Polio!

I read the other day that 22 cases of suspected polio have been identified in NE Syria. If the civil war wasn't bad enough, allowing a window for a disease that can paralyse children to re-establish itself is tragic. Polio is on the brink of eradication (think of the success with smallpox) and here we have a situation that may allow a wider comeback. This is especially so given that local leaders in NW Pakistan have banned vaccination. Two fronts on which to fight this disease are two fronts too many.

Oral History - Capture It Now

Those of you who know me well (and following this post, the rest of you) will be aware that I've been sporadically capturing my family history over the past few years. In a recent blog post Dick Eastman refers to a statement from an American archives technician that, on average, it takes just 3 generations for a piece of oral family history to be lost unless there is a diligent attempt to preserve it. There are certainly several half-remembered tales attached to my family, some of which I'm sure I'll never fully understand. I think I've solved the mystery of "the woman who ran away with the man from the powder factory" but I've no idea what connection we have to "the waterman from Wapping".

So, my suggestion to you all when you gather for your Christmas celebrations and swap family anecdotes is to write them down as soon as possible. So much in life these days is ephermeral (think of all those deleted emails and tweets) - let's capture what we can.

The Dead Salmon Has It

When Craig Bennett of the University of California stuck a dead salmon in his brain scanner to perform a test run on the machine he got something of a shock - the fish's brain and spinal column were showing signs of neural activity.

This has rather put the cat among the neuroscience pigeons. It has pointed up that many, many research findings in the discupline are fatally flawed by poor technique. As a (lapsed) scientist I find this shocking.

Is it any wonder that scientists face not just a sceptical public but a disbelieving one? Climate change anyone?

Random Thoughts on GM

The fingers have been away from the blog-keyboard for a while - for a variety of reasons including work, covering for an absent colleague, travel, volunteering. This all means that I've rather lost track of some of the exciting things happening out there beyond the boundaries of Commuterland. In my reading to catch up with life I was struck by the kerfuffle that's been going on about the proposal to release GM flies in Spain to tackle olive flies. There's been the usual outcry about meddling with nature when we don't know the potential outcome but that's an argument that could be placed on the doormat of almost every experimental procedure. And there's evidence from seven (yes, seven) years ago that such experiments don't necessarily end in death, doom and disaster. GM bollworms have been "out in the wild" without, apparently, any unexpected problems. Isn't about time we were a little less hysterical about such approaches? GM flies might just be less harmful than the clouds of insecticide that will otherwise be used on those olive trees. It's time to find out.

Some Risks in CCS

Last night over dinner a couple of mates were berating me for not putting finger to keyboard for some time. So, Keith and Ken, this is for you.

The other day a colleague pointed out to me a couple of risks associated with the White Rose CCS project that hadn't occurred to me. The White Rose project itself involves the construction of a new coal-fired plant, alongside the existing Drax PS, equipped with oxyfuel combustion technology. Then there is an entirely separate project headed up by National Grid to build a pipeline out into the North Sea.

Of course, the two project are inextricably linked. What my colleague suggested was that any environmental statement supporting the development will need to adopt the so-called "Rochdale Envelope Principle" (No -I've never heard of it before, either). Under this principle the developers have to assess and present the maximum potential adverse impacts for the whole scheme. My colleague then went on to point out that this adds two new risks to the plethora that already surround CCS projects:

• the risk of increased challenge prompted by presentation of this worst case scenario;
• challenge about whether or not a worst case scenario has actually been disclosed.

As assiduous readers of this blog will know I was periferally involved in one of the unsuccessful projects bidding into the competition. One of the big headaches in putting together the project was clear allocation and management of risk. Of course, there are all the usual ones you expect in any big project - technology risk, financing risk etc., but also some peculiar to a multi-player project of this nature - integration risk being one of the biggest.

Even at the back-end of the project there is a sting in the tail. Eventually, under the EU CCS Directive, risk can be passed to the member state's government but only "if and when all available evidence indicates that stored CO2 will be completely and permanently contained". That is some tall order if you really think about it. The monitoring and maintenance commitment that is implied is not insignificant. Furthermore, even when risk is transferred to the state the operator has to make a financial contribution towards continued monitoring.

One of the big hopes of the project that I was involved in was that it would unlock enhanced oil recovery as a means of offsetting some of the risk-based costs. Neither of the selected pojects will do this and it is difficult to see how a truly independent project with such an aim can get off the ground in the near-, or even medium-term.

Is Major Sniffing The Same Stuff As Milliband?

First it was Ed Milliband wanting to impose an energy price freeze, now John Major has gone even further banging on about a windfall tax. What are these guys on?

Major seems to think the energy suppliers are profiteering - taking exceptional rents. Now, hang on a minute, John. These companies are operating in a market for a couple of undifferentiated products (electricity and gas). The former essentially has its price set by world-traded raw materials and conversion costs and the latter is itself a world traded commodity. So we should not be shocked to see that their offers are very similar. These firms are not going to compete like mad on price - loosing customers hurts the bottom line because they would have to spread their fixed costs over a smaller customer base; and winning customers is expensive. Sure, there's a little jockeying around the edges but they ain't going to rock the boat too hard.

It's true that the barriers to entry into the market are high so, surprise, surprise, we have just 6 major companies operating in this country. This is about the norm for this sort of market. Could they be colluding and taking super-rents? Well, just possibly - price signals are easy to make in this market - but sooner or later someone would break ranks and I think we'd settle back to their returns hitting their cost of capital. And if there is mischief it's not for someone to impose a windfall tax without assembling the evidence. What are the competition authorities for? (And eventually the courts?).

The real shame of all this posturing is the potential for investors to run a mile. Britain is in dire need of new plant and other infrastructure. The sight of governmental meddling is just what shareholders do not want.

This issue is too important for populist grandstanding - our politicians should be big enough to get off their soap boxes and provide the right environment for sustained investment.

What is Ed Miliband Smoking?

So Grommit wants to freeze gas and electricity prices for a couple of years. Good election gambit that.

But he also wants to have a carbon free grid by 2030.

Is he going to do this with more or less the same power market as we have now? 'Cos if he is his first pledge will stifle investment while his second demands it.

Or perhaps the good old CEGB (my old stamping ground) is on its way back. Now there's a thought.

Fracking - the Need to Remove Emotion

I've muttered in this blog on previous occasions about the need to approach the fracking "debate" in an informed and rational manner. Unfortunately that is still not happening, the debate remains a battle of the megaphones.

On the one hand we have the likes of David Cameron who argues that fracked gas will drive down energy bills and make Britain more competitive. This has happened in the States but there are plenty of differences between the situation here and the scene over there. Translating market experience from the latter to the former is certainly not a one-to-one process.

On the other side are the environmental movements who say that fracking poisons water supplies, pollutes the atmosphere and triggers earthquakes. Much of this is vastly overstated.

Let's try to place a little bit if rationality into the arena.

First of all, how about a little piece of history? Fracking as a technique has been around since the 1940s. Essentially it consists of pumping a fluid into a shale formation (shale in the most abundant form of sedimentary rock and serves as the source rock for oil and gas) to crack the rock. These  fractures are propped open with a proppant, often sand, to allow trapped oil and gas to flow out. Water is the major component of fracking fluid but there are chemical additives to ease the process (e.g. polymers to reduce friction thereby allowing lower pressures to be utilised).

The big change that led us to the current situation was the application of fracking combined with horizontal drilling to tap into gas-rich shales that had hitherto been impossible to extract economically. In 2000 shale gas represented just 2% of US natural gas production. Now it is approaching 40%.

So what of the competing claims of the megaphone wielders?

