Hill+Knowlton Strategies

Overhead High Voltage (HV) cabling has long been the subject of debate and argument. It was at one such debate that I met Mike, business development director at Costain, and we talked about the rationale behind undergrounding HV cables in tunnels. Mike very kindly offered to show me the current undergrounding operations that Costain and partners are building under the streets of our Capital for National Grid and so it was that I spent a very interesting afternoon in North London.

Willesden Junction is not a place I knew in London and after emerging from the Bakerloo line it became immediately clear why. It is a curious mix of light industrial, train and transport depots and some residential streets, but that made it the perfect starting off point for the 7.2km 3m diameter tunnel that would end up somewhere near St John’s Wood and meet a 13km 4m diameter tunnel that had begun in Hackney.

Map of tunnels at Visitor Centre

The excellent visitor centre, which was about to be raided by the second school visit of the day, contained some fantastic visualisations of the tunnelling work including this real time drilling chart and full size mock up of the tunnel.

Tunnel Mock-up at Visitor Centre

But where the school tour ended was where our tour began and after donning the correct personal protective equipment and having our safety and orientation training, we went on site to witness the production line efficiency of a tunnel boring team, only days from reaching the target ‘breaking through’ point.

Accompanying us was Richard, who made sure we were safe during our visit and after first looking at the impressive muck conveyor belt, which carries tonnes of London clay vertically up the massive main shaft, we then descended the 50 metres or so to the floor of the shaft.

Main shaft to access tunnel

There we caught our train, one of several that continuously run between the tunnel boring machine (TBM) and the main shaft to ferry the precast concrete rings that make up the walls of the tunnel and the tonnes of clay back in the other direction and of course the people that work on this project. These trains take about 20 minutes to travel to the face and run like clockwork to ensure that they pass each other at the correct spot to ensure the TBM is constantly supplied.

Tunnel Boring Machine

The TBM has a crew of about ten, who work with production line-like efficiency. The process of fitting a 1.2m ring of concrete would take longer to describe than it would take to do, so here’s a two minute video showing some of the process (note: the camera shake when the blocks go in place gives you an idea of how big they are!).

TBM in action

It is an impressive thing to watch, and I genuinely felt privileged to have been able to join Mike and the team to watch this tunnel being built in order to futureproof London’s electricity supply. It is an ambitious project and indicative of the sort of large infrastructure investment the UK needs to make as part of the upgrade to our electricity grid, but also to support growth and investment in our construction and engineering industries. It will certainly bring some reality to my next conversation about undergrounding HV cables.

Joining the Energy + Industrials team only six weeks ago I thought it fitting that my first event on behalf of the team should be the Aldersgate Group’s: “Dissecting our Energy Future: Positioning the UK for Economic Success” debate. 

With some major announcements this week regarding the UK’s energy future, the discussion could not have been timelier. This week DECC announced that four project bidders were successful in the first round of its £1 billion CCS competition; Japanese company Hitachi signed a £700 million deal for Horizon Nuclear Power giving it the rights to build a new programme of power plants in the UK; and in the next few weeks, the government’s long awaited Energy Bill is to be published. 

Prior to H+K, I worked for a PR and comms agency  specialising in innovators in the green, cleantech and sustainability sectors. So, I should know a thing or two about energy and the technological innovations that could assist the UK in decarbonising its electric future.

The event featured a number of interesting speakers starting with Roger Bone, President of Boeing. Flying gets you from A to B, and very quickly to C (with C being CO2 emissions). While the aviation industry accounts for only 2% of global CO2 emissions, the industry is growing – and therefore the emissions it is responsible for are likely to rise as well. And, for that reason it’s looking to greatly improve efficiency and environmental performance as it comes under intense scrutiny from legislative structures that are pursuing greater global CO2 reduction targets.

I was also pleased to hear the passionate endorsement for investment in academic R&D and technological advancement by Mr. Bone, who informed the audience that the aviation industry could achieve zero net CO2 emissions by 2050. Boeing has already tested a 50/50 bio and kerosene fuel mix that could be operational within the next 25 years; it all sounds very promising.

