner of analogies
invoking explosions or
meteors could be used to
describe the trajectory of solar energy over the past decade. Yet it is
unlikely that any of them would tell
the story of its astonishing progress
quite as vividly as the raw data itself.
According to figures published by
the European Photovoltaic Industry
Association (EPIA), the total solar
photovoltaic (PV) capacity installed
worldwide had grown to nearly 140
gigawatts (GW) last year from a little over 1GW in 2000 more than
10,000 per cent in 13 years. Less
stellar, but still significant, PVs near
relative, solar thermal energy (STE),
hit over 3.4GW of installed capacity
last year after seeing steady growth
since its first installation in 1984.
Both PV and STE are proven
technologies, says Maria van der
Hoeven, executive director of the
International Energy Agency (IEA).
The rapid cost decrease of PV
modules and systems in the last few
years has opened new perspectives
for using solar energy as a major
source of electricity in the coming
years and decades.
HARNESSING SUNS HEAT

The difference between the two

technologies is that PV uses semiconductor materials to convert
sunlight directly into electricity,
whereas STE, also known as concentrated solar power (CSP), harnesses
the suns heat to drive turbines that
generate power. The attraction of

both is that their fuel is the suns

virtually limitless energy, making
them both promising alternatives
to hydrocarbons.
PVs growth in recent years has
largely been due to the involvement of China. Not only does its
huge, energy-hungry population
make it an attractive end-market
for solar forecast to be the worlds
largest this year but its manufacturing ingenuity has also proved
instrumental in driving down the
costs of solar panels to the extent
that PV is now able to compete on
almost level terms with conventional power sources.
This dramatic fall in costs has
opened PV up to a whole new world
of possibility. One of its big attractions is that it lends itself to areas of
the developing world poorly served
by centralised grid infrastructure,
offering the promise of electrifying
areas that would probably have to
wait years for a connection.
PV is an ideal way to provide
power to that large portion of the
world that doesnt have it, says
Chris Case, chief technology officer
at Oxford PV, an Oxford University
spin-off company developing cutting-edge photovoltaic technologies.
Even small PV power stations can
provide access to things like mobile
phone charging, refrigeration for
vaccines and TV receivers.
South Africa has so far led the
way among emerging economies,
launching a renewable energy drive
in which both solar PV and CSP

feature prominently. Other African

nations are following, with Kenya,
Ghana and Ethiopia among the notable players. Outside Africa, small
developing island nations are also
latching on to solar; in 2012, Tokelau in the Pacific became the worlds
first island to be entirely powered by
solar. With PVs scope increasing,
EPIA predicts it will reach as much
as 430GW by 2018.
But the real excitement with solar
is over what is yet to come. Oxford PV
is involved in developing a new material that it claims promises leaps forward in both the efficiency and cost
of harnessing the suns energy.

Tech to
watch
Page 15
Mr Case says the companys
material, perovskite, has demonstrated the potential to significantly outperform the current
silicon-based materials used in PV
panels. Its big selling point is that
can be incorporated directly into
buildings, effectively turning them
into power stations.
It can do something that no
other material can do: it can become part of the glazing on buildings, he says. Implemented in
that way, a building like the Shard
in London becomes a 2.8-mega-

C
B

A: Families in
Southern Sudan get
power fromsolar
B: MS Turanor
PlanetSolar is the
world's biggest solarpowered boat
C: Photovoltaic
installation on the roof
of Germany's Federal
Environment Agency
inDessau

Image: Getty

In one hour the sun

provides the equivalent
energy of the entire Earths
consumption inone year
watt (MW) vertical power station,
generating over 1 gigawatt-hour of
electricity a year. That is a completely new market.
OTHER APPLICATIONS

Beyond buildings, PV technology is finding its way into a host

of other new spheres. The first
round-the-world flight powered by
PV was completed last year by the
futuristic Solar Impulse aircraft,
while tech giant Apple has also recently taken out various patents
that industry observers believe
herald its move into solar-powered smartphones. More outlandish applications include clothing
that incorporates solar-powered
phone-charging fabrics, though this
remains some way from becoming
mainstream.