Let's start with the economics. Latest estimates suggest that there are about 1300tn cubic feet of shale gas in NW England. That's a hell of a lot and even extracting just a low percentage would cover potential demand for many years. However, England is much more densly populated than the US; land ownership and mineral rights differ markedly; despite the current fuss over enegy prices the population here appears to have a greater tolerance for high costs particularly where they are incurred for environmental reasons; the regulatory regime here is likely to be and remain more stringent that on the other side of the Atlantic (see the latest EU moves on requiring extensive environmental audits before fracking for instance). So an economic bonanza seems unlikely. Sorry, David.

However, fracking would play to energy security which readers of this blog will recognise as a recurrent theme. And with the US now exporting cheap coal that has been displaced by gas there is a delicate balance to be managed by the UK and other European countries between climate change commitments and international competitiveness.

Now to the environmentalist's side.

Can groundwater be contaminated? Well, yes, in certain circumstances it can. But in general shales for fracking and groundwater aquifers are separated by thousands of metres of rock. The issue would appear to be one that is manageable through judicious well construction. So there is a place for regulation and inspection here - adding to my "no economic bonanza" statements above.

Does fracking trigger earthquakes? Very rarely and of low energy. Coal mining is a bigger threat in this area. However, storage of wastewater in depleted wells has been shown to cause more noticeable tremors. In fact waste water is perhaps one of the bigger problems. We may well see much more recycling and less disposal in the future.

Finally there's climate change. Gas is a carbon-based fuel, of course, so there is a CO2 issue. If attention is deflected from low/zero carbon energy sources by fracked gas then this is not a good thing - especially if the gas is used in electricity generation because a CCGT built now could still be operating in 2040. But if gas is displacing coal then at least it is a move in the right direction.

What do I think is going to happen? Well - there will be shale gas, the politics of the situation simply dictate that. Possibly, though, it will be in support of renewables, not replacing them. And, who knows, maybe carbon capture and storage will have a role to play.

Watch this space.

Price Rises, Weasel Words and Green "Taxes"

So SSE was the first one to blink an announce energy price rises of about 8.2%. And guess what? They implicated "green taxes" stating that they had risen by 13% whereas wholesale energy costs have risen by a mere 4%.

But hang on. This is the usual percentage vs absolute con.

Information from DECC shows that the breakdown of the average £1267 dual-fuel energy bill is
Wholesale energy £597
Network costs £257
Other supplier costs and margin £240
VAT £60
Green and social policies £112.

So what is 4% of £597? Yup, it's £24.
And what's 13% of £112. Well, it's £15.

So, yes, there is an uplift from green and social policy costs and levies but in absolute terms it is still less than the uplift from wholesale price movements.

Note that I used the term "green and social policy costs" 'cos that's what they are. ECO and the Warm Home Discount, for instance, are not about low carbon generation, they are about keeping the poor and the old a tad warmer in the winter.

So, whatever happens you will be paying more for your energy. The question is, do you want to spend that money on low carbon sources or fossil fuels; and how much should you be covering social costs? Just don't take energy company froth at face value.

EdF Behind Schedule: A General Indicator?

EdF has announced that it is behind schedule for achieving its 2020 CO2 emissions from electricity generation reduction target. It is also behind on is nuclear build programme (aiming for 2 reactors at Hinkley and 2 at Sizewell - but we all know about the problems of agreeing CfDs etc.).

So, it comes as a bit of a surprise that they still claim that they can hit their 2020 target. Possibly more worrying is the thought that this might be an indicator for the electricity sector as a whole.

Technology Support for the Elderly

The Chinese in the past numbered their days and years on a 60-year cycle ( the sexagenary cycle). As I am now settling into my second revolution of this cycle I was interested in research from the London School of Economics suggesting that the demand for "unpaid care" provided by children for elderly parents may exceed supply by 2017. The LSE argues that there is a need to develop support technologies to fill this gap.

Of course, there will also be a need for someone to supply luddite curmudgeons like me (fortunately not yet dependent upon my offspring) with the knowledge and expertise to manage the technology. This is often more difficult that producing the gizmo in the first place.

Unscramble Energy Efficiency Policies

And next in line is the CBI. They've recently published a report "Shining a light: Uncovering the business energy efficiency opportunity" which, among other things, calls upon government to streamline overlapping energy efficiency policies. Being a business support operation the CBI of course, includes shouts for further support for business - including energy intensive outfits - but, give them their due, also castigates many businesses for not taking the opportunities open to them. "Businesses also need to step up to the challenge" was the quote from Rhian Kelly, Director for Business Environment Policy. Quite so. I have long been amazed at the profligate waste demonstrated by many businesses when a little thought and investment could reap material gains.

The Green Race

We're just back from our summer holiday (2 glorious weeks in Alonissos) and, boy, can you tell it's party conference time. Every single issue group and it's brother is out there touting their particular beef. First up on my radar is the Green Alliance arguing that the UK is falling behind in the global race for the green market. Particular failings are the lack of political leadership (whatever happened to the "greenest government ever"?) and poor focus on delivery. In the case of the former there is clear political conflict at the highest levels in government (check out what Ed Davey has had to say recently about his Tory colleagues simply "not getting it"). Such a situation can do nothing but deter investment - especially as most innovation funding that's available is short term (where have we heard that before?) and there is poor supply chain support.

Commenting on the report Gordon MacDougall, COO of RES UK, couldn't help having a pop at fracking. Well, you'd expect that from his position but the UK's energy strategy is in such a poor state that I suspect that every available source needs to be pursued.

Secrecy, Obfuscation and Lies

I am in the middle of reading Ben Goldacre's "Bad Pharma" having previously read "Bad Science". The latter didn't surprise me and, perhaps not surprisingly, did not fill me with rage. The former has me seething. For the purposes of this post I'll not delve into the nastily unethical activities of the drug companies themselves - I just urge you to read Goldacre's book. Rather I just want to note that regulators and governments are deep in the mire, too. In some cases it's niaivity, granted, but in far too many regulators and governments appear to be in the pockets of the pharmacutical giants. And one of the ways this is manifested is by their connivance with big pharma in keeping the results of trials secret, in obfuscating the evidence, in approving worthless drugs and more.

What finally triggered me to put finger to keyboard was reading Nick Butler's latest blog post. Readers of this blog will have realised that I have some time for Butler and in his current post he comes with further evidence of a secrecy culture within Whitehall. In this case his target is DECC but the malaise is the same as one of those highlighted by Goldacre.

Butler starts off by noting a report in the Telegraph that claims that a study into the impact of windfarms across the UK is being suppressed by DECC. He then goes on to cite a stack of other energy related reports, working papers, assessments and studies that are not seeing the light of day.

As I have noted before, energy is the starting point of the nation's value chain and we should expect our politicians and civil servants to recognise that fact, to act in the country's best interests and to be accountable to all of us who depend upon their expertise and integrity. Instead we have a culture of silence which might cause one of a suspicious nature to suspect that politicians and civil servants are covering their embarrasment at the failure of policy, at their poor judgement and management, and, indeed, at their total ineptitude.

As for our drug regulators - just don't get ill.

Don't take my word for it - read Butler's blog - read Goldacre's book (and his Bad Science blog).

How Much CO2 For A Tweet?

Sorry about the "CO2" in the title. I can't quickly see a way of putting in a subscript (and the only way I can get anything resembling one in the main text is by using a smaller font). The chemist in me finds this really annoying. Nomenclature in chemisty is important with numerical subscripts, superscripts and those in normal sized fonts having different meanings. A shame on any application that doesn't allow their use. We are breeding a generation that is ignorant of the subtleties.

But that's not the subject of this post.

