Sharma ‘shunted to climate change role to woo Biden’
Boris Johnson put a cabinet minister in charge of the Cop26 climate change summit last week following a warning from Joe Biden’s team that there was no “heavy hitter” running the show.
In the first sign of the US president-elect flexing his muscles with the UK, Biden’s climate change pointman John Kerry complained before Christmas that if Britain wanted to be taken seriously it would need to get a grip on preparations for the summit, which Britain is hosting in Glasgow in November.
Alok Sharma gave up his cabinet job as business secretary on Friday to concentrate on Cop26 full-time. But his appointment comes after Johnson’s approaches to David Cameron and Theresa May last year were rejected.
Johnson’s response to the pressure from Kerry, himself a former presidential candidate, comes amid concern that the prime minister’s relationship with Donald Trump will damage relations with Biden, particularly after Trump’s supporters smashed their way into Congress last week.
A senior Tory said: “John Kerry phoned one of his old contacts in London and the message was relayed to No 10 that Cop is the thing Biden really cares about.
“If you want to have a relationship with him get serious about Cop and get someone serious to do it.”
Downing Street does not expect Johnson and Biden to meet until the G7 summit in June, but at least four cabinet ministers are planning to visit Washington in the coming months as part of a charm offensive to woo the new president and his team.
The Sunday Times
Get serious on nuclear plans, Kwarteng told
New Business Secretary Kwasi Kwarteng must ‘get his skates on’ and make 2021 the year the Government finally commits to building nuclear projects, the industry has said.
As he sits down to address his overflowing in-tray, inherited from Alok Sharma who left to focus on his climate conference role, Kwarteng has been urged to decide quickly – as the UK faces the threat of blackouts in the early 2030s.
Ministers are mulling plans to allow EDF to build the Sizewell C power station in Suffolk, as well as a separate project to create a fleet of mini reactors.
And plans to build a huge nuclear plant in north Wales are looking increasingly sketchy after Japanese firm Hitachi, whose subsidiary Horizon Nuclear was lead developer, said it was going to shut the project down.
Around 18.5 per cent of Britain’s power is generated by nuclear energy, but most reactors will be shut down in a few years.
Tom Greatrex, chief executive of the Nuclear Industry Association, said: ‘The clock has been ticking ever louder towards our clean power fleet of nuclear stations retiring. Without urgency in decisions, we run the risk of falling far short of the amounts of low-carbon power we will need.’
Peter McIntosh, at union Unite, said: ‘The Business Secretary needs to get his skates on. There have been too many false dawns.’
Of six sites earmarked for reactors, only Hinkley Point C, is being built. In mid-December ministers released the much-delayed Energy White Paper, in which they promised to make a final decision on at least one major project by 2024, meaning it might not be built until the mid-2030s.
The Government also said it was in financing talks with EDF for Sizewell C.
A Rolls-Royce-led project for half a dozen or more mini-nuclear reactors would also take 10 years.
A senior industry source said: ‘In 2021, Government has to get serious about the scale of the challenge and show how we’re going to get there – or tell the Prime Minister he’s way too ambitious.’
The Daily Mail
Hitachi pulls plug on Horizon nuclear offshoot
A project to build a huge nuclear power station in north Wales is to be wound down by the end of March, threatening hopes of its resurrection via a sale.
Japan’s Hitachi has told staff it will shut its Horizon subsidiary, which was to build a £20bn nuclear power plant at Wylfa on Anglesey, by March 31. That could scupper a sale of the site, despite interest from bidders including a US consortium of Bechtel, Southern Company and Westinghouse, and dent Britain’s clean energy aims.
Hitachi said in September it would not proceed with the plan, despite having put £2bn into it, but the haste to shut it down and dismiss remaining staff has sparked concern.
The Wylfa site is seen as one of the most promising for a new nuclear power station. Horizon also has plans for a plant in Gloucestershire, but sources said the company needed to remain solvent for several more months if it was to be sold as a going concern.
