Hill+Knowlton Strategies

Yesterday’s Energy and Climate Change Committee report on consumer engagement with energy markets made for interesting reading. From a PR perspective the section on media reporting on energy costs was particularly compelling. The rising cost of energy and impact of ‘green’ policy has been one of the hot topics of 2012 – capturing the attention of the trades, broadsheets and the tabloids alike. And for a sector that’s traditionally not the topic of pub chat, this is the year that the country got talking. With squeezed wallets and fluctuating weather conditions, combined with the challenge of global warming and carbon reduction, the public is taking notice.

Depending on your newspaper of choice you will likely read very different views on how serious our energy challenge is – both in terms of dwindling resources, and environmentally sustainable sources. Yesterday’s report states that “It is likely that consumers get a lot of their information about energy issues from the media.” So with increased, and often emotive, attention now focused on energy it becomes even more important to know where our media stand on the issues, and crucially – how accurate their reporting is.

The Energy and Climate Change Committee is troubled by concerns raised over media reporting on energy matters. The report points to several witnesses who have suggested that media reporting of the cost to consumers of DECC’s environmental and social policies may be misleading. The Carbon Brief says that a series of newspaper articles have overstated the current impact of green policies on energy bills, either through error or selective research. Scottish Renewables suggested that the media preferred to rely on figures that fitted with their editorial line on energy and climate issues – relying on “unverifiable leaked reports or skewed research by think-tanks and individual consultants”. RWE npower said of media reporting, “Very often, it is a case of ‘not letting the facts get in the way of a good story’”.

The Committee wrote to the print media requesting responses to the evidence it has received on media reporting of these issues. Whilst only 6 of the 17 publications replied, the answers are telling. The Sunday Times decided its coverage has been “very balanced”, focused on the science, while The Financial Times put responsibility with the reporter. The Daily Telegraph and The Sunday Telegraph responded that the costs of green energy were “hotly disputed” but that they reported “all sides of the debate”. The Daily Mail and The Mail on Sunday acknowledged that “mistakes are occasionally made” – hmm…

One national newspaper responded that they were “uneasy that a Committee of the House of Commons appears to be asking a newspaper to justify its reporting on a particular issue based on vague, partisan criticisms from lobby groups with an interest in the issue”. That same paper failed to print a letter from the Committee’s Chair highlighting factual inaccuracies about an article on the effect that investment in renewables would have on consumers’ bills. No coincidence then that such disdain comes from the paper with perhaps the most supportive line on fossil fuels, with anti-rhetoric towards wind energy? I’ll leave it you to work out the paper in question…

Of course, in the fast paced world of journalism mistakes from time-to-time are inevitable. But the Government must do everything in its power to make facts and figures on the cost of going green transparent. It is all too easy for the media to hide behind confusing and conflicting data so they may follow an editorial line that misguides an already bewildered public. Renewable technologies and environmentally sustainable practices are a necessity not a choice for our long-term energy future. Isn’t it better that now the public’s attention is caught they get a full, accurate and honest picture?

Much of the focus on yesterday’s IEA World Energy Outlook was on the US’ increasing access to oil and gas reserves derived from fracking. At the FT, Guy Chazan and Ed Crooks focused on how the shale ‘revolution’ will redraw our energy landscape but noted that regulation threatens the sector’s growth. Fiona Harvey at the Guardian warned that the US becoming the world’s biggest oil producer by 2017 could lead to huge increase in greenhouse gas emissions. Commenting in the Independent, Michael McCarthy suggested that while the findings of this year’s IEA World Energy Outlook may look exciting to economists, they are “distinctly depressing” to anyone concerned about climate change.

Whilst all very interesting, these findings and commentary weren’t hugely surprising. This has been a year where shale and fracking have dominated the energy agenda, alongside carbon reduction targets and energy interdependence. But one theme I thought striking in the IEA’s 2012 report that we haven’t heard much on was water and the challenges brought by the energy industry’s increasing thirst.