Mark P Mills, CEO of the Digital Power Group has recently published a report assessing the electrical demand of the global IT system. He argues that just short of 1/10th of all electrical energy usage goes on IT. This is not about the energy required to charge your smarphone or anything like that. This is all about data traffic.

Mills calculates that streaming one hour of video per week to a smartphone consumes more energy annually in the remote data network than running 2 domestic refrigerators for a year. Our "always on" data culture has spawned a huge number of energy hungry data farms and it is these that are contributing to the massive increase in energy usage that Mills writes about.

Makes you think, doesn't it? But does it stop you forever checking your rather trivial Facebook profile, sending meaningless tweets or uploading out-of-focus photographs?

Climate Change Preparedness

Researchers at Newcastle University have recently published an assessment of the climate change preparedness of 30 urban areas in the UK. They have done this by analysing documents published by the relevant local authorities and mapping their content and intent as mitigation and adaptation scores. A very mixed picture results. Some authorities have apparently well developed mitigation and adaptation strategies whereas others are only just embarking along either road. Very striking, and worrying, is the fact that mitigation appears to be the dominant activity in all areas. I think it is acknowledged that climate change is already upon us so, although there clearly is a requirement for mitigation to lessen future impacts, there is also a certainty that adaptation is an absolute requirement. London and Leicester come out as leaders in the latter; other areas would seem to be badly under-prepared.

Better Late Than Never

It's Eric Pickles' mob again! A mere 461 days after consulting on Part L changes there has finally been an announcement. What is it about DCLG that makes one think they are just not with it? The changes pressage a 6% decrease in CO2 emissions from new domestic premises and 9% from non-domestics buildings. There are no changes to provisions for existing homes and, of course, consequential improvements do not feature. The delay in coming to a conclusion means that the new requirements come into force in April 2014 rather than April 2013 as originally planned. It's all rather pathetic, isn't it?

PS (added 18th August). There's a short piece worth reading in Rod Janssen's Blog.

Solar Array Over-performs

There was a post on Edie recently that stated that the Met Office's solar array at Exeter had over-performed last year compared with expectations. This is despite 2012 being one of the wettest and least sunny years on record. My immediate thought was this all begs the question of how the solar array output forecast had been done in the first place.

Being a bit of a nerd I ran a quick assessment before we acquired and had installed our little (about 100 times smaller than the Met Office) array. Because I was looking to test the economic viability of my scheme I was cautious in my outlook. For instance, I assumed that I only got the manufacturer's minimum performance guarantee level. That was pretty certainly going to be worse than year 1 performance. I also rounded the array's orientation and pitch to the nearest 10 degrees in a detrimental direction. Surprise, surprise! My 2012 performance figure outstrips my "prediction" (2570 kWh actual vs 2157 kWh predicted). I'm pleased, of course, because this suggests that payback will probably be quicker than my model forecast but I really should not be surprised - I bent the inputs to make such an outcome likely. Did the Met Office do the same?

Incidentally, a number of friends have used my model (it's in Excel) to assess their projects and I can make it available on a "no prejudice" basis if you drop me an email.

Bonkers Planning Part 2

Just thought I'd post this link. Life is crazy!

Where Do Politicians Come From?

Marc Sidwell's latest post at City AM neatly points up the lack of worldly knowledge possessed by our current crop of politicians. However, I'm not happy with Sidwell's, proposed solution - i.e. a supply side of the economy allowed to let rip. Rather I'd like to see some sort of "experience requirement" placed upon all would be MPs. Not sure how it would work - ideas on a post card, please.

Energy Policy Is A Mess

I am told by one who should know that a recent straw poll at the CBI demonstrated that the two biggest concerns that UK businesses have are the lack of skilled potential recruits and the country's chaotic energy policy. To date I have resisted pontificating on the former, although I have seen local students appallingly let down by their educational establishements and, not so long ago when I was in a position to recruit, I was sickened by the poor CVs of so many new graduates. That is for another day. I have, however, grumbled on about the dreadful state of the UK's energy policy - particularly as it relates to the electricity sector.

The fact that we still don't have a new nuclear programme agreed is just one symptom. For sure, some of this is down to EdF failing to undertand that chaotic energy policy does not necessarily mean that the officers at DECC with whom they are dealing are in a weak position. EdF should realise that a deal at, say £70/MWh, is probably a win-win solution and could form a valuable platform for the company to rebuild its business. Perhaps when the summer sun is not frazzling the Gallic brain sense will prevail.

HMG, of course, does not help itself. As currently organised energy provision is an amalgam of public (i.e. government) policy and private money. If the policy side is not clear the money side will not follow. That is just where we are.

I will not apologise for repeating my argument that the country's value chain begins with the cost of energy. For that to be optimised there is a requirement for a clear and coherent energy policy. It's not rocket science.

Shed of the Year

I just couldn't resist linking to this.

No Consequential Improvement

A couple of weeks ago the High Court ruled against a judicial review of Eric Pickles' decision not to enact the consequential impovements proposals for new Building Regulations. While I cannot say I am surprised by the decision I must admit that I am disappointed that the case brought by ACE was not allowed to proceed further. Readers of this blog will know that I support the concept of consequential improvements as an important way of increasing the energy efficiency of the UK's housing stock. Furthermore, although I admit I have no analysis to prove the contention, I suspect that a permanenet consequential improvements requirement would be more beneficial to the construction industry/building trade than will the temporary relaxation of permitted development rights. It's that damn DCGL again!

Bonkers Planning

My previous post about Planet Pickles reminds me that earlier this year our Parish Council wrote to our MP to point out a glaring anomaly in the 2008 Permitted Development Order. I reproduce the letter below:

Wonersh Parish Council (WPC) considers that it has an important role in examining and commenting upon all planning applications affecting the parish. Significant areas of the parish fall into at least one of the Green Belt (GB), the Surrey Hills Area of Outstanding Natural Beauty (AONB), or the Surrey Hills Area of Great Landscape Value (AGLV). WPC particularly seeks to ensure that these localities are not detrimentally affected by proposed development and Waverley Borough Council (WBC), the local planning authority, has provisions in its Local Plan that similarly seek to protect such areas.

WPC is becoming increasingly concerned that under certain circumstances the changes made to the Town and County Planning (General Permitted Development) Order 1995 by the Town and Country Planning (General Permitted Development) (Amendment) (No 2) (England) Order 2008 inappropriate rural development can and is deemed to be permitted. WPC therefore requests that you make representation to the Department for Communities and Local Government (DCLG) to seek to have this anomaly removed. Details of the issue are outlined below.

 The rules concerning what extensions, improvements and alterations a householder may make to their house without the need for a planning application are clearly set out in the DCLG document “Permitted development for householders: Technical guidance, 2010”. Inter alia the rules

          i.        proscribe any enlargement of a dwelling house which would extend beyond a wall which

a.    fronts a highway and

b.    forms either the principal elevation or a side elevation of the original dwelling house;

         ii.        restrict the depths of any rear extension and the width of any side extension.

 However, there appears to be no restriction to the size of an extension to the principal elevation of a dwelling house if that elevation does not front a highway. Such circumstances are most likely to occur outside settlement boundaries which, in the case of Wonersh Parish, means within at least one of the GB, AONB or AGLV.

Since 2008 WPC has seen and commented upon several planning applications which have sought to take advantage of this apparent loophole, all of which have been granted a Certificate of Lawfulness by WBC. In the latest of these the applicant is seeking to increase the size of the dwelling house by approximately 100% in a manner which WPC considers to be wholly inappropriate for its rural location within the GB and AGLV. Such development would normally be proscribed by WBC’s Local Plan under which extensions outside settlement boundaries would be limited to increasing the floor space of the original dwelling by no more than 40%. Both WPC’s concerns and WBC’s policy with respect to rural development are nullified in this case by the provisions of the 2008 Order.

