Subsidies that have driven the spread of large solar farms across Britain are to be scrapped under plans to stop the panels blighting the countryside. Energy companies that build solar farms currently qualify for generous consumer-funded subsidies through the so-called ‘Renewable Obligation’ (RO) scheme, and had expected to keep doing so until 2017. But the Department of Energy and Climate Change announced on Tuesdaythat it planned to shut the RO to new large solar farms two years early, from April next year. –Emily Gosden, The Daily Telegraph, 13 May 2014Lord Lawson hailed George Osborne as an ally in his fight to change the government’s energy policy. –Francis Elliott, The Times, 13 May 2014

Last week the House of Lords’ Economic Affairs committee revealed that appalling confusion and complexity is deterring vital investment in Britain’s energy industry. Today Lord Lawson of Blaby, who sits on that committee, tells The Times the coalition is not merely misguided on energy but “doesn’t have an energy policy” at all. His remarks will irritate ministers, as well-aimed criticism often does… What Britain lacks is politicians with the courage and vision to embrace it. –Editorial, The Times, 13 May 2014

For years now, this and previous governments have postponed the tough decisions needed to secure Britain’s energy supply for the future and make it affordable for business as well as domestic customers. What passes for a coalition energy policy is in fact a tangle of regulations, subsidies and incentives that is delaying investment, driving up prices over the long term and making blackouts a real possibility by as soon as next year. Britain’s lack of a coherent energy strategy is an emergency that will not go away just because of a short-term outlook of warm weather and long summer evenings. It is, as Dieter Helm, of Oxford University, told the Lords’ committee, a “very slow-motion car crash” that is already happening. –Editorial, The Times, 13 May 2014

They were crazy dreamers who dared to believe that oil and gas could be produced from beneath England’s rolling green hills. No one imagined that oil and gas could be fracked from almost impermeable shales buried thousands of feet below the surface. But Britain’s small onshore energy companies are now in the midst of a mini boom as they seek to capitalise on the new-found interest from investors to consolidate their holdings and raise external finance. Sceptics might suggest Britain’s shale gas companies are on the cusp of a bubble, with more investment being made before anyone is certain that the shale formations will yield commercially meaningful amounts of gas and oil. But bubble-type enthusiasm is essential to the success of any new technology. —John Kemp, Reuters, 12 May 2014

In the wake of the American shale gas boom and the resulting cheaper power, U.S. manufacturers have been moving their work back home from overseas, and now foreign manufacturers, especially from Europe, are moving their facilities to the U.S. While prices in the U.S. power market have fallen due to cheap natural gas, prices in Europe’s power market are much higher, lifted by subsidies for renewable wind and solar power projects. While a decade ago, American manufacturing jobs were flowing to China, this year, more than 50 percent of $1 billion-plus U.S. companies with operations in China are considering moving all or part of their production back home, according to Boston Consulting Group. –Meagan Clark, International Business Times, 10 May 2014

1) First British Shale Gas ‘Could Fuel Homes Next Year’ – The Daily Telegraph, 12 May 2014

2) Britain Pulls Plug On Solar Farm Subsidies – The Daily Telegraph, 13 May 2014

3) Times Leader: Wanted: An Energy Policy – The Times, 13 May 2014

4) Britain’s Shale Flurry: A Game Of Skill And Chance – Reuters, 12 May 2014

5) Shale Boom Attracting Manufacturing to The US From Overseas To Take Advantage Of Cheaper Fuel & Feedstock – International Business Times, 10 May 2014

1) First British Shale Gas ‘Could Fuel Homes Next Year’
The Daily Telegraph, 12 May 2014

Emily Gosden

Shale gas could be fuelling British homes for the first time by late 2015, under plans from fracking firm Cuadrilla.

The company is preparing to submit planning applications by the end of this month to frack at two sites in Lancashire next year.

Francis Egan, Cuadrilla chief executive, said that, if successful, it planned to connect the test fracking sites up to the gas grid, in what would be a milestone first for the fledgling British shale gas industry.

He also suggested homeowners hostile to fracking beneath their land should be entitled to only minimal compensation, if any.

Cuadrilla hopes to gain planning permission for its two sites, near the villages of Roseacre and Little Plumpton, in time to start drilling at the end of this year. They could then be fracked next summer “in a best case scenario”.

“After the initial flow test period, which is up to 90 days, if the flow rates look good then we would want to tie the well into the gas transmission system and flow it for a longer period to assess the flow rate over 18 to 24 months,” Mr Egan said.
The first shale gas could be flowing into the grid by the end of next year. Although quantities of gas from the exploratory sites would be relatively small, the step would be a symbolic first for the industry in Britain.

Just one shale gas well has been partially fracked in the UK to date, by Cuadrilla in 2011, with work halted when it caused earthquakes.

Cuadrilla, however, faces a number of hurdles if it is to proceed as planned at its new sites. As well as planning permission it must obtain numerous permits from the Environment Agency.