Today, the energy sector accounts for 15% of the world’s total water use. The IEA predicts that power generation and biofuels output underpin an 85% increase in the amount of water consumed through to 2035. This growth comes in an increasingly water-constrained future.

The report indicated that water use could become increasingly challenging for unconventional gas development and power generation in parts of China and the US, India’s water‐intensive coal‐fired plants, Canadian oil sands production and maintaining reservoir pressures to support oil output in Iraq.

Water is used for resource extraction (oil, gas, coal, biomass etc.), energy conversion (refining and processing), transportation and power generation. In a review of the associated literature the Belfer Center notes that water, like energy, is a commodity but with very different characteristics. Water is almost always local where energy tends to be more of a global sector.

Constraints on water availability are becoming a crucial consideration affecting the reliability of existing operations within the energy sector, which the IEA warns will introduce additional costs. In the power sector for example, technological developments have enabled advanced cooling systems to operate with less water, but this benefit comes at additional cost and reduced plant efficiency.

The water industry itself is energy-intensive, consuming electricity for desalination, pumping, and treatment of wastewater. So the question of energy and water’s relationship comes full circle.

With all this in mind, perhaps we should be looking at water’s impact on future energy supply a little more closely.

Paralympic high jump has to be up there among the most amazing feats of the human body. Seriously, it’s amazing!!

Last night, half of team E+I made it over to the Olympic Park, only an hour and a half behind schedule. Since I already wrote a blog about energy and the Olympics, for the Paralympics I’ll keep it brief and share a few highlights of our evening instead…

Following the roaring success of my Jubilee inspired fact-based blog (well I learnt a few facts at least..!), this afternoon I felt inspired to forage for some energy based facts about the topic du jour; the Olympics.

Apart from EDF’s rather cool real-time energy usage graphs, and a collection of blogs on the Games’ sustainability credentials (here’s a rather good one that will be wishing they had Chris on tap for witty blog titles!), this actually proved harder than I anticipated. You probably already know that London’s Olympic Park houses the world’s first recyclable stadium, and you may have seen Timeout’s infographic of facts, but did you know that all athletes competed in the nude at the ancient Olympics? Thought not. Entertaining to know, but not exactly relevant to the E+I blog content! Here are a few other (kind of energy related) facts you might not have come across:

• In the ancient Olympic Games, the Olympic flame was ignited by the sun and then kept burning until the close of the Games. The flame fist appeared in the modern Olympics in 1928 in Amsterdam, with the Olympic Torch relay starting in 1936. According to this blog, the entire Olympic Torch relay in 2012 consumed the equivalent of 4,966 kilowatts, which is the same as a 40KW bulb burning for 124,158 hours, or just over 14 years.

• 200 kilometres of electrical cables – enough to stretch from London to Nottingham – were laid in two six kilometre tunnels built under the park, allowing 52 overhead pylons to be removed.

• 265km of utilities networks were installed across Olympic Park.

• The Olympic Park’s wind turbine will produce enough power for 1,000 homes.

• Over 4,000 trees, 74,000 plants, 60,000 bulbs and 350,000 wetlands plants were planted in the Olympic Park – the largest planting project ever undertaken in the UK.

• 20% of the Olympic site’s energy is from renewable sources.

• Michael Phelp’s energy consumption was said to comprise of 12,000 calories a day to get him to the Gold in 2008’s Beijing Olympics. Typically, the strength/power sports athletes (like weight lifting and shot put) eat the most, intaking between 2,800 and 6,000 calories a day, whilst gymnasts and divers need a mere 2-2,500. In ancient Greece apparently the athletes mostly ate cheese.

• At the first modern Olympic Games in Athens in 1896, silver medals were awarded to the winners and bronze to those coming in second. This isn’t an energy fact, but it is an industrial fact and therefore still highly relevant to E+I!