The Sunday Times
Cross-party bloc of MPs back action on sewage discharge into rivers
More than 100 MPs from across different parties are supporting a parliamentary bid to stop water companies discharging untreated sewage into rivers.
Philip Dunne, the Conservative chair of the environmental audit committee, is seeking in a private member’s bill to place a duty on water companies to ensure untreated sewage is not discharged into rivers and inland waterways.
The second reading of Dunne’s bill takes place on 22 January. It will require water companies to set out plans to progressively reduce their reliance on the use of combined sewer overflows (CSOs), which discharge untreated effluent after heavy rain.
Untreated sewage was released into English rivers more than 200,000 times in 2019, the Guardian revealed last year, suggesting the releases have become routine and their scale excessive.
Dunne said: “We have a significant number of MPs from all parties supporting the bill and 50,000 members of the public have signed a petition in support. Pressure is growing for water companies to fix the problem of excessive amounts of sewage being spilled into our rivers.
“The bill is acting as a catalyst for raising the profile of this problem and the government does appear to be recognising that.”
Water companies are given permits by the Environment Agency that allow them to discharge raw sewage into rivers via CSOs after extreme weather events, such as torrential rain, to stop water backing up and flooding homes.
More than 60 discharges a year from a storm overflow should trigger an investigation by the agency, but the Guardian data revealed that some storm overflows released discharges hundreds of times. The Environment Agency relies on water companies to self-monitor their CSOs.
Dunne’s bill would legally require water companies to be more transparent. If it became law, it would make it a legal requirement for them to publicly report on the number, condition, and quality of the sewage being discharged from CSOs and any other sewer catchment assets.
The Guardian
British Gas engineers to end strike with no breakthrough in dispute
British Gas engineers will complete a five-day strike on Monday, with no sign of a breakthrough in the dispute over pay and conditions.
Members of the GMB union walked out last Thursday and have been mounting socially distanced picket lines across the UK after being “provoked” into taking industrial action.
British Gas owner Centrica PLC said it had contingency plans to deal with the action, and was prioritising vulnerable households and emergencies.
The strike involves around 4,500 service and repair gas engineers, 600 central heating installers, 540 electrical engineers, 170 specialist business gas engineers and 1,700 smart metering engineers, said the union.
GMB national officer Justin Bowden said: “The only way for profitable British Gas to end this massive disruption they are provoking for their customers in the bleak midwinter is to take their outrageous ‘fire and rehire’ threat off the table.
“Instead of lashing out at its own workforce, who overwhelmingly rejected this plan and voted to take strike action, the company should look closer to home – stop threatening to fire the entire engineer workforce and enter constructive discussions with GMB.”
The strike follows a 9-1 vote in favour of industrial action by members of the GMB, which accused Centrica of planning to cut pay, terms and conditions under moves to “fire and rehire” employees.
A Centrica spokesman said: “We’ve done everything we can with the GMB to avoid industrial action.
“Whilst we’ve made great progress with our other unions, sadly the GMB leadership seems intent on causing disruption to customers during the coldest weekend of the year, amid a global health crisis and in the middle of a national lockdown.
“We have strong contingency plans in place to ensure we will still be there for customers who really need us, and we’ll prioritise vulnerable households and emergencies.”
Centrica said it has lost too many customers and jobs in recent years, adding that it is trying to protect jobs.
“If we are to avoid more job losses and continue, unlike most in the sector, to maintain a highly skilled team of engineers, employed directly by the company, these new terms and conditions are essential.”
“A very significant number of engineers striking will have accepted the new terms already,” it said, adding that four out of five of its workforce have accepted new terms, in which base pay and pensions are protected.”
PA Media
Environment groups question UK’s carbon capture push
Carbon capture and storage is a costly “distraction” that cannot be relied on to help meet climate targets, according to research published by two prominent environment groups that questions one of the key “green” technologies backed by Boris Johnson.
