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.

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

Which? The consumer affairs group today launches the Big Switch campaign, designed to get the more than six in ten households who have never switched their energy supplier to consider doing so. Featured today in The Mirror and The Sun the campaign is encouraging consumers to submit their (non-binding) interest in order to collectively negotiate a better deal from the large energy suppliers.

The timing couldn’t be better and the Which? team deserve credit for launching in the middle of a cold snap when interest in energy prices is set to peak again. It is also just days into the term of new Secretary for Energy & Climate Change, Ed Davey, who began his Cabinet career by suggesting his focus would be on enabling consumers to get a better deal from their energy supplier. 

Which? Has long been a trusted consumer brand and I remember blogging last year about CBI research around the Green Deal that showed Which? to be the most trusted brand by consumers looking for advice. This campaign is in my mind overdue and I hope that it will be successful. I’ve signed up this morning and it was dead simple. Congratulations to Which? for kicking it off.

They will though face an uphill struggle in encouraging consumers to make the switch if the latest research from Ofgem is to be believed. In a report available on the regulator’s website they review attitudes to switching and new devices aimed at simplifying bills. It’s clear from the opening of the report though that the vast majority of energy users fall within a ‘disengaged’ category of people who don’t understand their bill, don’t appear to want to understand their bill and/or don’t feel there is much value in better understanding their bill because ultimately they do not trust that their time and interest will save them money. As I mentioned the Which? campaign faces and uphill struggle, but they have made the right start. I also just noticed the first tweets about this from @whichaction and @whichconvo. This is encouraging because a campaign like this is made for social networks. A shame though that Facebook hasn’t also been engaged by Which? I did look for their page to show an example of what they are doing, but perhaps they are waiting for the new Facebook timeline to launch on 29^th February.

Either way don’t delay, expressions of interest need to be logged on the campaign site by 31^st March.

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!

H&K were fortunate enough to have the opportunity to host a very interesting event by the Confederation of British Industry (CBI)yesterday morning. The event was not only one of the first outings of new Director General, John Cridland, but also featured Secretary of State at the Department for Energy and Climate Change, Chris Huhne MP in one of his first outings since the launch earlier this week of his government’s Carbon Plan. The CBI used this event to share some insights about consumer attitudes toward ‘low carbon economy’ products and initiatives and from a communications perspective the conclusions gave some food for thought. First though some really useful stats from the CBI report entitled ‘Making the Consumer Case for Low Carbon’:

•  Three quarters of the UK’s greenhouse gas emissions are either directly or indirectly attributable to consumer actions (Sustainable Consumption Institute)
• Seven out of ten people feel a sense of responsibility to do something about climate change (Ipsos MORI, March 2010)
• 39% of respondents to Ipsos MORI said that ‘clear evidence of reduced running costs’ would change their purchasing attitudes toward more energy efficient products
• 83% of respondents either strong agreed or tended to agree with the statement that ‘companies have a responsibility to give consumers as much information as they can about the energy efficiency of the products they sell’.
• When asked about which sources of information they trust to provide reliable information about energy efficiency or climate change, 40% said Which? Magazine, 30% Government or Government agencies, 28% scientists, 16% action groups like Greenpeace, 16% manufacturers, 12% trade associations. 9% newspapers, 9% TV and 9% retailers/shops. There were striking differences between different age groups too.

So what was so interesting from a communications perspective? Well one of the overriding messages that Mr Cridland was sharing with the audience and his members was that they had a challenge to communicate better with consumers if they were to convince them that low carbon products were worth their consideration.

When the leadership of an organisation like the CBI starts to make statements like this it can feel like manna from heaven for a communications specialist, especially when they conclude by saying that this is about more than spin and offering worthy but premium priced alternatives, it is about creating compelling price points and standards that consumers can trust. I couldn’t agree more and so look forward to working with our clients to define compelling low-carbon propositions for consumers. With the launch of the government’s Carbon Plan, policy appears to at last be providing a relatively clear path for more investment by business in the low carbon economy. Let’s hope the joined up approach continues.