• Great Britain is the only nation to have won at least one gold medal at every Summer Games. Not an energy or industrial fact but I’m feeling patriotic. Please can we have one this year too?!

On 22 May 2012, the Government published its draft Energy Bill – you can read my colleague Chris’ analysis of the key points here. The landmark piece of legislation is intended to establish a legislative framework for delivering secure, affordable and low carbon energy. Ahead of its expected introduction this autumn, the Energy and Climate Change Select Committee are currently scrutinising the details of the Bill. As part of this inquiry, yesterday the committee held a public evidence session with key representatives from the energy industry.

The first session comprised of Sara Vaughan, Director of Strategy & Regulation for E.ON UK; Keith Anderson, Chief Corporate Officer of ScottishPower; and Ian Marchant, Chief Executive of SSE. They were followed by Vincent de Rivaz, Chief Executive Officer for EDF Energy; John McElroy, Director of Policy and Public Affairs at RWEnpower; and Sarwjit Sambhi, Managing Director Power Generation at Centrica. Each group were asked the same questions, centred on Part 1, Chapters 1-7 of the draft Bill. The particular focus was Contracts for Difference (CfD), the UK’s investment incentives vis-à-vis other markets, and the proposed Emissions Performance Standard.

KEY POINTS

• Industry must find a common voice: It quickly became apparent that the key industry players have divergent views on what is needed to optimise the UK’s energy market. From whether the Energy Bill is needed at all, to ministers’ role and responsibilities, to the need for capacity mechanisms, some clear differences in position were set out. SEE’s Ian Marchant described himself as being at “one end of the industry”, acknowledging substantial differences of opinions with his competitors. Tim Yeo MP, who chaired the session, stressed that the more industry is able to find agreement, the more likely their views and points will be accepted by Government.

• One thing they do agree on is transparency: If one word stood out in each of the sessions, and by each witness, it was the desire for transparency. Keith Anderson of ScottishPower was particularly forthright in his desire for transparency and the creation of a robust long-term framework to achieve investor confidence, create jobs, and ultimately restart the UK’s economy. Vincent de Rivaz from EDF Energy stated that the Government has a clear responsibility to ensure fairness and transparency.

• The UK is an attractive investment market: Those giving evidence do not believe incentives on renewables lead to excessive return on investment. SEE’s Ian Marchant stated that without market mechanisms, a mixed generation portfolio simply won’t be realised. However, he added that there is not currently enough liquidity in the wholesale electricity market to support CfD mechanisms. RWEnpower’s John McElroy voiced concern for clarity over budgets and how the Government intends to manage the levy control framework.

• But the current period of uncertainty must be resolved as quickly as possible: Concerns over slippage on the timeframe were raised by Sara Vaughan from E.ON UK. The lack of detail in the Bill and a centralisation of decision making power among ministers were perceived as a risk, compounding uncertainty in the market and therefore investor confidence. In the second session, EDF Energy’s Vincent de Rivaz, reiterated the need to maintain momentum and ensure Government sticks to its timetable.

• The counterparty issue must be resolved: The key industry players had previously registered their desire that the Government act as the counterparty so as to ensure CfDs are legally robust, with the power to raise money. However, it was noted that there seems to be hesitation on the Government’s part and potential problems with standards of State Aid set by the EU.

• There is no agreement on emissions performance standards: Dan Byles MP began his question in the second session by suggesting that the first session’s witnesses were in agreement over Emissions Performance Standards, but was quickly caught out by Centrica’s representative, Sarwjit Sambhi, who had attended both. Sambhi agreed with SEE’s Ian Marchant that the standards were unnecessary, but Sara Vaughan thought quite the opposite. John McElroy agreed, noting that gas has a key role in the transition to a low carbon economy, so certainty around emissions performance is vital.