The UK prime minister has committed £1bn of public funds to help develop four CCS schemes in Britain by 2030 as part of his plan for a “green industrial revolution” and to reach net zero carbon emissions by 2050.
Mr Johnson hopes the UK can become a “world leader” in the technology, which involves capturing carbon dioxide from sources such as power stations and industry, and storing it in facilities including saline aquifers or depleted oilfields.
The government said CCS would create thousands of jobs and “ensure we can build back greener, cut carbon emissions, maintain security of supply and keep energy costs low for consumers”.
But campaigners at Global Witness and Friends of the Earth Scotland said a reliance on CCS, in particular to decarbonise the energy system, was “not a solution” to global warming.
They published a paper on Monday from the Tyndall Manchester climate change research centre that they said proves CCS has a “history of over-promising and under-delivering”.
CCS was first developed in Norway in 1996 but there are only 26 commercial projects in operation globally, none of which are in the UK or EU. To date most carbon capture has been used to extract difficult-to-reach oil.
Schemes under development in the UK include using CCS to reduce emissions from a gas plant and other industry in England’s Humber region and to produce low carbon hydrogen from natural gas in Scotland. However, project backers, which include oil and gas majors such as BP, Royal Dutch Shell and Norway’s Equinor, are still in discussions with the government over financing models.
Global Witness and Friends of the Earth Scotland argued that CCS still faced “many barriers”, including costs. “We cannot expect to make a meaningful contribution to 2030 climate targets,” they said, adding that “the cumulative emissions from each year between now and 2030” will determine whether the Paris climate goal to limit warming to well below 2C below pre-industrial levels can be met.
Even if such barriers were overcome, CCS would “only start to deliver too late” and would have to be “deployed on a massive scale at a scarcely credible rate”, the groups said in their study.
They are instead pressing governments to prioritise building more renewable energy generation and tackling the energy efficiency of buildings.
The Financial Times
Investors urge HSBC to stop financing fossil fuels
A coalition of investors is pushing HSBC to reduce its financing of coal assets as the climate-change debate moves further into banking.
A group including the European fund manager Amundi and London-listed hedge fund Man Group, co-ordinated by campaign group ShareAction, aims to table a climate-change resolution ahead of the annual meeting in April.
The group is thought to be urging HSBC to reduce its exposure to fossil fuels, in particular coal, in line with the 2016 Paris agreement, which aims to limit global warming to 1.5C.
The bank has already pledged to become a net-zero carbon emitter by 2050, although HSBC and Barclays are still the top two fossil fuel financiers in Europe, according to campaigners Banking on Climate Change.
The move will put corporate Britain — and the banking sector lenders — on notice that investors are increasingly focused on climate change at a time when the world is reeling from the Covid-19 crisis.
The Sunday Times
IEA chief: Net zero by 2050 plan for energy sector is coming
Our climate challenge is an energy challenge (writes International Energy Agency executive director, Fatih Birol). The energy that powers our daily lives produces three-quarters of global emissions. Making all of that energy carbon-neutral by 2050 is a Herculean undertaking for our economies and societies that goes well beyond simply setting long-range targets.
In the last year, many of the planet’s largest economies and companies have announced that they aim to bring their emissions down to net zero by the middle of this century or soon after. And if incoming US president Joe Biden follows through on his pledges, countries now accounting for more 60 per cent of global energy-related carbon emissions will all have stated net-zero ambitions.
The growing climate ambitions add to the significant momentum behind clean energy. Investors should take heed — making sure their portfolios are climate friendly is now a matter of risk management.
Today, I’m more optimistic than ever about the world’s ability to reach the goals of the Paris agreement — limiting the rise in global temperatures this century to well below 2C. Even the more ambitious goal of 1.5C seems less remote than it did a year ago.