Industry sources fear any permission to frack may face judicial review challenge from environmental campaigners.

Cuadrilla could also find its optimal drilling routes blocked by hostile homeowners. The company intends to drill down vertically at each of its sites then out horizontally west for up to two kilometres.

It has signed agreements with farmers at each site allowing it to drill under their land – meaning at least some drilling will be possible – but not with all homeowners above the potential underground drilling area.

“If we were unable to get permission from householders we would have a smaller area, but we could still drill,” Mr Egan said.

Under current trespass law Cuadrilla would have to take hostile landowners to court to gain the right to drill beneath them, but the government is planning give companies an automatic right to drill.

Asked whether compensation should be paid to landowners, Mr Egan said: “I don’t think there’s any disturbance. If someone flies two miles above your house, do you get compensation?”
Full story

2) Britain Pulls Plug On Solar Farm Subsidies 
The Daily Telegraph, 13 May 2014

Emily Gosden

Green energy subsidy scheme will be shut to large solar farms as ministers attempt to curb blight to countryside

A solar farm near Diptford in the South Hams, Devon

DECC admits that the spread of solar farms has been “much stronger than anticipated in government modelling” and some have been sited “insensitively”. Photo: ALAMYSubsidies that have driven the spread of large solar farms across Britain are to be scrapped under plans to stop the panels blighting the countryside.

Energy companies that build solar farms currently qualify for generous consumer-funded subsidies through the so-called ‘Renewable Obligation’ (RO) scheme, and had expected to keep doing so until 2017.

But the Department of Energy and Climate Change announced on Tuesday that it planned to shut the RO to new large solar farms two years early, from April next year.

The decision follows an admission by ministers that far more projects have been built than expected, leading to an rising subsidy bill for consumers and increasing local opposition.

Greg Barker, the energy minister, pledged last month that solar farms must not become “the new onshore wind” and said he wanted solar panels installed on factory rooftops instead.

Although a separate, new subsidy scheme will be made available to large solar farms, it is expected to be far more difficult for solar farms to gain funding under the new regime.

Full story

3) Times Leader: Wanted: An Energy Policy
The Times, 13 May 2014

Muddled thinking on renewable energy and national priorities has left Britain with no clear strategy for powering growth and keeping the lights on

Last week the House of Lords’ Economic Affairs committee revealed that appalling confusion and complexity is deterring vital investment in Britain’s energy industry. Today Lord Lawson of Blaby, who sits on that committee, tells The Times the coalition is not merely misguided on energy but “doesn’t have an energy policy” at all.His remarks will irritate ministers, as well-aimed criticism often does. For years now, this and previous governments have postponed the tough decisions needed to secure Britain’s energy supply for the future and make it affordable for business as well as domestic customers.

What passes for a coalition energy policy is in fact a tangle of regulations, subsidies and incentives that is delaying investment, driving up prices over the long term and making blackouts a real possibility by as soon as next year. Britain’s lack of a coherent energy strategy is an emergency that will not go away just because of a short-term outlook of warm weather and long summer evenings. It is, as Dieter Helm, of Oxford University, told the Lords’ committee, a “very slow-motion car crash” that is already happening.

Like Heathrow airport, Britain’s power generation system is operating at close to capacity. The country has a capacity margin of just 2 per cent. Ofgem warns this could shrink to zero by the winter of 2015-16 if predicted gains in the efficiency of power usage are not realised.

With zero margin for error, power cuts are virtually inevitable. Britons are in fact becoming more efficient in their use of energy. Overall consumption has fallen slightly since the 1970s and markedly since 2005. A crisis looms despite this trend because of steadily declining North Sea output and the planned obsolescence of ageing power stations.

Estimates from Ofgem and elsewhere suggest that the UK needs between £100 billion and £200 billion in investment in new generating capacity and “smart grid” technology by 2030 to keep the lights on and minimise dependence on unreliable energy suppliers, such as Russia.

This investment has ground to a halt. Work has begun on just one new gas-fired power station in the past 18 months. British and foreign investors are deciding not to risk capital in what should be one of the world’s safest energy markets partly because of uncertainty caused by Labour’s pledge to freeze retail prices should it win the general election next year. The coalition is to blame, too. It has sown confusion with its varying commitment to expensive renewables subsidies, which have a direct effect on household bills but also on industry’s appetite for investment in new gas-powered generating capacity. It has given the competition and markets authority far too long (two years) to report on the pricing strategies of the big six domestic energy suppliers. Above all, it has failed to recognise the potential of shale gas.

America’s shale gas revolution has delivered gas prices two thirds cheaper than those paid by British consumers. British shale gas output may never approach America’s, but the Bowland basin with Sheffield at its centre is one of the world’s largest reserves of its type. Even so, not one new fracking application was received by the Environment Agency in the year after the government’s decision to allow the process to proceed. The reasons are clear. A screen of red tape deterring commercial fracking has been created by multiple agencies, chief among them the department for energy and climate change, the health and safety executive and the environment agency.