CONCLUSIONS

The current state of the energy market in the UK is one of uncertainty. Until a clear and comprehensive framework is in place investors will remain shy, and if timeframes are not met there is the possibility that confidence will ebb away. To this end, industry believes that the Government must move swiftly in its reforms and be open in its processes. There is much to be clarified and worked through, and as John McElroy noted: the devil is in the detail. One thing is clear – if the industry wishes to see swift reforms they must be forthright on the issues they agree on, presenting a united voice wherever possible.

WHAT THE MEDIA HAVE TO SAY

• The Financial Times (Pilita Clark) - Energy groups attack ill-defined reforms
• The Daily Telegraph (Emily Gosden) – SSE attacks secrecy of nuclear subsidy talks

And so the Jubilee weekend is finally here. Have you hung out your bunting and stocked up on Pimms?

Here at H+K we thought the festivities made for a good excuse to engage in a little cross-team bonding. So last night we held the inaugural Financial Services, Internal Comms and Energy Social Team (FINSEST) event – a Diamond Jubilee Quiz!

Skipping over the fact that my team did spectacularly badly (taking home the Queen topped silver ‘wooden’ spoon prize), it was an excellent evening. Since it’s Friday and the bank holiday weekend is fast approaching I thought I’d share a few snap shots. We were joined by some very special guests after all…

Before you scroll down to take a look, here’s a few comparisons of the UK from the year our good Queen took the throne:

• Let’s start with an energy one (it will keep Chris happy!). At 228 million tonnes, 1952 was the peak of the UK’s coal production. Scroll forward 60 years and our country’s last coal mine is on the brink of closure. The last six decades has seen a revolution in energy policy across the globe – the realisation that our Earth is not an infinite resource and that mankind is not-so-slowly destroying the planet has fundamentally changed the way our energy is sourced and will be sourced for generations to come. It’s actually quite incredible to think about the changes Queen Liz has witnessed when it comes to keeping the lights on.

• The same month of Elizabeth II’s coronation PM Winston Churchill announced that the UK had become the third country to own an atomic bomb. Apparently we currently sit on about 225 warheads. As the BBC notes, the future of the UK’s nuclear deterrent is regarded as one of the main points of tension between the Conservatives and the Liberal Democrats in their coalition arrangement. Quite a topical one then.

• Average property prices in the UK are 86 times higher now than in 1952. Ouch.

• In October 1952 tea rationing came to an end. Tea rationing?!! Can you imagine anything worse? Horrendous. Tea (in my prize possession – the West Wing mug) is my salvation the morning after our quiz debauchery. The UK Tea Council reckons that today us Brits drink 165 million cups of tea daily, that works out at a mere 60.2 billion per year! Though I’d say roughly half of that is drunk by our very own Alexandra Da Cunha.

• On a more serious note, lets get back to energy. 1952 saw the great smog disaster across London. Causing up to 12,000 deaths, the tragedy was the instigator of the Clean Air Act, which gave local governments the authority to help finance the conversion of home owner’s  coal-fired heaters for use of ‘cleaner’ sources of energy such as gas, oil, smokeless coal, or electricity. Gradually over the years of Elizabeth II’s reign moves have been made to regulate emissions but clearly much more needs to be done. Over the next 60 years how will political and industry leaders work together to answer the biggest challenge of our generation?

• Speaking of challenges, it appears that my colleague Scott over in Change & Internal Comms has beaten me to it and already blogged about last night’s quiz. He doesn’t have the photos to rival mine, but why not continue your Friday procrastination and check it out all the same: The fourth floor quiz.

Now for those photos…

For those of you who couldn’t join us on the day, here are a few snapshots of our fantastic speakers and audience from D2 Energy.

I encourage you to read Chris’ blog on the key learnings and to join our LinkedIn group where the conversation continues…

Our very own Simon Whitehead kicks off the day

GE's Katrina Craigwell and Statoils Erik Haaland discuss the age of storytelling on our panel discussion

James McErlean shares the latest insights on getting the most from LinkedIn

Our audience listening intently

Keynote speaker Carla Buzasi talks us through her experiences as Editor in Chief of the Huffington Post UK

Energy themed cocktails reward our speakers and delegates after a long day of learning!