Unlike Boeing’s five minute presentation however, the rest of the evening’s speakers were given just two minutes to convince the panel (and audience) that their technology would provide the answers to the bourgeoning question: ‘How will the UK secure its energy future?’ The key issues addressed were:

• Energy Efficiency-  According to Jim Skea  from CCC, the UK needs a 90% reduction in energy needed to meet its 2050 target of becoming carbon negative. Jim argued that producing energy from renewables is not enough: we need to change people’s attitudes. If energy production becomes cleaner, but we continue to use more of it, then in his opinion it becomes counterproductive.
• Offshore Wind- For Mike Rolls from Siemens, although not yet cost-competitive and still an immature industry, wind energy has huge potential in the UK. He endorsed this point by citing a Crown Estates report that was published in July, which concluded that production costs could soon reach £100 per MWh. The speaker reiterated that offshore wind forms part of our longer-term decarbonisation strategy and is not an answer on its own.
• Nuclear- Nigel Knee from EDF highlighted that nuclear is a zero emissions source of energy. However, he expressed the view that to make the industry a success, there needs to be commitment to a programme of stations rather than isolated projects. According to him, nuclear power could increase UK GDP by £5 billion a year and create around 32,000 jobs.
• Wave & tidal- Although Merlin Hyman of REGENSW gave an ardent speech about wave and tidal power, there wasn’t anything ground breaking. Other than highlighting that tidal currents are a constant source of energy supply and that combined wave and tidal power could provide up to 20% of the UK’s electricity demand, the industry currently remains underdeveloped and not cost-competitive.
• CCS- According to Jeff Chapman the UK’s CCS technological potential is huge, citing recent DECC figures that estimate the CCS industry could create around 100,000 jobs. However, the cost of CCS will only decrease when rolled out en masse and to do this investment needs to be in the trillions to capture the economies of scale that will make it a plausible solution.
• Shale Gas- The clear message from the shale gas supporter was that it is renewables and gas, not renewables or gas. The UK is currently importing around 50% of its gas and so he believes it is important to consider our shale resources regarding long-term security of supply (particularly as it’s estimated that Lancashire has 100 years of supply).

I have a personal favourite, but it’s unlikely to be cost competitive any time soon and does not have low-risk investment potential. But, I favour it merely because I’m a geographer at heart and like the promise of this ‘green’ resource (or should I say blue).

Although nothing revolutionary arose from the evening’s discussion it was good to hear recognition that we cannot just do without fossil fuels and simply find an alternative; fossil fuels will not be disappearing any time soon and we have a lot to thank (and perhaps curse them for). I consider there to be no ‘one size fits all’ model and so at a time of much confusion and lobbying for one source or another, scrutinising the tangible benefits of a multitude of possibilities for how the UK will ‘keep the lights on’ was quite refreshing.

There will be few on this fair isle (or elsewhere in the world) that have not witnessed something of the mania that has followed the nuptials of Prince William and Kate Middleton due to take place tomorrow. The media have been pouring over the details of the event – the flowers, the dress, the rehearsal, the security, the cost but few have so far looked at the power that will bring the event to life. Now before you ask I don’t mean love, but instead something far less romantic and far more practical - the national power grid.

I read with interest the release from the National Grid today which talks about the unique set of circumstances from which their team of forecasters are having to conjure an accurate forecast of demand for Friday. Without the sterling work of these forecasters the lack of an invitation for the former PM may not be the only brownout of the day.

Apparently the 1,000 MW surge forecasters are anticipating after the exchange of rings is equivalent to 400,000 kettles being boiled – so it looks like we’ll all be toasting the wedding with a cuppa rather than the traditional bubbly.

Bunting Cuppa

Personally speaking I probably won’t give over much of a welcome day off to watch the celebrations and so will give the forecasters little to worry about, but I’d like to wish the happy couple and the forecasters the best of luck!

As the saying goes, ’Trust is hard to earn and easily lost’. Equally its value is hard to quantify until it is lost (see the impact of GOM on BP’s brand value), which can sometimes make it difficult to invest in.

However, just because something is difficult both to do and then to test, does not mean we shouldn’t do it. As David Prosser notes in The Independent this morning the big six power generators have earned themselves an ignominious reputation, being less trusted than banks at the moment. That should be seen as a problem that needs to be addressed, not as an inconvenient truth.

One of the things that Ofgem has suggested in its reforms is that the big six sell off 20% of their generating capacity to increase competition and this is where the lack of trust could become a serious business issue. Just because customers have shown a reticence to switch in the past does not mean that an organisation who is very effective at communicating with customers and winning their trust will not come along and start to take share from the big six operators in the future. PA Cover Ofgem Announcement

These firms have a plethora of communications and policy issues to overcome at the moment, but a good start would be to simplify customer propositions, provide greater clarity about their operations, explain and educate about complexities of their business and engage in a better dialogue with customers and prospects. The low-carbon energy challenge in particular is one that I think most people would happily be more active in addressing and new-nuclear must now engage with a much wider group of stakeholders than it has until now to avoid the NIMBY reaction of people after the disaster in Japan.

First things first will be some research to test what has impacted trust historically and what influences different stakeholders trust.

What a busy start to the New Year it has been, so much so that my attempts to blog have been thwarted by a desire to see my wife for a little more than a handful of waking hours during the week.

With so much having happened, we thought it worthwhile taking a little review of January in the world of energy.