But long-term targets alone will not put emissions into decline rapidly enough to reach net zero by mid-century. Nothing short of a total transformation of our energy infrastructure is required — a worldwide undertaking of unprecedented speed and scale. That calls for decisive action over the next decade. It would mean, by 2030, increasing electric cars’ share of annual sales from 3 per cent to over 50 per cent; expanding the production of low-carbon hydrogen from 450,000 tonnes to 40m tonnes; and boosting investment in clean electricity from $380bn to $1.6tn.
To drive the shift from targets to action, the International Energy Agency will in May publish the first comprehensive road map for the entire global energy sector to reach net zero by 2050. This will set out detailed analysis of what needs to happen across the global economy to recover from the Covid-19 crisis and put emissions on a path in line with a rise of 1.5C. The road map to net zero is vital ahead of the COP26 climate change conference in November when countries will set out their latest plans for cutting emissions.
We must ensure our collective aspirations can be turned into hard reality because promises, however well intentioned, can be broken. The UK and the Netherlands have set up domestic legal structures to hold governments of today accountable for delivering on their promises for tomorrow. But national approaches are not enough to achieve the change we need — we must think globally.
To read the rest of this article (subscription required) click here
The Financial Times
Green economy plans fuel new metals and energy ‘supercycle’
The global economy could be on the brink of a new commodity “supercycle” as governments prepare to use a green industrial revolution to kickstart growth following the coronavirus pandemic.
The price of commodities, such as energy and metals, have reached record highs in recent weeks despite the ongoing spread of Covid-19 and are expected to climb further as countries embark on plans for a green economic recovery.
Market experts, including US bank Goldman Sachs, believe the boom could echo the last “supercycle” in the early 2000s led by the sharp growth of emerging BRIC economies (Brazil, Russia, India and China).
“Covid is already ushering in a new era of policies aimed at social need instead of financial stability,” the US bank said. “This will likely create cyclically stronger, more commodity-intensive economic growth.”
Chris Midgeley, the head of analytics at S&P Global Platts, said “an unusual confluence” of global events had ignited a surge in commodity markets in recent months, but the trend was largely driven by growth in China.
Iron ore prices climbed to $176.90 a tonne shortly before Christmas, the highest since May 2011, and the market price for copper topped $8,000 a tonne for the first time in more than seven years. Global oil prices have climbed to 11-month highs of $55 a barrel with help from the Opec oil cartel.
“Construction sites are some of the few areas of the economy that have remained open, and in places like China the government has been trying to stimulate that part of the economy,” Midgeley said.
The fiscal stimulus plans outlined by countries – including the UK and the incoming Biden administration in the US – are likely to increase demand for metals and energy to build green infrastructure.
“Things like copper, nickel and cobalt are all likely to see a boost from the extra demand to build infrastructure. Even steel and petrochemicals will be needed,” said Midgeley.
A weaker US dollar, the currency used to trade most commodities, could allow prices to climb higher as demand grows.
Mark Lewis, BNP Paribas’ global head of sustainability research, said: “I’ve been in financial markets for 30 years now and I have never seen anything like it. It feels like any market you look at, investors want to buy.”
The next three decades are “likely to bring a supercycle in investments in clean energy infrastructure, clean transportation and everything else that is required to make the green transition possible”, he said.
Higher fossil fuel market prices could increase the appetite for low-cost renewable energy which will be even cheaper by comparison as fossil fuel prices rise, Lewis added.
Low-carbon energy will be even more economically attractive to major energy users in Europe thanks to record high prices for carbon permits on the EU’s emissions trading scheme, which reached €34.25 per tonne of CO2 for the first time last week.
However, higher fossil fuel prices could also tempt major oil and gas companies to invest in lucrative new projects by inflating the profits of existing oil and gas portfolios in “one last party” for fossil fuels, he warned.
“This is the dilemma for these companies. Any company will be interested in maximising returns from their existing portfolio. But we will be watching very closely for whether they start investing in major new projects. It will be a very interesting test of their commitment.”
The Guardian
Utility Week’s weekend press round-up is a curation of articles in the national newspapers relating to the energy and water sector. The views expressed are not those of Utility Week or Faversham House.