 

WPC thanks you for your attention and looks forward to hearing, in due course, the outcome of any representation you are able to make.

 

Our MP forwarded the letter to DCLG and what reply did she get (from Nick Boles MP)? Well, yes, DCLG recognise that there is an anomaly. But will they do anything about it? No. They say it's down to the local planning authority to exercise an Article 4 constraint. Now how bonkers is that? You oversee bad policy, recognise that it is bad policy, but ask a lower tier of government to try to straighten it out using an almost unworkable alternative piece of legislation. DCLG get my vote as the worst, most incoherent, waste-of-space government department.

Planet Pickles Strikes Again

The following is reproduced from Edie. It speaks for itself.

Renewable energy company Ecotricity has hit out at the Government for its approach to planning, claiming it has introduced conflicting rules for certain projects.

Last week the Government announced that it will allow applications from business and commercial projects to be determined at national level, avoiding local level decisions.

However, at the beginning of June the Government announced that planning guidelines would give local communities earlier and better involvement in the siting of onshore wind farms.

Ecotricity founder, Dale Vince, said: "At the beginning of June, the government announced that it was going to give "local communities a greater say on planning" and as evidence of its apparent commitment to localism, it issued yet another set of planning guidelines that meant local communities had greater opportunity to veto onshore wind projects - this was supposed to be what Eric Pickles called "localism in action".

"Now, barely three weeks later, the government has announced that it is to allow projects such as food processing plants, theme parks, warehouses and hotel complexes to completely bypass those local communities and seek planning permission directly at national level. Where is the localism in that?

Vince backed the need to cut red tape and agreed that an efficient and effective planning process "that balances local opinion with national interest" must be put in place.

"Surely it should be consistent, rather than the situation we have now where a theme park is fast-tracked as nationally important infrastructure, while wind energy is left in a kind of planning ghetto, in the same category as a new garden fence," he added.

As I said - it speaks for itself - DCLG appears to be acting as incoherently as ever.

Electricity Capacity - Again

Golly gosh! We have a 122 page report from Ofgem telling us that the electricity system is getting a tad squeezed. We know this! Even this ill-informed blog has highlighted the problem on a number of occasions. The words "Rome", "fiddling" and "burns" spring to mind.

Successive governments have ducked and fudged the issue, failed to put sensible market mechanisms in place and generally failed the electorate. Given that energy is the starting point for the nation's value chain this represents an horrendous dereliction of duty. The current mob seems to me to be no better than its predecessors. Dare I say it? Bring back the CEGB with all its faults!

MPC - No Change

So the MPC voted for no change last week. This is hardly surprising given that Mark Carney had only been in post for a week or so. However, I have to say I was a little bit surprised at the strength of the statement about long term interest rate propspects. To be as explicit as the statement was risks a future conjunction of egg and face, although in this case I don't think that's too likely. I guess one underlying reason for the statement might be an attempt to drive a little volatility out of markets. We shall see.

No change to QE seems to me to be a good decision but some of the noise from commentators is a little concerning. Take KPMG, for instance. This is clearly suggesting that a future increase in QE is firmly on the cards. Don't we already have enough stimulus in the economy? (Although some of it is mad - such as the moves to prop up house prices - come on guys, let the market find it's own level). And there are some bonkers ways to creating stealth QE already up and running. Interest paid on gilts owned by the Bank as part of QE is now being handed back to Treasury. Isn't that just a tad circular? This is boosting money supply at just a time when it would appear, at least in the cases of households and private firms (excluding the financial sector, of course), that it's pretty good anyway.

As an ordinary Joe I'd like to see us moving to a position where interest rates are no longer at rock bottom, where it pays to save, where bond and gilt yields actually reflect inflation and expected growth, and where central authorities have managed to butt out of interventionist policies.

There is still a lot of pain to be borne, but isn't time we really took the medicine? Cheap money is propping up zombie firms and households. It's time they were purged from the system.

So Eco Bling Adds To the Value Of Your House

DECC has recently released research suggesting that energy efficiency measures can add to house sales values. The report suggests that, on average, moving up 2 bands on the EPC scale could add £14k to a dwelling's value. There are probably plenty of properties that could see that improvement for an outlay of less than £14k so, if the research is valid, this does provide an additional arrow in the retrofit trades collective quiver. Interestingly, the regional breakdown does not give any figures for the south east (where I live so appealing to my selfish side) - there's a footnote saying the results were not statistically significant. I haven't read the full report to understand what's going on here - perhaps the high average price of properties pushed any energy efficiency factor into the noise?

Centrica Boost to Fracking

Centrica has bought a 25% stake in the Bowland Shale exploration licence. What does this mean? Is it signalling that shale gas and fracking are truly on the map now for the UK, or is it just Centrica hedging bets? Afterall, the £40m it has paid to Cuadrilla and the £60m it is putting into exploration and apraisal hardly rates as a hill of beans for the energy giant. A bit of bet hedging is my assessment at the moment. Fracking may come but it is not yet (nor is it likely to be in my opinion) the game changer that many are suggesting.

Energy Costs and Competitiveness - A Cleft Stick

Ten days or so ago IGas released studies suggesting that shale gas resources in Great Britain are considerably higher than previously thought. I understand that the report said nothing about commercial development but there is clearly the potential for extraction of indigenous shale gas, possibly at advantagous cost.

This really points up the conundrum facing the government in its ongoing development of energy policy. The UK has some of the highest energy costs in the world, and since energy is the start of many a value chain this has a direct impact on the competitiveness of UK industry. But HMG is pursuing a low carbon energy route map (although recent decision might make you doubt that). It's difficult to see how the current crop of low carbon sources - wind, nuclear, solar, even CCS - will bring costs down.

Crunch time may come soon - could we be nearing the time when HMG pulls back from its domestic climate change goals in favour of ensuring that developing nations minimise their CO2 emissions?

New Nuclear - Nearly There?

Word on the street is that Cameron's meeting with Hollande a couple of weeks ago stitched up a couple of  "scratch my back and I'll scratch yours" deals and that a notable beneficiary of the new friendliness between the big boys is EDF - or more specifically EDF's nuclear ambitions in the UK.

There's still the issue of financing the project to be overcome - EDF has a rather rocky balance sheet but it looks a though some risk sharing with construction partners might just smooth away that issue.

And then, of course, there's the strike price to settle on. Both sides are in an "interesting" place on this one. HMG must be seen to be being tough in its negotiations. EDF desparately wants the project. Look for last minute concessions on the strike price here.

Watch this space.

CCS Cost Reduction - Final Report

A week or so ago the CCS Cost Reduction Task Force published its final report. To those of you who have been following the work of this group the overall findings will have a familiar ring - particularly the reaffirmation that CCS can become cost  competitive with other low CO2 generation technologies with levelised costs approaching £100/MWh (real 2012 monies) by the early 2020s. Indeed, the report itself states "The contents of the Interim Report of the CRTF remain largely unchanged".

The report lays out 7 key next steps which are worth repeating:
1) Ensure optimal UK CCS transport and storage network configuration;
2) Incentivise CO2 EOR to limit emissions and maximise UK hydrocarbon production;
3) Ensure funding mechanisms are fit-for-purpose;
4) Create bankable contracts;
5) Create a vision for development of CCS Projects in the UK from follow-on projects through to widespread adoption;
6) Promote characterisation of CO2 storage locations to create maximum benefit from the UK storage resource;
7) Create policy and financing regimes for CCS from industrial CO2.