To The Moon

First off we had President Obama’s ‘Sputnik moment’ . His suggestion that America needed to seize the moment and take the lead in the technological race for dominance in renewable energy and sustainable technologies. His state of the union address was widely regarded as being well delivered, though his policies and narrative  have been called into question. Ultimately though I’m not sure the Sputnik analogy is an accurate one. Sure there is a long way to go for renewable energy technologies to become competitive with traditional sources, but in many ways the technology is available, it is the infrastructure and subsidy that needs to be set in order for renewables to ‘take off’. China moved ahead of the U.S. by adding a larger installed based during 2010 than anywhere else, by providing long term policies. The control economy will provide the sort of certainty that investors in the U.S. sadly lack, particularly as Congress missed the opportunity to provide long-term certainty and rolled over subsidy levels for just one year.

Like Rabbits

It was the Chinese and other ‘BRIC’ based investors who took the lions share of deal-making since the start of the year. Of course there was the BP Rosneft tie-up, though more on that later. As well we saw Petrochina take a stake in the Grangemouth assets of Ineos and Sinopec looks to extend its relationship with Repsol YPF in Brazil and CNOOC increase its interests in U.S. shale gas assets. 2011 is almost certain to witness a surge in merger and acquisition activity as the war chests are further swollen by rising oil prices and if the start of the year is anything to go by the BRIC players will be at the deal table as much as the traditional majors. The 3rd of February marks the start of the Chinese new year – the year of the rabbit – which if the year bears any resemblance to the well-known attributes of our furry friends could bode well for the M&A advisory community.

Creative Energy

So far at least it appears to be an excellent first quarter for many of the oil majors despite BP’s first loss in 20 years. Although the FT’s Lex column  was quick to criticise the lack of ‘creativity’ shown by the majors is addressing the longer term threats to their business model simply summarised as declining reserves.

It was this threat that was well in evidence in the results of PFC Energy’s annual Top 50 energy company ‘league table’, which was perhaps notable most for the state owned companies not on the list. This list is compiled based upon market capitalisation of listed organisations, but the many NOCs missed off the list are the power brokers of the industry and it seems somewhat incomplete without them.

The Tip of the Iceberg

This is especially true in light of BP’s recently inked deal with Rosneft. Of course the AAR consortium will do all it can to ensure that this deal never sees the light of dayas it seeks to protect its investment in TNK-BP, however, assuming this does go through this will provide an example of one of the more creative ways that IOCs will be directing their strategies in moving forward (remembering my earlier reference to Lex). Unfortunately though this sort of investment represents a communications challenge on the same sort of scale as the Gulf of Mexico spill that BP struggled through last year. Exploring the Russian arctic is certain to redraw battle lines with environmental activists and a wide range of stakeholders that believe this represents an unacceptable risk. I saw Bruce Parry’s programme last night about the impact of the Alberta Oil Sands on the lives indigenous people of that region. I expect there to be many similar programmes in the future and BP will no doubt be making preparations for reputational fallout, or so we hope.

Wakey, Wakey!

BP also took the limelight with its recent release of its 20 year outlook , an annual event, which has been closely watched by the industry for years. The results as you may expect are not wholly surprising, but I did find Bob Dudley’s frank response to projections on the reduction of carbon emissions refreshing. “Overall, for me personally, it is a wake-up call”, is how he referred to the less optimistic view of political commitment to reducing emissions. What this means for BP’s policies remains to be seen.

In light of the EU carbon trading debacle and the reported €30 million plus theft that is alleged to have taken place, BP’s pessimistic projections are looking fairly accurate. The system for trading credits remains down, with no immediate end in sight. For a trading platform to work traders need liquidity and trust. Both have been killed off and will take a long time and a lot of cost to rebuild. Industry calls to speed up the process of creating a single platform for Europe have so far not generated any concessions. Based on the performance of the UK trading platform, which appears to have far better standards of governance and compliance than some of its European peers, London may prove a popular home for the EU system.  

Pumped Up Prices

The retail sector in the UK has also been the subject of many headlines since the start of the year as prices at the fuel pump and retail electricity and gas prices have also risen. It will be interesting to see whether an OFGEM price review will yield any results (unlike previous inquiries) and if the Chancellor will capitulate and halt plans to raise fuel duty. The Coalition government has since Q4 GDP figures were released (and to some extent beforehand) been challenged to unveil plans to support economic growth and this duty may well have to be conceded if there are no specific policies in the pipeline.

Egypt

Finally would like to sign off this post by wishing that our friends, colleagues and clients in Egypt stay safe in these troubled times.

After watching the $30bn Blowout – A Money Programme Special looking at the BP Spill last night, I was compelled to watch Newsnight after a trailer gave the news about Councils planning to turn off street lights to save money as the public sector cuts start to bite.