Despite some attempts by fossil

fuel lobbyists to disrupt the advance
of solar in countries such as the United States and Germany, the compelling fact about the technology is that
in almost no time it has gone from
being an expensive sideshow, in some
eyes, to a potential game-changer.
The IEA has just published a report
positing solar as the worlds largest source of energy by 2050. As
the technology improves and the
economics become even harder to
ignore, it would take a brave soul to
bet against that happening.
In one hour the sun provides
the equivalent energy of the entire
Earths consumption in one year,
says Mr Case. Outside of wind,
solar is the only renewable energy
source that can potentially power
the entire world.

POWERING THE FUTURE

15/10/14
EDITION #0282

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/RACONTEUR.NET
@RACONTEUR

Opinion

hancellor George Osborne

told the Conservative Party Conference that there
are always one hundred reasons to
stick with the past, but we need to
choose the future. He went on to
argue that the pioneers of the Industrial Revolution would not have
balked at difficult decisions on infrastructure they would have simply
rolled up their sleeves and got on
with it.
Mr Osborne may well be right, the
industrialists of the age of enlightenment as he described it, certainly
werent afraid of grappling with the
big problems of their time. If 97 per
cent of scientists had agreed that
humans were causing dangerous climate change, entrepreneurs such as
Watt and Brunel would presumably
have had it sorted by breakfast.
But judging by our efforts to reduce the carbon pollution that is
fuelling climate change, we live
in less rarefied times. Confusion
and uncertainty reign in our energy sector, with policies to reduce
carbon competing with policies to
subsidise our oldest, most polluting
power stations. Judging by its ac-

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/RACONTEUR.NET
@RACONTEUR

Case Studies

CLEAN
TECHNOLOGY
OFFERS
NEWHOPE
The Government
should choose a future
of renewable energy
and ditch carbon
pollution that is fuelling
global warming, says
Greenpeace UK climate
and energy campaigner
Lawrence Carter

POWERING THE FUTURE ONLINE:

WWW.RACONTEUR.NET/POWERING-THE-FUTURE

tions, the government doesnt seem

to know whether to choose the past
or the future.
The potential of the clean-tech
sector is astonishing, from tidal lagoons and wave power, to huge cost
reductions in wind and solar that
have seen them become competitive
with gas power stations in parts of
the United States, without subsidy.
The energy system of the future is
smart, with technology matching
energy supply and demand, maximising storage by charging appliances
when the wind or sun is strongest
and power cheapest.
Google has recognised this is
where the future lies, investing
$3.2 billion in a smart home energy
management company. The worlds
largest private bank, UBS, is advis-

ENERGY TECH
TO WATCH

Flemmich Webb researches

fivetop energy technologies
withapromising future

setting up power companies to deliver a better deal for their citizens.

Munich has already declared that it
will be 100 per cent powered by renewables by 2025. In the UK, Bristol, London and Nottingham are in
the process of establishing energy
companies.
But the policies of central government are stuck in the past. Recent efforts to reform the energy
market have been geared almost
entirely towards getting one new
nuclear power station built. Fifty
eight years after the UKs first civil
nuclear plant opened, new projects
remain dependent on colossal levels
of public subsidy. By the time Hinkley C opens, onshore wind will beat
it on cost, but we will be locked-in to
subsidising it for the next 35 years.

The potential of the clean-tech

sector is astonishing, from tidal
lagoons and wave power, to huge
cost reductions in wind and solar
ing its clients that large, centralised
power stations will become redundant within two decades. In a future
where solar power, electric cars and
cheaper batteries transform the
way our electricity market works,
these power stations are simply
not relevant.
Embracing these clean technologies can completely transform our
relationship with energy. Currently
the vast majority of us are passive
consumers and, judging by opinion polls, not particularly happy
ones. Cutting-edge clean technology opens up the prospect of cities

This obsession with centralised

power stations even stretches to
keeping coal plant running. In December the government is set to
offer up to 2.2 billion in public
subsidies to old coal power stations,
potentially funding refurbishments
that could keep them open for up to
two decades.
If we really want to choose the
future we need to follow the likes
of Google in backing clean, smart
technologies. If we dont were
going to be left with a Walkman,
when everyone else has a shiny
new iPod.