You could be forgiven if your first reaction is that this is all motherhood and apple pie but actually I think this illustrates a very important point - we are still in the very early stages of developing this industry and there are some big, fundamental issues still to be resolved.

For instance, consider transportation network configuration. Optimising this (or getting as near as possible to an optimum position) is a vital element of cost reduction. However, as with any network, there are all the issues that arise from the possibility of monopolistic action, and the problem of making "over-sized" transport systems (i.e. to some extent future-proofed) bankable.

I had to smile (wryly) at key step 2, having been on the margins of a project proposing an EOR element. As is well known, in its competition DECC selected 2 projects to take forward to FEED and potentially full development neither of which will enable EOR.

Step 6 is also an interesting one. Many storage locations, especially those that might be candidates for EOR are licenced to private organisations. How these organisations are incentivised to characterise their holdings for CCS potential is quite a question. I shall follow this aspect with interest.

The Task Force will now disband but it recommends the establishment of three "national leadership groups" to take forward its recommendations:
1) A UK CO2 Storage Development Group;
2) A UK CCS Commercial Development Group;
3) A UK CCS Knowledge Transfer Network.

As well as the 7 key steps noted above the report outlines a further 26 supporting steps. I sha'n't go into detail here - suffice it to say that many of the headings begin with "Ensure" or "Facilitate" or "Continue". 'Tis quite a read.

Ideology and Energy Efficiency Decisions

Ashutosh Jogelekar has penned an interesting article in Scientific American discussing how one's political position may affect energy efficiency purchases (the post is repeated by Rod Janssen in Energy in Demand). Broadly, he suggests that "liberals" will make EE investments based (at least partly) on an ideological stance whereas "conservatives" are more likely to be persuaded by economic arguments and, indeed, may actually be put off by environmental messaging. If the studies that produced these results are to be believed then there are lessons to be learned by the environmental lobby - beating the environmental drum - even if long-term economic rationality is on their side - may not be effective.

More on Shale Gas

In his latest Energy in Demand blog, Rod Janssen reposts a blog piece by Nick Butler in the FT.  In it, Butler argues that shale gas is here to stay and that the pragmatic thing to do is to recognise that reality and work with it to manage supply, demand, economics, environmental impacts and the like. He cites Exxon's decision to build a $10bn LNG export facility in Texas as a sign of big money demonstrating confidence in the industry.

I suggest that there's a lot of truth in what Butler is putting forward. The economics of energy supply will trump environmental concerns in the end - whether the latter are expressed as an ideological stance or a long-term economic one - and it is the potential get-out-of-jail-free (or at least cheaply) card for HMG and its bodged energy policy. Watch this space!

Another Capacity Doomsayer

A couple of days ago the FT (sorry, cannot give you a better link - I've reach my limit for the month!) reported that yet another senior energy industry figure was warning about an electricity capacity squeeze looming. This time it was Sir Roger Carr, president of the CBI and chairman of Centrica. Slightly ironic the latter one, isn't it, given that it was Centrica who pulled out of the JV with EdF to build a new nuclear station at Hinkley Point.

Potential For Massively Improved Reverse Osmosis

The world needs potable water. One source is sea water desalinated using reverse osmosis. The downside of doing this is the energy intensity of current systems. Now Lockhead Martin has announced a patent of a material they call Perforene (essentially graphene) which they claim allows water flow at 100 times better than current reverse osmosis systems. Their announcement doesn't spell out what "100 times better" actually means but I have seen it interpreted as requiring a 100 times lower pressure differential. I have to say I'm a little sceptical about that, but I hope I can be convinced. It would be some breakthrough if this material really does perform in this way and industrial size application become viable.

CO2 @ 400 ppm

Sorry about putting "CO2" in the title line of this post. The chemist in me hates not being able to use proper nomenclature (I suppose I could have spelt out the words). Worse still are those people who, when they have the capability to make the 2 a subscript, still fail to do so. OK - one minor rant over.

Some figures have a certain totemic value to them and 400 ppm CO2 is surely just such a one. I am, of course, referring to the announcement from the Scripps Institution that a 24 hour average of 400.08 ppm CO2 has been measured at Mauna Loa. No matter where on the "climate change by anthroprogenic CO2 debate" spectrum you are, to see such a rapid change in one component of the atmosphere must be of concern. And if you are convinced that a significant proportion of global warming and climate change is indeed produced by anthroprogenic CO2 then you must be very worried that mankind in staring down a rather nastly looking barrel.

New Environmental Fight Looming in Sussex

The FT reported the other day that Cuadrilla is planning some exploratory drilling at a site in West Sussex. The FT's headline called the company "fracking firm Cuadrilla" which is a little bit naughty as there is no evidence that in drilling for oil, which is what this latest adventure is about, Cuadrilla will involve fracking at all. However, pressure group Frack Free Sussex is already on the case - "If they find any oil or gas, they'll frack"; "They're going to have a big fight on their hands". Dealing with single issue pressure groups like this one is extremely difficult - I know, I've just been on the receiving end of just such a group's protest on an entirely different issue (no names, no pack drill). Reasoned argument can very easily go out of the window. We should be very thankful that we live in a country where people may raise concerns freely but often the wider context is forgotten, or pushed aside. No doubt many members of Frack Free Sussex use oil or gas; I bet the majority practice wasteful habits; they are probably concerned that the UK as a whole retains its position of relative energy security; but as long as production is not in their back yards these considerations may be quietly ignored.

Dimming Solar

The FT today reports that new solar power installations in Europe fell from 22.4 GW in 2011 to 17 GW in 2012. This is quite a steep decline. Is it a signal of the end of Europe's leading role in PV? The FT suggests that the focus now could be on China, the US, India and Japan. Interesting that there are a couple of BRICS featuring in that analysis. Surely as the technology becomes more affordable it will be developing nations that really benefit.

Nobody Wanted To Be Elected

On Thursday I exercised my electoral right and wandered over to our local polling station to cast my vote in the elections for members of Surrey County Council. There were 4 candidates on the ballot paper. What did I know of them? Very little. In the run up to the election I received 1 piece of literature and 1 visit from a party member (both from the same party). Did nobody wish to be elected? How does one choose between these anonymous, faceless non-people?

What Is Happening At DECC?

What is going on at DECC? Not so long ago John Hayes departed as minister to be replaced part time by Michael Fallon. Then we learned that Jonathan Brearley is leaving. And now it appears that Ravi Gurumurthy is also going. This has the potential to leave the Energy Bill and EMR in tatters. I have hinted before that I have concerns about the capacity market mechanisms and, to be frank, I still think this looks like a dog's breakfast. Is it problems with the design of EMR that has precipitated these latest departures? I don't have an inside track any more but perhaps it's time to start stock-piling those candles!

Who Would Be A Saver?

I've just been sorting out this year's ISAs for House Management and myself. Being a cautious fellow I like to have cash available for emergencies so I've tended to use cash ISAs first and only gone into equities when there has been residual spare capital. However, the cash rates available are so dire that this year the full whack for both of us has gone into equity ISAs.

I have to say, I don't think life is going to become any easier in the short, or even medium, term. Did you notice the nasty little squib in George Osborne's recent budget whereby he will now allow the Bank of England to "look through" the inflation figures and target other variable such as growth? This looks to me very much like our Georgie boy saying " Hello savers. Guess what? I have a nasty state borrowing and debt problem. I can't default - that's just unthinkable. I can't really take the austerity route (what I'm doing at the moment is fiddling around the edges) - that's politically untenable. So what I've decided to do is let inflation off the leash so that the value of my state debt is quietly eroded. Unfortunately that means the value of your savings will be eroded, too. Tough". Basically what is going to happen (actually, it's already happening) is that there's going to be a transfer of wealth from savers to borrowers. And guess who is the biggest borrower of them all? Yup, the government.