It’s undeniable that digital tools and social media are changing the rules of the game for a whole host of industries. But how are they impacting and influencing one of the most changeable industries out there: energy?

Energy is increasingly an issue that gets people talking. Talking round the dinner table; but also talking on Twitter, Facebook, blogs; through images and videos; through any means they can.

So how do the companies and individuals at the heart of the conversation participate, respond to, and shape it? It’s a question so pertinent, so interesting, and with so many answers, that we decided to dedicate a whole day to it.

This Thursday 26 April H+K’s Energy & Industrials team are hosting D2 Energy, a private conference on digital, specifically for the energy sector. And we’ve got a stellar line-up to explore with our audience how some of the industry’s leaders are addressing the opportunities and challenges that social media provides.

Google’s Paul Coffey will be demystifying Google+, our own Candace Kuss will show us how to make the most of 140 characters or less, and LinkedIn’s James McErlean will look at the power of connecting energy brands to the right audience. Our attendees will leave armed with tools and tips on how to use the key social media platforms with confidence and finesse.

We also have some fantastic case studies for you to learn from. Erik Haaland, Senior Consultant at Statoil, and Katrina Craigwell, Digital Marketing Manager at GE’s Ecomagination, will discuss the ‘age of storytelling’. Which?’s Nikki Whiteman will address empowering consumers via social media. H+K’s Digital Strategy Director, Brendan Hodgson will provide an overview of the Elgin spill. And jetting in from Texas is Tim O’Leary, VP of Communications at O’Briens Response Management, who will give us a few lessons from PIER Systems’ role in responding to the Macondo oil spill.

We’re delighted that Richard Sargeant, Director of Performance and Delivery at Government Digital Service, will be with us to discuss digital’s role in public affairs.

And if all that’s not enough we’ve got the Huffington Post UK’s Editor in Chief, Carla Buzasi, for our keynote, looking at the impact of digital channels on news gathering and journalism.

Oh and we’ll throw in a few IGNITE case studies and a panel discussion so you can do some of the talking too.

With energy themed cocktails at the end of the day (my personal favourite is The Climate Changer, complete with a windmill straw!), you’ll be well rewarded for your attention and time.

Can you afford not to join us?!

Request an invite today by emailing me at suzannah.greenwood@hkstrategies.com – name badges are being printed as I type so the clock is ticking…

Hill+Knowlton Strategies‘ Energy and Industrials team are delighted to reveal Demystifying Digital (D2), an exclusive, invitation-only event specifically for the energy sector.

D2 Energy is one of the first sector-specific events to be held in an ongoing series presented by H+K Strategies. The series looks at digital tools and their impact and influence on communications, bringing together social platforms, interactive communications experts and great case studies with leading industry figures to provide practical insights.

Held on 26 April, D2 Energy will focus on the energy sector and how social media and digital tools are changing the rules of engagement for energy firms with many important stakeholders.

Some of the highlights from the agenda include:

• Keynote from Carla Buzasi, Editor in Chief of the Huffington Post UK, on the impact of digital channels on news gathering and journalism.
• Which?’s Consumer Action Producer, Nikki Whiteman, discussing ways that consumers have been empowered by social media.
• A panel discussion on the ‘age of storytelling’ with leading energy firms including Statoil.
• Presentations from the key platforms, including LinkedIn and Google+
• Breakout sessions to discuss the regulation of digital channels.
• An Ignite case study on Statoil’s use of LinkedIn to target the informed elite.
• Networking cocktails.

Further speakers from the leading platforms will be announced shortly. For information or to request an invitation please email me at suzannah.greenwood@hkstrategies.com.

Spaces are limited and allocated on a first come first served basis. Please note that this event is not open to the general public, but you can follow the event on Twitter using #HKD2