I’ll admit it. 

I didn’t want to go. 

Where, I hear you ask? 

Ecobuild. 

Nothing against sustainable construction, mind you.  It’s just I’m not a huge fan of the ExCeL centre, or – and I hate to say it – trade shows in general. 

But….

I was pleasantly surprised. Dare I say it, I even enjoyed myself.

This year’s event was HUGE.  Bigger than I anticipated, even though I did check out the website and peep some of the vendors sites before I went.  There were more than 1,300 exhibitors from the fields of design, construction and what Ecobuild calls “the built environment”.  Still not sure what that is. Seems a bit vague….but I think they mean people who sell and install things for inside your building…floors, toilets, plumbing, windows, etc.

So, why did I enjoy it?

1. I got to know a very cool company – REC Solar.

2.  I was thrilled to see what a huge presence solar was at the show.  Despite concerns around the government’s planned review of feed in tariff policy and what this could mean for the UK solar industry – all the big players were out in force. Go team.

It’s a solar bear…get it?!

3.  I got to get back in touch with my techie roots and play with phase change materials (PCMs for the uninitiated) – check out BASF and DuPont.  There was a great little demo centre called the Cool Workspace, which showed how PCMs can be used to create a more sustainable office environment by storing both heating and cooling, reducing the carbon footprint of buildings by up to 30%.

4.  The people. Yes, that old chestnut.  I was genuinely impressed with the huge range of people that were drawn in.  From the big corporate sales guys, to students, to apprentice builders, to eco-conscious consumers, to, er… models dressed as Canadian mounties (see below).  While most of the attendees were indeed more of the corporate ilk, it was refreshing to see that there was a noticeable representation from a huge range of people. 

As nice as it would be to preserve all the green space left in the world, that’s never going to happen.  Construction and physical development is a reality.  Even here on our little island, we’re expected to increase our population to from 61 million to 70 million in about 15 years.  Whether that growth is sustainable from a resources point of view or not is a different blog post, but that’s a lot of new housing, schools and hospitals. Let’s hope they’re built in a way that takes a lesson from Ecobuild.

Forgot to mention on our January energy round-up that we have welcomed a new colleague to our office in Houston, none other than former Bloomberg Bureau Chief Kimberley Jordan.

Kimberley joins as a Vice-President in our energy practice after more than 17 years in journalism and said:

“I am delighted that my energy knowledge and journalism background can provide clients with valuable insights that will keep them informed and prepared regarding policy decisions and industry shifts.”

Here’s hoping we can have her come and guest blog for the Energy & Industry blog very soon.

Speaking of which we will try to have Glen Hodgson’s view on the Heads of State Summit in Brussels tomorrow. The agenda was set to focus on energy, although Egypt is bound to come up.

Amid concerns that energy companies are enjoying widening profit margins at the expense of their customers, Ofgem has announced that it will launch a review into the retail energy market.

With British Gas, Scottish and Southern Energy, and Scottish power all announcing price hikes in recent weeks, resentment has been growing as many home owners struggle in a difficult economic climate.

This Tweet sums up the general feeling nicely:

While many have welcomed Ofgem’s decision, there has also been significant scepticism in terms of what the review will mean in reality. In truth, this is not the first time that the market has been investigated in this manner, and as a spokesperson for Energy UK said today:

“The review is the latest in a long line of investigations into the energy market in recent years and no previous investigation has found anything to concern the competition authorities.”

While Sara Vaughan, head of energy policy at Eon, today heralded the beginning of a new era of ‘interactive relationships’ between energy companies and their customers, consumer groups are more sceptical.

As Adam Scorer of Consumer Watchdog pointedly stated, energy companiues “do not feel the hot breath of competition on their necks”. With the market closed to new entrants as a result of the dominance of the ‘big six’, market structure rather than conspiracy and cartels seem to be to blame for consumers’ current predicament.

If this is the case, then Ofgem’s investigation will merely provide lip service to the public’s bitterness, and could ultimately prove a further irritation rather than a solution. Watch this space.

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.