So, the wrong side of 60 I may be but there is going to have to be a little bit of raciness in my life. Cash holdings may be stable but they are losing value - with equities there's just a chance of some value gain.

The footnote to all this is that the equity ISAs that we already hold have performed somewhat differently. They are both in the money but I placed the majority of House Management's dosh into income funds whereas I put some of mine into growth opportunities. House Management is doing somewhat better than me!

Schizophrenia in the Energy Saving World

DECC's recently published wave 5 of its public attitude tracker makes for some interesting reading. While 80% of those surveyed said that they think about energy saving behaviours, 67% admit to, at least sometimes, boiling the kettle with excess water, 52% leave lights on unnecessarily and 52% leave the heating on when they go out for a few hours. Support for renewables is relatively high, 76% supporting offshore wind for instance; but views on nuclear are mixed with 40% support rising from 37% in the previous wave. All this suggests to me that a coherent message is not getting across - and certainly coherent thinking is not taking place. I'm not sure (actually, let's make that a firmer statement - I don't know) how to change this situation. Ideas anyone?

Housing Issues

There has been plenty of chatter of late about the Thatcher legacy. Much of it has been highly partisan and somewhat ill-informed but one aspect struck a chord - housing policy.

I have heard it suggested that the "right to buy" policy was a major success of the Thatcher regime. In that it expanded asset ownership to a much wider tranche of the population then the assertion has some truth. I do find it somewhat galling, still, that as a rate-payer I was essentially subsidising these purchases - but then any public expenditure is made with what is ultimately private wealth captured by the state or other public bodies. What I believe Thatcher failed to do was put in place the mechanisms to ensure that building of social housing, or affordable private housing, continued. This is one reason why we have a new housing crisis upon our hands.

What put these thoughts into my head was the ludicrous suggestion that permitted development rights should be temporarily relaxed to allow extensions of up to 8m depth to be constructed without the need for planning permission. The suggestion is that this will kick start the construction industry - which I doubt - and will provide much needed family space. The latter is just bonkers. All it will do is create bigger houses that are even further from the financial grasp of many potential buyers.

This has all bubbled up in the context of a local discussion about affordable housing development and, in particular, the use of exception sites (allowing building in the Green Belt for local affordable housing only). I am not a fan of green field/Green Belt development but these exception schemes should at least be considered. There are good social cohesion arguments to be considered among others.

Has The Reseach Really Not Been Done?

I read in a recent edition of Building 4 Change (don't you just hate the trendy marketing use of a numeral instead of good old fashioned word?) that BRE is about to embark on a study of solid wall properties to assess heat loss before and after insulation, and the behaviour of occupants. Has this research really not been done? Have thousands of homes been insulated under CESP without a reasonable understanding of the heat loss reduction expected? Or did DECC have a pot of money it didn't know what to do with?

Ding Dong And All That

I think the BBC got it wrong with their Ding Dong decision. The campaign to promote the song is being driven, I believe, by simple nastiness so why can't the BBC say so. What's wrong with stating that the song comes from a much-loved film and is appearing in the chart because it has been hijacked by what most people will agree are a bunch of unpleasant so-and-sos with unpleasant motives?

By the way, I was no supporter of Mrs Thatcher. In my view her governments got some things right but they got others horribly wrong. However, what I think about her politics is one thing; acting like a little ******* is another.

After Fanny Mae and Freddie Mac - Georgie Os?

How can George Osborne be so timid on the tax and spending front and so cavalier when it comes to credit? His scheme for subsidising home ownership is, in effect, HMG (and ultimately you and me) buying stakes in private homes. And these are homes being purchased by the people who, self evidently, can least afford them. Am I being daft or is this not the way the US got into their disasterous sub-prime fiasco a few years ago?

Marchant Joins Doom Mongers

So Ian Marchant is also warning us that the lights might go out. There is an implied criticism of legislators in what Marchant says - and in my post of a couple of weeks ago I said that HMG had failed to put in place proper incentives for generators to build new plant. However, Marchant is being somewhat disingenuous. The start of this county's value chain is its energy sources - first primary fuels and next, inter alia, electricity. Marchant knows this. Other generator bosses know this. Is there not a collective moral duty on them to ensure that the rest of the country does not suffer because of their failure to build new plant?

Not The Greatest Of Pictures

It's not the greatest photo' but I was so pleased to spot a leopard in the wild during our recent Sri Lankan holiday.

Should Electricity Utilities Vertically Integrate?

I have been through the "nationalised industry is privatised and disaggregated only to re-aggregate at a later stage" cycle so I was interested to see that Bain & Co have recently published a short piece on how utilities should evaluate the benefits of vertical integration.

Sadly I was rather disappointed. Admittedly it was advertised as a "Bain Brief", and brief it was. Bain consider just three motivating factors: avoiding transaction costs, hedging against volatility, tapping different profit pools. Not surprisingly they show that under many circumstances integration does not add significant value through these drivers in an piece of analysis that any half decent MBA student could have produced.

I rather expected more from a top strategic consultancy.

New Gas Plant - Why Is This Suddenly News?

So Alistair Buchanan thinks the UK urgently need new gas generators. Why this sudden flurry of angst? There have been pretty good demand forecasting models knocking around the UK for ages. And we've all known about the likely effects of the LCPD for years. Furthermore, the retirement of nuclear plant has been pretty easy to predict. So it's been obvious (and even pointed out in this ill-informed blog) that "something had to be done" to avoid a generation squeeze.

The good old CEGB had plenty of things wrong with it (it employed me, after all), but it did manage to build a reasonable size of plant margin. The privatisation market solution has undoubtedly driven out costs but it would appear that HMG and its advisors have failed to ensure that the right incentives are in place to promote a sensible replacement programme.

So are we going to have a second dash for gas and blow the CO2 emissions targets, or should we be looking forward to a few winters with brown-outs?

An ACE Approach

Still catching up I'm so glad to read this in the edie bulletin. The consequential improvements idea is something that has been on the energy conservation agenda since before I joined the Energy Saving Trust a good number of moons ago and still CLG is being dog-in-the-manger about it. I have referred before to that wierd and wonderful place "Planet Pickles" and I remain amazed at some of the bizarre decisions that come from his Department.

If this country is going to be serious about CO2 emissions reduction then everyone, but everyone, will have to play his/her part - including extension builders. It's a no-brainer and the sooner CLG minions and Mr Pickles understand this and act accordingly the better.

So, well done ACE for taking this whole debacle to judicial review. In the past Andrew Warren and I have not necessarily been eye-to-eye on things energy saving but in this case the action is bang on.

Interesting Micro-Wind Turbine

Catching up after my holiday I've only just come across this piece in edie about the Urbine.

What Vince says about advantages of vertical axis turbines over more conventional horizontal ones in built-up areas seems to make sense. It will be interesting to follow the testing.

One thing, though. Why the references to windmills? There's no milling going on. Let's do our bit to preserve the diversity of the English language!

Just Smile

I've just returned from a holiday in Sri Lanka - well organised for us by Sri Lanka in Style.

One of the features that will long remain with me is the fact that all around one there were generally smiling faces. Many of the people we encountered are very poor - us middle-class Brits were considered most wealthy - and yet everywhere there were beaming grins. An ex-pat friend suggested that the moan gene does not exist in Sri Lanka  - we winge about our well-loaded, privileged lot and they are just happy.