Scientists are working on energy sources that leave no soot and cool the planet. In the meantime there is gas, the “inescapable” transitional fuel, as Professor Helm has called it. Britain has it in abundance. What it lacks is politicians with the courage and vision to embrace it.

4) Britain’s Shale Flurry: A Game Of Skill And Chance 
Reuters, 12 May 2014

John Kemp

They were crazy dreamers who dared to believe that oil and gas could be produced from beneath England’s rolling green hills.

Small companies such as Alkane, Egdon, Cuadrilla, Dart, Island Gas, Newton and Star bid for and won Petroleum Exploration and Development Licences (PEDLs) in Britain’s 13th onshore licensing round held back in 2008.

Some of these firms were hoping to find small onshore oil and gas fields. Others thought money could be made from capturing the fugitive methane emissions from abandoned coal mines or by drilling into unworked coal seams and capturing methane directly from the source.

No one imagined that oil and gas could be fracked from almost impermeable shales buried thousands of feet below the surface.

But Britain’s small onshore energy companies are now in the midst of a mini boom as they seek to capitalise on the new-found interest from investors to consolidate their holdings and raise external finance. […]

A GAME OF SKILL AND CHANCENo shale gas has actually been produced in Britain yet. Only one well has been hydraulically fractured, at Preese Hall in Lancashire, and that triggered a series of small earthquakes in April and May 2011, leading to a moratorium on future fracking treatments that has only recently been lifted.

The political appetite for fracking on a large-scale remains untested, though the idea has received powerful backing from finance minister George Osborne and strong endorsement from a recent report by the House of Lords Committee on Economic Affairs.

“The UK will certainly feel the impact of the shale gas revolution. It has its own shale gas resource. The question is whether the UK is to be a producer or simply an importer,” the committee wrote, urging the government to streamline the permitting process.

Environmental groups remain staunchly opposed, and many communities object to large-scale oil and gas drilling. It remains unclear whether drilling firms will ultimately be able to overcome these obstacles.

Sceptics might suggest Britain’s shale gas companies are on the cusp of a bubble, with more investment being made before anyone is certain that the shale formations will yield commercially meaningful amounts of gas and oil.

But bubble-type enthusiasm is essential to the success of any new technology. The same criticisms could have been levelled at George Mitchell, who pioneered shale drilling in Texas amid much scepticism in the 1990s and early 2000s but is now hailed as a genius and one of the most influential businessmen of the late 20th and early 21st centuries.

“Businessmen play a mixed game of skill and chance,” as John Maynard Keynes observed. “If human nature felt no temptation to take a chance, no satisfaction (profit apart) in constructing a factory, a railway, a mine or a farm, there might not be much investment merely as a result of cold calculation.”

Shale pioneers in the United States, and now in Britain, all have something of the characteristics of the successful entrepreneur, including an obsession with commercial ideas that appear to have long odds.

Ultimately, if shale development proves successful, the small pioneering companies will sell their rights to established operators.

There is no guarantee of success for the industry as a whole or in individual licence areas. But if shale is eventually produced in large quantities and draws in more majors like Total, some of these early licence holders could become very rich indeed.

Full story

5) Shale Boom Attracting Manufacturing to The US From Overseas To Take Advantage Of Cheaper Fuel & Feedstock 
International Business Times, 10 May 2014

Meagan Clark

In the wake of the American shale gas boom and the resulting cheaper power, U.S. manufacturers have been moving their work back home from overseas, and now foreign manufacturers, especially from Europe, are moving their facilities to the U.S.

While prices in the U.S. power market have fallen due to cheap natural gas, prices in Europe’s power market are much higher, lifted by subsidies for renewable wind and solar power projects. European utilities have been decommissioning thousands of gigawatts from turbines in an effort to minimize losses.One of the latest examples of a European company moving its manufacturing to the U.S. is Germany’s Siemens AG, which supplies equipment to companies that extract and ship natural gas, converts the fuel into power, and uses electricity on a large scale for manufacturing.

“Even though we have already missed a few opportunities, especially in unconventional oil-and-gas exploration, we still have excellent market-entry opportunities, especially in North America,” Siemens CEO Joe Kaeser said at a news conference on Wednesday.

On Tuesday, Kaeser named former Royal Dutch Shell PLC strategy head and American Lisa Davis as the new chief of the power business for Siemens. She will work from the U.S, a first for Munich-based Siemens, the Wall Street Journal reported. Siemens competes with Conneticut-based General Electric Co.

Germany’s BASF, the world’s largest chemical company, announced this month it was considering building a $1.4 billion plant in the U.S. to convert natural gas into propylene, used in many petrochemicals.

Austria-based steelmaker Voestalpine AG announced plans last year to invest more than $760 million in a Texas plant, motivated by inexpensive shale gas.

While a decade ago, American manufacturing jobs were flowing to China, this year, more than 50 percent of $1 billion-plus U.S. companies with operations in China are considering moving all or part of their production back home, according to Boston Consulting Group.