01

02

03

04

05

Three billion people around the world

cook on an open fire or use dirty,
unhealthy fuel and, according to the
World Health Organization, about four
million people die from indoor cooking
smoke every year. African Clean Energy
(ACE) was founded to come up with a
solution to this problem and its answer
was the ACE 1 Ultra-Clean Biomass
Cookstove. This uses gasification to
burn almost any type of biomass wood
blocks, wood chips, sticks, cow dung,
corn cobs and other similar agricultural
residues smokelessly. ACE claims the
stove, which has a combustion chamber
made of refractory ceramic tiles, reduces
fuel use by 70 per cent, cuts fuel costs by
about 50 per cent and almost completely
eliminates black carbon emissions.
The stoves ceramic base has a battery
in it to power the units fan, as well as
charge mobile phones and run LED
lights through the inbuilt USB port and
DCconnector.

Wind turbines are controversial. Whether

they are offshore or onshore, people tend
to love them or hate them. But imagine
if they were deployed high up in the sky,
almost out of sight. The Altaeros Buoyant
Airborne Turbine (BAT) is raised into
the sky on a tether, where it harnesses
more powerful high-altitude winds. A
helium-filled shell allows it to lift into the
air and stabilise; inside is a lightweight
conventional three-blade, horizontal axis
wind turbine. The advantage of tapping
into these high-altitude winds is that they
are more consistent and average around
twice the velocity, with five to eight times
the power density, than those found near
ground level. Because the technology
can be deployed almost anywhere, it can
reduce the cost of generating renewable energy in remote communities and
at remote industrial sites. A portable
ground station can be put into position
from a shipping container and includes
an autonomous control system.

The European EnAlgae project, led by

Swansea University, is testing a number
of techniques to grow seaweed. Why
seaweed? Macroalgae (seaweed) have a
high carbohydrate content, which means
they can be used to generate biogas
through anaerobic digestion. The growing
techniques trialed so far include using
combinations of longlines (ropes), grids
and textiles. These are first seeded
with young seaweed gamaphytes grown
in on-shore hatcheries and then placed
offshore. The length of time they are
left to grow depends on the species, but
its usually months to a year before it is
harvested by hand or by using barges.
As well as energy, a viable seaweed
industry has other advantages, including
alternative boat work for fishermen, additional habitat for marine life and, when
seaweed is grown next to commercial
fish farms, it grows faster, indicating it
can absorb the excess nutrients from the
fish-farming process.

Sewage is a great energy resource.

Thats the view of Huber, which uses
special heat exchangers and heat pumps
so wastewater can heat or cool buildings
above ground. Municipal sewage contains thermal energy its temperature
is usually between 10 and 20C all year.
Huber takes sewage from the sewer,
screens it, pumps it through special heat
exchangers and then returns it back
into the sewer. The heat exchangers can
either add this heat to the buildings own
heating systems or take excess heat
away from the building, thereby helping
to cool it. The potential is substantial.
According to Hubers own analysis,
wastewater flowing under New York, Los
Angeles and Munich could provide between 15 and 50 per cent of the energy
needed by commercial buildings; in most
other cities the figure is between 30 and
35 per cent. The technology is currently
being used in 400 to 500 installations
across the world.

Scientists at Bath Universitys Centre for

Sustainable Chemical Technology are
developing a new catalyst powder, based
on iron nanoparticles and carbon nanotubes, which can convert the greenhouse
gas carbon dioxide from industrial flue
gas into fuels and other industrially useful
chemicals. The technology provides
an economic incentive to large carbon
emitters to invest in expensive capture
equipment, reducing industrial carbon
emissions and helping make a significant
impact on climate change. The process
can be tuned to produce hydrocarbons
of choice with high selectivity, including
short-chain olefins, which are widely used
in industry as feedstock to produce chemicals, and longer-chain hydrocarbons that
can be used as fuel components in the
place of fossil fuels. These could be used
to run vehicles, for instance. Researchers
hope to use waste heat from power plants
to drive the process, creating a carbon-neutral method of making fuels.

Low-carbon
cooker

Flying
wind turbine

Energy
from seaweed

Heating and cooling

with sewage

Making fuels
from thin air