Judging from the reaction in this morning’s print media, most notably the Daily Mail (up to 75% of councils dimming lights for new Dark Age) and Daily Telegraph  (Half of Councils cut back on Street Lights) this is an issue that concerns many, although personally speaking (and as a person who is predominantly a pedestrian or cyclist) I don’t see this being too much of a problem from a security or safety perspective. Who knows, maybe this will see a new dawn of slower, safer driving on unlit roads as a result.

It strikes me as a move that may well save money and save energy, although you can bet that those against will be flagging the first fatality, tragic though it will be, as evidence that these plans need to be rolled back at the sake of a few more council worker jobs. Overlooking of course the all too frequent fatalities on Britain’s roads and perhaps the other contributory factors. 

What was also interesting about last night’s programme was that this could be an issue which will strain the relationship of the coalition parties in the weeks and months to come. This will be an interesting one to watch played out. Am also wondering what will be the impact in terms of freeing up grid capacity. I haven’t seen anyone yet try to quantify the impact in terms of Megawatts, but would be interesting to know.

As conference season kicks off with the Liberal Democrats in Liverpool, there’s something in particular that I am looking for in the multitude tweets and updates from colleagues and others that are on the sidelines this week. That is the coalition intentions with regards renewable energy subsidies and support.

On Thursday this week the FT tells us that energy minister Chris Huhne will be launching the world’s largest wind farm. The London Array will eventually consist of 341 turbines generating 1,000 megawatts of electricity off the coasts of Kent and Essex in the South East of England, paid for in part by Masdar, the Abu Dhabi government’s initiative to encourage development of green technologies. No doubt the launch will be subject to a fanfare celebrating the UK’s leadership in renewable technologies. However, as Christopher Booker’s editorial in yesterday’s Daily Telegraph suggests there will be many others lamenting the cost that subsidies place upon  energy users at a time that they can least afford it.

The next few quarters will be critical to the success of maintaining existing energy policy. As the spending review is rolled out and cuts begin to bite, taxpayers may well start to question their inflated energy bills, which the DECC expect to increase by 33% by 2020, and their commitment to some of the most ambitious renewable targets in the developed world. Let’s hope for the coalition’s sake that this is not compounded by a harsh winter.

So following Larry Hagman’s (Dallas’ JR Ewing) switch to alternative energy with American solar panel company, SolarWorld, it seems solar is the hot topic of the summer!

Everywhere I look this week in the media there is a story on solar and its benefits, but is it really a friend for the future or will it turn and bite us?

A neighbour of mine has had solar panels fitted for a while now and seems quite content with them. I can see the benefit of using such a powerful natural resource as a source of power but would I put solar panels on my roof? Not likely to be fair and I’m sure I’m not alone in this view, although reports from BBC show that more than 2,000 homeowners have already had solar panels installed and are using electricity for free.

Now it seems the government has chosen solar as its new ‘thing’ and is creating cash incentives for people who generate their own power. As we saw with the car scrappage scheme, cash incentives seem to work in this country so I’m sure we’ll see solar panels popping up left, right and centre in the near future. But as they say, you don’t get anything for free!

Whilst we’re all basking in the warm glow that solar panels will give us free electricity and reduce our reliance on fossil fuels, folks across the other side of the pond are asking questions about the long-term environmental impact of disposing of solar panels. Erica Gies’ piece on The Guardian’s website discusses what impact making and disposing of solar panels has on the planet and our health and it’s quite an eye-opener. I hadn’t realised that solar modules contained so many potentially dangerous materials.

I guess there’s two ways of looking at this – we either embrace solar full on, knowing that there are risks but that solutions for recycling are being investigated and that we need to have alternative fuels for the future or we wait, see how solar progresses in the next few years and hope that manufacturers find safer ways to make and dispose of panels and probably get left behind the rest of the world. Whichever way you go, it looks like solar is here to stay – all we need now is the sun!

Now if this was April 1st, I would have sworn that the story about the Volkswagen Beetle powered by human waste was an April Fools’ Day joke. However, it’s not April and this is not a joke. As reviewed by The Telegraph’s Harry Wallop, the clever people at GENeco, a Wessex Water subsidiary have converted a good old VW Beetle and made it run on biogas.

How we get and use fuel is an ever increasing hot topic with fuel companies looking at how wind and solar power can power our homes and car manufacturers looking at hybrid and electric engines. It seems we have become a nation obsessed with finding new ways of powering our homes and cars.

Personally, I think what we flush down the toilet is called waste for a reason and shouldn’t end up powering my car to the supermarket or the beach but you have to admit with an ever growing population – projections suggest UK population will exceed 65million by 2018 – it seems there will be an endless supply of ‘suitable materials’ that could be turned into biogas for many years to come.