I am going to try to meet them half-way. This blog will still feature the odd rant or two but out in the real world I shall try to smile, be happy with what I have, not even grumble about our politicians (that'll be a hard one), and generally be nice to folks. Would it not be a good thing if we all aimed to do that?

Green Deal Addendum

Senility is catching up on me! In my previous post on the Green Deal I meant to make mention of the up-front assessment fee and the likely interest rate. By the time that my fingers had started hitting the keyboard I completely forgotten that I was going to comment on these aspects (maybe I was dwelling too much on the gin and tonic with which I was going to reward myself).

Whatever, a post by Rod Janssen has now reminded me. Rod's post, or rather the Observer article he quotes, pretty much covers what I was going to say which is that both the factors outlined above are additional brakes on Green Deal uptake. For anyone with a slightly complicated proposal, or a marginal one, the assessment fee of anywhere between £99 and £175 could be a significant disincentive. And the quoted interest rates - seemingly in a range from 6.5% to 9% - are hardly enticing. If you've got enough equity in your propoerty it would probably be cheaper to extend your mortgage (at, perhaps, 5%). Why go down the Green Deal route, paying more and, as the Observer article points out, possibly having further hassle if and when you sell your property?

One final thought - why is everyone so quiet about ECO?

Circular Economy

I've just read a piece from Nick Warburton's blog about the circular economy. Nick's piece opens: "Those of you following developments in Davos, Switzerland last week will probably be aware of an incredibly timely and thought provoking presentation that underlines a growing issue with immense ramifications for the UK economy". Needless to say I'm afraid I haven't been following developments that closely and I'd even missed the fact that the Ellen MacArthur Foundation had launched a report on the subject at last year's Davos shindig.

The subject being - the circular economy.

In essence what's being discussed is a closed loop system - which philosophically has great attraction but will require some radical mind-set changes from an awful lot of people. In their second report the Foundation suggests that the circular economy relies on five founding principles:

Waste is food;
Diversity is strength;
Energy must come from renewable sources;
Prices must tell the truth;
Thinking in terms of systems is key.

So you can see why I suggest that we're in paradigm shifting territory here.

It's an easy read - but stimulating. I suggest you try it.

Will the Green Deal Fly?

The Tyndall Centre's VERD project has issued an interesting report to coincide with the official launch of the Green Deal. Essentially the report reiterates what may of us know already - energy efficiency is seldom the primary motivating factor in home refurbishment (when was cavity wall insulation ever sexy?). Specific events, such as the need for a boiler replacement, or major life-stage changes, such as building an extension, prove to be the trigger for associated energy efficiency improvements in many cases. George Chrissochoidis, a co-leader of the project, said "Decisions to renovate are rooted in the need to improve the quality of life at home, rather than any burning desire to be energy efficient".

This doesn't mean that home renovators won't take up Green Deal offers as part of their improvement package but it does rather fire a shot across the bows of Green Deal providers. They are either going to have to be seen as trusted contractors for multi-faceted projects that include Green Deal elements or they are going to have to dovetail (as subbies?) with renovation contractors. Reputation will be all.

Will the Cloud Prevail?

A couple of Cloud developments have come to my attention recently. The first was an announcement of the coming of Mega offering hugely more free storage than any other service I've come across. The second was a lot of noise about Dell's Project Ophelia which is clearly going to depend upon Cloud resources. In between, there was a post from Dick Eastman, a well known American genealogist, musing upon the pros and cons of Cloud storage. Dick says he uses the Cloud to back up his data (I bet he has a lot) but that he also keeps a physical backup. I have a lot of sympathy with this view. At present I don't use Cloud storage for my genealogical research, although I have used Dropbox for file sharing when working with colleagues on projects. To rely solely on the Cloud one is putting a lot of faith in a rather remote provider! Mind you, this traffic has given me pause for thought. All my genealogical data are backed up to an external hard drive and nearly all the source material is also on paper - but it's all in the house so there are a number of common mode loss scenarios that would be disasterous. I think I may just follow Dick's example and store a set remotely. And I don't mean on any of the "dedicated" sites such as Ancestry or Genes Reunited. These services worry me with respect to (a) picking up details of living relatives and (b) misappropriation and misuse of my research. I have suffered from both in the past, when I was somewhat more naive and cavalier, and it's not something I wish to have repeated. So, the Cloud will be useful but I don't see it as a panacea for all.

E-book or Paper?

Last summer I acquired a Kindle and took all my holiday reading on it - really helpful as I normally pack 4-5 books for a 2-week stay. It was also brilliant for down-time while I was a volunteer driver at the Olympics. So far, I've only used it for novels - I have an unwritten rule, seldom broken, that I will not reread novels because there's so much that's new out there. However, I still buy good old paper when it comes to non-fiction. I was therefore interested when two separate posts on the eboook vs paper debate crossed my screen.

They come from Nicholas Carr and Josh Catone. Both make some good points, though I think both are also driven by nostalgia and one wonders what attitudes will be like when this generation is no longer in the ascendancy. Much has been made of the economic differential - ebooks do tend to be priced below the physical artifact, and it's easy to see that publishing costs will be lower, but the ebook price-point is often not that far below paper (is the margin consequently much higher?).

I have some sympathy with the arguments about beauty and attachment. I purchased Umberto Eco's "The Mysterious Flame of Queen Loana" a few years ago and I cannot imagine an ebook being a suitable substitue, for instance. Conversely the latest novel I have read is Patrick deWitt's "The Sisters Brothers" and I cannot believe that I lost anything by reading it on the Kindle; I will not read it again, I see no reason to have a copy cluttering up my book shelves (already groaning and in need of extension) and the only real downside is that I cannot give it to someone else.

Two other books that I've purchased in the last couple of years are second-hand: William Bodham Donne's (my great great great grandfather) "Essays on the Drama" and Catherine Bodham Johnson's (my great grandmother) "William Bodham Donne and His Friends". Both books have hand-written dedications by their respective authors on the fly-leaf. Somehow, possessing WBD's Kindle (had they been around in his day) would have nothing like the same allure.

Finally, I mentioned still buying physical non-fiction. The main driving force here is the ease of dipping in and out, referring back and forward, and using a book for research or study. Ebooks just don't do this for me. Now some may argue that it's just that I haven't learned how to do it efficiently with the electronic version but I just know that I find it so much easier to hold three or four positions in a paper book with my fingers so that I can rapidly cross refer. 'Nuff said.

Horseburger

The rumpus surrounding the burger contamination episode continues. Much of the noise is coming from people unhappy with the current state of affairs within the food surveillance authorities. But is this really the area to be attacking?

My first thought when all this arose was "Well, they're cheap burgers, what do you expect?". The profit motive is always likely to cause supermarkets to aim to drive down the cost of their goods, and to encourage producers to similarly minimise the cost of their ingredients and to maximise the efficiency of their processses (hence the delights of mechanically recovered meat etc.). In such a scenario someone, somewhere is going to try to cheat.

The reputational damage that supermarkets are likely to suffer when problems such as this are revealed should be sufficient for them to put in place good traceability procedures. How did Tesco fall down? Did they think that there was little risk of a problem being discovered, or did they just take a corporate eye off the ball?

Whatever, I suggest that the clamour for regulation goes too far. Sure, let's have spot checks to keep traders honest but I wouldn't want the question of getting "what it says on the tin" to distract from ensuring food safety which to my mind is where the authorities should be concentrating.

And if anyone is really concerned perhaps they should learn to cook with raw ingredients and not buy cheap, processed junk.

Who Needs A New Charger?

An article in today's Grauniad reports that in a 3 month trial O2 found that 82% of customers purchasing a HTC One X+ were willing to do so without a charger. I have to say well done O2 for setting up the trial. I have long been irked that one can pack one's old mobile up and send it away to be stripped down and parts recycled but not the charger (not that I very often change my 'phone - ludditism rules!). There must be recharger mountains all over the place.

So this is one small victory for resource efficiency. 'Tis far better not to keep upgrading you 'phone in the first place, of course, but one has to start somewhere.

Leaner and Wiser?

I see that Greg Barker claims that the solar industry has become leaner and wiser as it navigated its course through the last couple of turbulent years. I wonder whether that's true of the Government and DECC who oversaw the recent changes?

Putting my snide comments aside, however, I do think that there is now a relatively stable platform upon which solar may be developed. Now we need a good large-scale electricity storage system.

M&A - Good or Bad?

It's interesting how one is sensitised to certain stories. Just the other day I was reading a discussion from Bain and Co which suggested that, on average, M&A activity is value-additive. Today comes the news of Tom Albanese's departure from Rio Tinto because of two disasterous acquisitions.

Of course, we all know that hard cases don't make for good laws - it was simply the juxtaposition that struck me.

The Bain study contains a lot of sense - as one would hope. It suggest that there are a few important facets that characterise successful M&A approaches:

1) Frequency. The more experienced a company is in doing M&A deals the more likely it is that the deals will be successful. You might argue that this is self evident. Practice makes perfect. Failure will tend to dissuade companies from repeating their M&A ventures.

2) Materiality. The more the market capitalisation of a company comes from acquisition the better it performs. This is less self evident but maybe it's a success breeds success issue. If a company is known for good deal-making then the deals and funds will come its way.

3) Developing a Repeatable Model. I guess this is why the above two points are pertinent. If a company has a good strategy and ensures that it's M&A activity is informed by that strategy then the model is a long way to being repeatable. Bain also note that thorough data-based due diligence, careful integration planning and detailed planning and execution of value-capture are attributes of successful M&A led organisations.

It's a good read.

And what of Rio Tinto? Well, in looking at the Alcan acquisition one of the comments I've read simply says "Rio didn't do its homework". What was that about thorough data-based due diligence? I have seen, first hand, how "getting the deal done" can take over from a cool rational look at value. The numbers can become scary and the logic gets bent just to "win" the prize (a bit like "winning" WWI). From what I understand of the Mozabique coal assets deal, again it looks as though Rio did not understand what they were getting themselves into. This suggests that Albanese and those around him were not asking the right questions.

It's a salutory lesson to anyone reliant on stock values - which includes anyone with a pension plan.

The Devil's Punchbowl

I thought I'd step out from my usual subject area for once. We had a cracking walk around the Devil's Punchbowl on Sunday so, for anyone wishing to grab some fresh air in SW Surrey here's where we went:

We parked up (eventually - it was busy - great to see so many people taking the air) in the National Trust car park and headed across the grass towards the nearby viewpoint but cut off right when we reached a wide path going in that direction.

As we came to the trees we forked left through a kissing gate then almost immediately took a path to the left going downhill. We kept to this path through woods for about 3/4 mile as it descended into Highcomb Bottom.

At the base of the valley we passed through another kissing gate and after a couple of wiggles on the path turned right through yet another kissing gate onto a narrower path which drops down to a stream. After crossing over the stream we climbed up out of the dell, passing a youth hostel on our right and took the next left turn down a wide track past Gnome Cottage.

Just after the cottage we crossed a cattle grid and reached a stretch of more open countryside. We followed the track for about 1/2 mile until after a right then left bend we reached a fork. Here we bore left and ignoring the track that joins on the right a bit further on carried straight along a tree-lined track over another cattle grid.

Finally we reached a tarmac lane where we turned left and then right downhill beside a long cottage with PV panels on the roof. At the bottom of the valley we crossed the stream again and up a steep track to Ridgeway Farm. We carried on along Hyde Lane ignoring the track to the right, eventually passing Upper Ridgeway Farm.

The road then dipped down and at the bottom we took a bridleway to the left which gradually rises up between banks to another gate. Through this we pressed on upwards for quite a way (perhaps 1 3/4 miles) much of it following a line of power cables. At the top we came out on the edge of the escarpment with a splendid view across the bowl.

Continuing along the rim of the bowl we eventually reached another gate and barrier by a small parking area. Here we took a left fork, continuing around the edge of the bowl soon arriving back at the viewpoint near the car park. Great - all finished off with a scrummy slice of lemon cake in the NT cafe.

Try it!

Passivhaus Struggles in UK

A recent report from the NHBC Foundation has highlighted the fact that in the UK there are just 165 Passivhaus buildings whereas in Germany the number stands at over 20000. With the heating load in a Passivhaus generally coming out at about half that required to meet minimum Building Regulations standards there is a huge CO2 emissions gain to be made here. So what's the problem?

The report highlights three key areas:
1) Social. The report argues that most UK building is speculative whereas there is much more self-build in Germany, utilising prefabricated kits. Also it suggests that Germans have a much greater propensity to concentrate on high product specification and attention to detail.
2) Political. Germans are more environmentally aware and active. Local governments (e.g. cities) often promote, or even mandate, Passivhaus standards.
3) Economic. The premium over building to minimum standards in Germany is not that great (3 to 8%). Although few data are available for the UK the perception is that the differential here is greater. Financial assistance is also much easier to obtain in Germany.

There are some important messages for DECC and DCLG (who seem to spend their time making their web presence harder to negotiate) in here. There need to be greater inducements to individuals to go for high specification homes, there need to be stronger pressures on the building inductry to offer such homes and Part L of the Building Regulations needs ratcheting up even further.

A Fracking Good Time Will Be Had By All?

DECC's announcement on December 13 that the moratorium on hydraulic fracturing was to be lifted has spawned a flurry of comments - so I thought I'd join in.

This announcement follows the earlier publication of DECC's "Gas Generation Strategy" which purports to address the importance of gas as a feedstock for a low carbon economy (meaning lower than a coal-fuelled one, I guess). Among other things, the strategy proposes
(i) encouraging the construction of up to 26GW of new gas-fired power plant by 2030;
(ii) subsidising R&D into CCS;
(iii) focusing on the development of shale gas reserves in the UK.

On the latter, the strategy lists a number of steps to be taken by DECC, including
(i) setting up an Office of Unconventional Gas and Oil aimed at providing a one-stop-shop for an efficient regulatory process;
(ii) improvement in DECC's development policy and guidance to ensure that onshore licensing arrangements complement long-term shale gas production;
(iii) opening up a dialogue with interested license holders to explore what changes to the licensing regime are necessary;
(iv) further consultation rounds on the environmental implications.
This all seems a bit like DECC bending over backwards to aid the fracking industry - coupled with the likely bringng forward of a special tax regime to incentivise and stimulate shale gas production.

At the macro level, shale gas or no shale gas, up to 26GW of new gas-fired power generation looks set to bust the UK's target for a largely decarbonised grid by 2030 - unless they are all fitted with efficient and reliable CCS and I have my doubts that this will happen. How much of the required gas could be from indigenous shale sources is open to considerable doubt. The British Geological Survey has been commissioned by DECC to estimate how much might be available. Initial reports suggest that it will conclude that the Bowland basin has reserves roughly 17 times the known remaining North Sea reserves. How much will be economically recoverable is another matter.

There's also been a fair old push back on the risks of seismic activity being triggered and of water contamination. For sure these have been massively overstated by some pressure groups and good technology should be capable of dealing with the latter. However, one could argue that one leaking well is one too many.

I guess what I'm trying to say is - no matter how much hot air is generated by the fracking debate, the big issue is the continuing reliance on gas-fired power generation. I think we're sleep-walking to a +4C world and whatever that entails.